Glacier FarmMedia – Despite a weakened United States dollar on July 17, activity in the grains at the Chicago Board of Trade was choppy, according to broker Ryan Ettner of Allendale Inc. in McHenry, Ill. Added to that, Ettner pointed out the speculative funds resumed accumulating very large short positions in corn and soybeans.
As the U.S. dollar fell to four-month lows, the wheat complex was up by double-digits, but Ettner said wheat was recovering from sharp losses. Nevertheless, he said that weaker greenback was leading to “a little bit of light macro buying across everything.”
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While a large portion of the U.S. Corn Belt was struck with heavy rains and strong winds, Ettner said the market remained focused on the idea of ‘rain makes grain.’ He noted there were very few pictures online or in the news of any great amount damage from recent storms.
“I really don’t think the damage is widespread enough to make a market impact,” Ettner commented.
The broker said the market going forward will pay attention to further movements in the U.S. dollar, as the upcoming weather is to be drier with temperatures slightly below normal.
“The 10-day outlook doesn’t have anything concerning,” Ettner said.
Meanwhile, the spec funds were back building their huge short positions in soybeans and corn. The commitment of traders report from the U.S. Commodity Futures Trading Commission cited managed money, as of July 9, added 29,000 soybean contracts to their short positions. At 162,800 contracts, that brought the short position to its highest level in five years. Corn saw an increase of 10,000 contracts, that increased the short to 356,400 contracts.
Those for wheat saw Chicago short at 68,700 contracts, with Kansas City nearly at 41,000, and Minneapolis was around 23,700.
“We’re always waiting to see as to when [the spec funds] are going to start covering that,” Ettner noted, explaining the specs most often build their shorts over five to six weeks before they start to cover.
“If that’s going to happen again, then we are only in week one,” Ettner said, but stressed that this is something not to count on.
