Column: Funds defend CBOT corn long but sell soymeal after historic run-up

Unharvested corn, left as a barrier against blowing snow, stands in a field at a farm in Carroll
Unharvested corn, left as a barrier against blowing snow, stands in a field at a farm in Carroll, Iowa, U.S., January 30, 2020. REUTERS/Brian Snyder/File Photo

NAPERVILLE, Ill., Jan 29 (Reuters) - Chicago grain and oilseed futures slipped early last week amid the lack of fresh news to support recent highs, particularly as rain fell on drought-stricken crops in major exporter Argentina.

Speculators were net sellers across the soy complex and in wheat in the week ended Jan. 24, but they extended their net long in CBOT corn to an 11-week high of 201,797 futures and options contracts, up nearly 10,000 on the week.

New gross longs were the primary reason for the move, as has been the case in most recent weeks when funds were net corn buyers. Gross corn shorts are more plentiful than at this point in the last two years, but they remain relatively light and are below the recent July 2022 peak.

Managed money net position in CBOT corn futures and options

Most-active CBOT corn futures fell more than 1% in the week ended Jan. 24, though they rose by nearly the same degree over the last three sessions despite expectations for additional rain in Argentina’s farm belt over the next several days.

CBOT corn ended at $6.83 per bushel Friday, up 5% from the month’s low and stronger than the year-ago $6.36. Both corn and wheat futures found late-week strength over potentially re-escalating tensions in the Black Sea and concerns that supply there may not be sufficient.

Most active CBOT wheat futures fell more than 2% in the week ended Jan. 24, including a 16-month low of $7.12-1/2 on Jan. 23. Money managers pushed their net short to another multi-year high of 73,933 futures and options contracts.

That is up nearly 9,000 on the week and is the largest fund wheat short since May 2019.

Money managers’ bearish CBOT wheat views are stronger than usual but well off the record 162,327 contracts set in April 2017. Funds’ net wheat short frequently exceeded 100,000 contracts throughout 2016 and 2017, but that was accompanied by strong open interest, contrary to the current situation.

Most-active CBOT wheat had traded between $4.16 and $4.37 per bushel in April 2017. On Friday, the contract settled at $7.50, up about 2% in the last three sessions.

Managed money net position in Chicago wheat futures and options


Money managers in the week ended Jan. 24 were net sellers of CBOT soybean meal for the first time in nine weeks as futures, which fell more than 4% during the period, are sensitive to Argentine weather.

Their net long fell to 135,503 CBOT soymeal futures and options contracts from the all-time high of 150,939 a week earlier. Exiting longs were more prominent, but some shorts poked their heads in.

CBOT soybean oil futures also fell more than 4% through Jan. 24 and money managers cut about 18,000 futures and options contracts off their net long, which fell to 35,961. That is their least bullish stance since August and their least bullish January view in four years.

In CBOT soybeans, money managers axed over 22,000 contracts from their net long position, which fell to 146,261 futures and options contracts. That marked their biggest round of net soy selling since June. Most-active futures shed more than 3% during the period.

Soybeans fell on Friday, settling at $15.09-1/2 per bushel, but the contract rose more than 1% in the last three sessions on a pickup in U.S. soybean demand. Soyoil sank fractionally in the same time frame, but soymeal was up 3%, finishing the week at $473.50 per short ton.

Managed money net position in CBOT soybean meal futures and options

Karen Braun is a market analyst for Reuters. Views expressed above are her own.

Writing by Karen Braun Editing by Matthew Lewis

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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As a columnist for Reuters, Karen focuses on all aspects of the global agriculture markets with a primary focus in grains and oilseeds. Karen comes from a strong science background and has a passion for data, statistics, and charts, and she uses them to add context to whatever hot topic is driving the markets. Karen holds degrees in meteorology and sometimes features that expertise in her columns. Follow her on Twitter @kannbwx for her market insights.