Speculators’ bullish corn and soy views fall to a 2021 low

Speculators’ bullish corn and soy views fall to a 2021 low

Reuters – Chicago-traded corn and soybean futures ended May more than 10 per cent off the month’s highs, and speculators had established their least bullish views of the year.

In the week ended May 25, money managers reduced their net long position in CBOT corn futures and options to 268,091 contracts from 291,025 a week earlier based on data from the U.S. Commodity Futures Trading Commission. That produced their least bullish stance since December.

Most-active corn futures fell 5.8 per cent during that week.

Money managers cut their net long by 39 per cent between May 5 and May 25. Futures dropped 11 per cent during that time frame.

Despite corn prices trading well off their early-May highs, speculators were not yet comfortable with the short side. Money managers boosted their gross shorts by 69 per cent in the latest three weeks, but the May 25 total was unusually low at just 39,186 contracts.

Other reportable speculators through May 25 reduced their outright corn shorts to the fewest since June 2012, though their longs have fallen by 36 per cent from the all-time high set in January. Money managers have shed 28 per cent of their outright longs since the end of March.

Rumours about China possibly cancelling U.S. corn cargoes or limiting imports rocked the market at month’s end, though the Asian country has booked an impressive amount of new-crop corn so far. U.S. crop weather will be in heavy focus over the next several weeks.

As of May 25, money managers held their least optimistic view on CBOT soybeans since August. They cut their net long to 139,390 futures and options contracts during the week.

That is well off their recent top of 238,394 contracts set on Oct. 6, close to the all-time high. Most-active soybean futures rose 44 per cent between Oct. 7 and May 25, though global supply outlooks have tightened since then.

Money managers have avoided an escalation in short soybean bets. Their gross shorts stood at 10,589 contracts as of May 25, relatively unchanged since late last year, though they cut outright longs by 20 per cent in the latest two weeks. Other traders’ gross soybean shorts have risen slowly since the end of last year to a largely normal level.

In soybean meal, money managers slashed their net long for a second consecutive week through May 25.

The net meal long fell to 25,232 futures and options contracts from 50,845 in the previous week, and the new stance is funds’ least bullish since early September. The long had been close to 90,000 contracts at the end of December.

Funds remain solidly optimistic on soybean oil futures and options, as they raised their net long through May 25 by just over 2,000 contracts to 85,327. Most-active soyoil futures fell 1.3 per cent between Wednesday and Friday of the final week of May, but remained close to all-time highs.

Soybean meal futures rose a couple of percentage points during the same period, following a large dive through May 25, settling 13.5 per cent off the month’s high. Soybeans ended off eight per cent from the May top.

Money managers were clinging to bullish CBOT wheat bets by May 25, having reduced their net long by nearly 10,000 to 4,534 futures and options contracts. Wheat futures bounced a little late in the month.

In Kansas City wheat, money managers reduced their net long to 23,501 futures and options contracts through May 25 from 26,100 a week earlier, their third consecutive selling week. They sold Minneapolis wheat for the first time in seven weeks, trimming their net long to 14,669 contracts from 16,415.

About the author

Columnist/Reuters

Karen Braun is a Reuters market analyst based in Chicago. The views in this column are her own.

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