Column: Funds post record soymeal selloff but corn views don't budge

4 minute read

Soybeans are seen in a field waiting to be harvested in Minooka, Illinois, September 24, 2014. REUTERS/Jim Young/File Photo

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NAPERVILLE, Ill., May 22 (Reuters) - Speculators continued selling Chicago-traded soybean meal at a hot pace last week as prices dipped near four-month lows, but they continue carrying a hefty long position in corn.

According to the U.S. Commodity Futures Trading Commission, money managers slashed their net long in CBOT soybean meal futures and options to 35,923 contracts through May 17 from 52,314 a week earlier.

That put the three- and four-week selling totals at record levels. In the four-week period ended May 17, most-active meal futures had shed 10.4% but were down as much as 14%. The contract actually rose 2.6% in the most recent week.

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Money managers sold 63,619 soybean meal futures and options contracts in the four weeks ended May 17, equivalent to about 12% of the expected U.S. meal production in 2021-22.

CBOT oilshare, measuring soyoil’s share of value in the soy products, had reached record levels on May 12, and that eased last week. Soymeal futures rose 4.4% in the last three sessions but soybean oil fell 3%.

Money managers had trimmed their CBOT soybean oil net long in the week ended May 17 by a little more than 2,000 contracts, resulting in 86,237 futures and options contracts.

Most-active CBOT soybean oil has mostly traded at the previously unprecedented 80-cent level for a month now, settling at 80.93 cents per pound on Friday. High prices have been supported by top vegoil exporter Indonesia’s April 28 ban of palm oil exports.

Indonesia said Thursday that the ban would end Monday despite domestic cooking oil prices remaining well above the target levels suggested. read more However, Jakarta said on Friday it would reimpose a domestic sales requirement, effectively curbing some exports. read more

Benchmark Malaysian palm oil futures rallied 3% on that news on Friday, though prices have eased more than 12% since the day before the ban took effect. But prices are still about 50% steeper than a year ago, which had featured record levels for the date.

Managed money net position in CBOT soybean meal futures and options

CORN, SOY, WHEAT

CBOT corn futures jumped over 3% in the week ended May 17, but money managers added just over 1,000 contracts to their corn net long, which reached 339,711 futures and options contracts. The long has exceeded 300,000 contracts since October.

Money managers snapped a three-week selling streak in CBOT soybeans through May 17, lifting their net long to 147,335 futures and options contracts from 130,661 a week earlier. That was based entirely on fresh longs and came with a 5.4% rise in most-active futures .

Corn eased nearly 3% over the last three sessions as U.S. farmers continued to make progress on their historically slow planting efforts, but soybeans jumped 1.6%. Top corn exporter Argentina said on Thursday it may raise its 2021-22 corn export cap to 35 million tonnes from 30 million currently.

Chicago wheat futures shot up nearly 17% in the week ended May 17 as India banned exports over high domestic prices and a smaller crop. The contract traded as high as $12.84 per bushel, a level reached on only five other trading days in history.

India had been set to ship a record volume of wheat in 2022-23, at least 8.5 million tonnes, some 4% of global exports. As of Thursday, the government was considering allowing some trapped wheat at ports, up to 1.8 million tonnes, to ship out. read more

Money managers in the week ended May 17 boosted their net long in CBOT wheat futures and options to 26,586 contracts, their most bullish since March 2021. That was up from 15,547 a week earlier and represented just a fraction of the buying that had been anticipated.

Open interest in Chicago wheat surged 14% in the week ended May 17, the most for any week since 2006, but it is still the lightest for the date since 2009.

Most-active CBOT wheat futures fell 8.5% in the last three sessions as investors booked profits. Trade sources suggest commodity funds may have sold 37,000 futures contracts during that period, which would result in a real-time net short.

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

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Editing by Matthew Lewis

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