NAPERVILLE, Illinois, Aug 13 (Reuters) - Speculators have held relatively neutral but oscillating views in Chicago traded corn throughout the current U.S. growing season as unusual weather patterns have increased production uncertainty.
However, U.S. corn demand remains slow, and largely favorable weather so far this month has lured bears back into the yellow grain.
In the week ended Aug. 8, money managers established a net short position in CBOT corn futures and options of 26,656 contracts compared with the previous week’s net long of 16,741 contracts. That marked an unusual fourth time so far this calendar year that funds flipped bullish-to-bearish in corn.
Funds for a second consecutive week increased gross corn shorts, which was the primary reason for the switch to bear territory, but shorts are still 25% lighter than at their recent peak in early May.
Money managers’ net long in CBOT soybean futures and options in late July was at a seven-year high for the date, but funds have sold aggressively in the last couple weeks. As of Aug. 8, their net long had fallen to 64,081 contracts from 94,493 a week earlier and 120,739 two weeks earlier.
Unlike in corn, funds’ net selling in soybeans has largely stemmed from exiting longs. Gross bean shorts remain relatively light, but less so than a year ago.
CBOT corn and soybean futures plummeted at the end of July, though declines in the week ended Aug. 8 were more modest at 1.7% for December corn and 2.6% for November soybeans .
U.S. Corn Belt weather has been imperfect at times in the last month, but many areas have observed crop-supportive weather over the last week or so, improving crop conditions. That may have had market participants secretly anticipating larger yields from the government than analysts were expecting.
However, the U.S. Department of Agriculture on Friday pegged both U.S. corn and soybean yields slightly lower than the trade estimates and below last month’s trend-based yields.
That originally added support to prices, but corn raced lower as soon as USDA’s acreage registration data landed a bit later, suggesting some traders interpreted those numbers to be foreshadowing a planted area increase in next month’s report.
December corn shed 2.3% in the last three sessions and November soybeans were largely unchanged. Market watchers are monitoring the recent increase in U.S. soybean export sales and a potential pickup of corn sales.
WHEAT
Speculators have maintained bearish bets in CBOT wheat for more than a year now, though their net short position is significantly lighter than in May or early June, for example.
As of Aug. 8, money managers’ net short in CBOT wheat stood at 55,395 futures and options contracts, up nearly 5,000 on the week and similar to the past several weeks. Most-active CBOT wheat drifted fractionally higher in the week ended Aug. 8.
The Black Sea grain export deal has been off for nearly a month now, but traders do not yet see this as a supply threat. Wheat futures tumbled 4.5% in the last three sessions and finished at $6.26-3/4 per bushel, their lowest settle in two months.
USDA on Friday raised outlooks for Ukraine’s corn and wheat crops but left 2023-24 exports unchanged from last month’s estimates, which were printed before the demise of the export agreement.
The USDA report also showed U.S. wheat ending stocks a bit above the trade guess and total U.S. wheat production in line with expectations, though the spring wheat crop came in below all trade estimates with yield down 7.5% from last month.
Money managers were sharp sellers of Minneapolis and Kansas City wheat futures and options in the week ended Aug. 8, but they remained in bull territory. Funds reduced their net long in Minneapolis wheat to 4,497 contracts from 7,592 a week earlier, and they slashed their K.C. long to 5,257 contracts from 17,233, the strongest net selling in three months. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Chris Reese)
