Funds retain bullish US grain, oilseed views ahead of sell-off

Speculators maintained their collective bullish stance in US grain and oilseed futures through mid-February, though there have since been considerable downward corrections in Chicago wheat, corn and soybean oil futures.

The US Commodity Futures Trading Commission (CFTC) last Friday afternoon published its Commitments of Traders (CoT) report for the week ended Feb 21 after unexpectedly releasing the Feb 14 data on Wednesday.

The CoT data, which was interrupted over a month ago by a ransomware attack on a third-party provider, is now two weeks behind schedule. Those two missing weeks, especially the one ended Feb 28, will be most telling when it comes to investor sentiment given the decline in prices.

CFTC’s notice published on Friday did not indicate when the next batch of data is due, though the agency has published backlogged data on both Tuesdays and Wednesdays in the past in addition to the routine Friday release.

In the week ended Feb 21, money managers cut nearly 19,000 Chicago Board of Trade (CBOT) corn futures and options contracts off their net long, which fell to 215,928 contracts.

They added more than 12,000 contracts to their net short in CBOT wheat futures and options, which reached 72,045 contracts, funds’ second-most bearish wheat view for the date after 2016.

Money managers bought CBOT soybean futures and options for a second straight week through Feb 21, raising their net long slightly to 189,009 contracts, the highest since late December 2020.

They also increased their net long in CBOT soyoil by nearly 12,000 futures and options contracts, and the resulting net long was 34,301 contracts, a one-month high.

The managed money net long in CBOT soymeal reached another all-time high on Feb 21 of 154,141 futures and options contracts, an increase of 1,742 on the week.

When adding other reportable traders’ net long, the overall speculative soymeal net long is also a record at 173,690 contracts.

Money managers held modest net longs in K.C. and Minneapolis wheat futures and options contracts as of Feb 21.

Moves in the May CBOT futures contracts during the four-day week ended Feb 21 are as follows: wheat down 4.3%, corn up 0.1%, soybeans up 0.9%, soymeal down 0.2%, soyoil up 4%.

Optimism that Ukraine will continue exporting grains in the near term has added significant pressure to grain futures, though soybeans and soymeal have been propped up as drought has destroyed much of the Argentine crop.

Expectations for a big Brazilian corn crop and a recovery in this year’s US crop have offset concerns over Argentina’s corn.

Since Feb 21 and through last Friday’s close, the CBOT May contracts had trended as follows: wheat down 11%, corn down 9.3%, soybeans down 2.4%, soymeal up 1%, soyoil down 10%. The most notable moves occurred in the week ended Feb 28.

Daily fund estimates collected by Reuters suggest that from Feb 22 through March 10, commodity funds were net sellers of 59,000 CBOT corn futures, 39,500 CBOT wheat futures, 25,500 soybean futures and 24,500 soyoil futures.

Funds were seen as net buyers of 4,000 meal futures.

Most-active CBOT futures hit some milestone lows on Friday. Wheat touched its lowest levels since July 2021 (US$6.61 or RM30 per bushel), and corn’s US$6.06 (RM27)-3/4 was the lightest since August. Soyoil hit its lowest price since July of 56.1 US cents (RM2.30) per pound.

Tags: corn, grain, soybean oil, Oilseed, US, wheat, CBOT, futures