CHICAGO (Reuters) - (The opinions expressed here are those of the author, a market analyst for Reuters.)
Speculative investors further ramped up buying in Chicago-traded corn, soybeans, and soybean meal futures and options as drought has firmed its grasp on key exporter Argentina.
In the week ended Feb. 20, money managers switched to a net long position in corn and surged to the most bullish stances in over a year in soybeans and in six years in soybean meal.
Funds’ new bullish outlook in CBOT corn futures and options is 18,674 contracts strong versus their net short of 10,614 contracts from the prior week, according to data from the U.S. Commodity Futures Trading Commission.
This represents specs’ first net long position in the yellow grain since mid-August, and the four-week buying spree ended Feb. 20 was their largest since July 2015. (reut.rs/2omRwGc)
Funds recent buying streak in CBOT soybeans is even more impressive. Over the last five weeks, money managers have bought 202,508 futures and options contracts, which is a record by a very comfortable margin. (reut.rs/2BOmiQ1)
Through Feb. 20, money managers’ net long in soybean futures and options exploded to 99,111 contracts from 42,869 in the previous week.
Speculators also stepped up bullish bets in CBOT soybean meal, as Argentina is the world’s leading supplier. As of Feb. 20, the managed money net meal long reached 85,089 futures and options contracts from 70,991 in the previous week, and the new stance is the most optimistic since May 2012.
But funds are much less enthusiastic about CBOT soybean oil, extending their net short to 27,135 futures and options contracts from 13,630 a week earlier.
The buying of meal and selling of soyoil has sent bets in the CBOT oilshare, which measures soybean oil’s share of value in soy products, out of whack. The net short of 112,224 futures and options contracts is funds’ most bearish oilshare view in four years. (reut.rs/2olLuFQ)
In the days since, trade sources suggest that commodity funds have mostly continued the buying trend in soybeans as the Argentine forecast remains dry, and the most-actively traded May contract nearly hit a one-year high on Friday.
This came despite the fact that on the same day, Brazilian consultancy Agroconsult raised its estimate for the ongoing Brazilian soybean harvest to a record 117.5 million tonnes. Also on Friday, weekly U.S. export sales data showed net soybean cancellations for the first time during the current marketing year.
Funds may have also been slight net buyers of corn over the last three sessions as the drought is also set to impact Argentina’s corn crop. The Rosario and Buenos Aires grain exchanges both significantly reduced their estimates of the country’s corn and soybean crops late last week.
Soybean meal has traded in over-bought territory for two weeks now, and some traders spent the last couple sessions locking in profits. Sources indicate that commodity funds were net sellers of soybean meal and outright buyers of soybean oil between Wednesday and Friday.
Robust world wheat supplies and the fact that corn, soybeans, and soybean meal are the main event in the market right now rendered speculators’ general attitude toward the wheat contracts largely unchanged last week.
In Chicago wheat, funds extended their net short to 67,039 futures and options contracts from 56,831 in the prior week. They slightly shaved their net long in K.C. wheat futures and options to 13,141 contracts from 14,726 in the week before.
The managed money net short in Minneapolis wheat increased to 827 futures and options contracts from 318 in the previous week.
In the days since, trade sources suggest that funds were slight net sellers of wheat futures.
Editing by Lisa Shumaker