FORT COLLINS, Colo. (Reuters) - Chicago-traded grain and oilseed futures had eased in the days leading up to Wednesday’s wildly bullish stocks report from the U.S. government, but that did not stop speculators from stuffing their portfolios even fuller with corn and soybeans.
In the week ended Sept. 29, money managers extended their net long position in CBOT soybean futures and options to 229,043 contracts from 211,143 a week earlier, according to data from the U.S. Commodity Futures Trading Commission.
That was against market expectations that they had sold about 24,000 contracts as most-active futures slid 2.6% during the period.
Investors added new soybean longs for the seventh consecutive week through Sept. 29, bringing the seven-week total to 151,000 contracts, the most ever for such a period. New longs accounted for most of the latest week’s move.
Producers established a record net short in soybeans through Sept. 29 of 351,874 futures and options contracts. Commercials’ net short is the largest for the time of year and not far off July 2012’s all-time high.
The U.S. Department of Agriculture on Wednesday revealed Sept. 1 U.S. soybean stocks were lighter than analysts expected, though the bullish surprise on corn was much more prevalent. Most-active soybean futures shot up 3% and corn jumped nearly 4% in response.
Wednesday’s soybean trading volume was the second-largest for the most-active contract in two-and-a-half years. If trade sources are correct, commodity funds’ net long in soybeans surged to an all-time high following Wednesday’s session, surpassing the May 1, 2012, record of 253,889 futures and options contracts.
Despite some presumed light soy selling at the end of the week, that record long assumption still held at the end of Friday’s trade.
Money managers were also pegged as sellers of corn futures and options in the week ended Sept. 29, but they instead increased their net long to 106,820 contracts from 95,912 a week prior. Short covering dominated again, as has been the case since early August.
USDA placed Sept. 1 U.S. corn stocks 11% below trade estimates on Wednesday, leading to the third-largest volume day for most-active futures. That contract on Thursday hit its highest level since March 4, and trade sources placed Wednesday-Friday fund buying in corn at 59,000 futures contracts.
As of Sept. 29, producers’ net corn short was the largest for the time of year since 2015, and the commercial short was the largest for late September since 2012.
SOY PRODUCTS, WHEAT
Money managers continued their soybean meal buying streak through Sept. 29, lifting their net long to 72,999 futures and options contracts from 65,248 a week earlier, despite futures falling 2.7% during the period. The new stance is funds’ most bullish for the time of year.
Soybean meal futures surged 6% over the last three sessions, and the buying was pegged at 20,000 futures contracts. Most-active futures on Friday reached their highest mark since June 13, 2018.
Soybean oil futures also fell 2.7% in the week ended Sept. 29, but funds reduced their net long to 94,098 contracts from 101,702 a week earlier. Futures fell another 3.2% over the last three sessions, and investors likely continued the selling trend.
Money managers reduced their net long in CBOT wheat futures and options by just over 2,000 contracts through Sept. 29 to 12,424 contracts.
But wheat futures surged more than 4% over the last three sessions, and trade estimates suggest that commodity funds bought 21,500 CBOT wheat futures. That would give them their most bullish October start since 2012.
Investors cut their K.C. wheat long by 438 futures and options contracts to 18,025 contracts through Sept. 29, and they increased their net short in Minneapolis wheat to 4,830 futures and options contracts from 2,298.
Sept. 1 U.S. wheat stocks and the 2020 U.S. wheat crop were both smaller than what traders thought, and wheat futures rallied along with corn and soybeans on Wednesday. However, global commodity and equity markets are monitoring Friday’s COVID-19 diagnosis of President Donald Trump, who was moved to a military hospital later that day for treatment.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by Matthew Lewis
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