Column: Funds forge most bullish CBOT corn view since February 2011 -Braun

FORT COLLINS, Colo. (Reuters) – Speculators have not significantly altered views in Chicago-traded grains and oilseeds in recent weeks in anticipation of Wednesday’s critical U.S. government figures, but investors’ enthusiasm for corn has steadily built to the strongest levels in a decade.

FILE PHOTO: Clouds hover above a corn field in Dubuque, Iowa, U.S., July 26, 2018. REUTERS/Joshua Lott/File Photo

In the week ended March 23, money managers increased their net long position in CBOT corn futures and options to 388,175 from 370,900 a week earlier, establishing their most bullish view on the yellow grain since February 2011. That went against trade expectations for fund selling during the period. (tmsnrt.rs/3crUK4J)

According to data published on Friday by the U.S. Commodity Futures Trading Commission (CFTC), outright short positions in corn are historically light and there has recently been very little movement week to week. But funds have added nearly 38,000 corn longs in the latest three weeks.

Through March 23, money managers boosted their net long in soybean futures and options by nearly 7,000 contracts to 162,853, though the overall position has not materially changed in more than two months. (tmsnrt.rs/3svtO9G)

CBOT corn futures remain rangebound, as the most-active contract fell 0.5% in the week ended March 23 but rose fractionally in the subsequent three sessions. Soybean futures are also oscillating in a range, though the most-active contract fell 1.6% between Wednesday and Friday.

A late-week correction in global vegetable oil markets weighed on soybean futures last week, and traders continue to monitor the weather and crop progress in South America. Drought has lowered potential for Argentina’s crops this season, though recent rains may have curbed further losses.

Market participants have long been anxious over the U.S. Department of Agriculture’s March 31 reports, which will include U.S. planting intentions and grain stocks data. Analysts see March 1 corn, soy and wheat stocks at multi-year lows for the date, and U.S. farmers are expected to boost overall sowings considerably from last year.

CFTC commitments of traders (COT) data for the week including March 31 will not be published until Friday, April 9, which coincidentally is the same day USDA will publish its next monthly supply and demand update. That COT reporting period, which is always Wednesday through Tuesday, will contain only four trading days since the markets are closed on April 2 in observance of Good Friday.

SOYBEAN PRODUCTS AND WHEAT

CBOT soybean oil futures have gone on a historic surge, last week reaching the highest levels since September 2012. But in the week ended March 23, money managers reduced their bean oil net long to 93,977 futures and options contracts from 98,686 a week earlier.

That corresponded to a 3.5% jump in most-active futures, though trade estimates had predicted that fund buying and selling had offset during that week. CFTC data suggests panic buying by commercial end users of the vegoil, who through March 23 went on their biggest weekly buying spree since 2018.

Most-active soybean oil futures plunged 8% in the last three sessions, their biggest three-day rout since the pandemic’s onset in March 2020. Commodity funds were seen as very heavy sellers of the vegoil late last week.

Most-active soybean meal futures earlier this month dropped below $400 per short ton for the first time since mid-December after topping $470 in January. Per CFTC data, money managers have been net sellers of meal in 15 of the past 20 weeks, including 10 of the last 12.

Through March 23, they trimmed their meal net long to 57,620 futures and options contracts from 61,236 a week earlier, and the new stance is funds’ least bullish since September. Futures rose 1.3% between Wednesday and Friday.

Money managers are on the brink of a bearish view toward Chicago wheat futures and options. In the week ended March 23, they cut their net long to 8,160 contracts from 17,525 in the prior week. That is their least optimistic position in three months.

Most-active Chicago wheat futures fell 3.4% over the last three sessions, and trade estimates suggest funds had likely flipped to a net short by Friday’s close. Harvest estimates continue to inch upward in top exporter Russia, and U.S. conditions are improving following heavier precipitation over the last month.

Better U.S. crop ratings have also weighed on Kansas City wheat. Money managers’ net long stood at 26,242 futures and options contracts as of March 23, a reduction of 12,100 on the week. That is funds’ largest selling week in almost a year, and they have pared their K.C. net long by more than 30,000 contracts since mid-February. (tmsnrt.rs/3cvvMlb)

Money managers have retained more of their Minneapolis wheat bullishness relative to the winter wheat contracts. Funds’ net long of 15,224 futures and options contracts as of March 23 was down less than 700 contracts from the prior week and less than 1,400 contracts off the recent peak earlier this month.

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