NAPERVILLE, Ill., Aug 7 (Reuters) - It took a historic futures rally in the final days of July to prevent speculators from exiting more bullish bets in Chicago corn and soybeans, as they have done in all but two weeks since the end of May.
Although buying in the most recent week was lighter, it proved that buying in the big “up” days can still outweigh selling in “down” days, something that has not been happening in recent weeks.
Investors have substantially pared long bets in grains and oilseeds since they approached historical highs earlier this year, though funds remain hesitant to establish bearish corn and soy views with supply uncertainties still lingering.
Price action in the week ended Aug. 2 was “round-trip” like so many others have been lately, and it included the biggest percentage rally in most-active CBOT soybeans since 2009.
Futures plunged more than 4% last Monday, and soybeans finished the week ended Aug. 2 up just 0.2% after being up as much as 7.6%.
Friday’s data from the U.S. Commodity Futures Trading Commission showed money managers during that week increased their net long in CBOT soybean futures and options to 99,471 contracts, up nearly 12,000 on the week on equal parts short covering and new longs.
However, other reportable speculators during the week slightly extended their net short in CBOT soybeans, which they have held since mid-June. Other traders raised bullish bets in CBOT corn, but that net long is only a third as large as the end-May level.
Most-active CBOT corn futures fell 1.1% through Aug. 2 after rising as much as 6%, though money managers were modest buyers, increasing their net long to 129,921 futures and options contracts from 120,788 a week earlier. New longs outpaced short covering.
Hot and dry U.S. weather remains a concern in the coming weeks, and traders will be monitoring the first survey-based corn and soybean yields from the government on Friday. Early estimates show a preference for a below-trend corn yield, but the ideas on soybeans are mixed. Reuters plans to publish polls on Monday.
The trade is also watching cargoes start to trickle out of Ukraine under the export deal. Four ships carrying a total of 84,000 tonnes of corn departed between Monday and Friday last week, and the new wheat harvest is expected to start shipping out in September.
CBOT wheat futures finished down 3.6% through Aug. 2 after rising as much as 5.2%. Money managers increased their net short to 14,970 futures and options contracts from 10,391 a week earlier, their 11th consecutive week of selling.
Most-active CBOT wheat ended unchanged over the last three sessions, but it notched a six-month low of $7.52 per bushel on Wednesday. Corn and soybeans rose 2.7% and 1.6%, respectively, during that period.
Money managers established their first net short since October 2020 in Minneapolis wheat futures and options, totaling 652 contracts as of Aug. 2, and they contracted bullish Kansas City bets to below 10,000 contracts for the first time since September 2020.
CBOT soybean meal futures fell 3.5% through Aug. 2 but had risen as much as 3.3%, and the buying outweighed selling as money managers lifted their net long by 6,600 contracts to a 14-week high of 80,018 futures and options contracts. That is record-high for the date.
A 5.9% surge in CBOT soybean oil futures encouraged funds to buy the vegoil for the first time in eight weeks, as their net long rose by about 7,200 to 22,141 futures and options contracts. That is one-third as large as the year-ago level. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Matthew Lewis)
