NAPERVILLE, Illinois, Feb 25 (Reuters) - U.S. grain and oilseed markets have posted historic declines so far this year with the recovery of global supplies, and prices continued to fall last week even after speculators established their most bearish ever bets in Chicago corn.
In the week ended Feb. 20, money managers increased their net short position in CBOT corn futures and options to a record 340,732 contracts from 314,341 a week earlier. That surpassed the prior all-time net short of 322,215 contracts set in April 2019.
On the flip side, producers’, merchants’ and other end users’ net long in CBOT corn futures and options reached a record 58,342 contracts as of Feb. 20. This group of market participants rarely holds a net long and only do so when speculators are extremely bearish.
The last time money managers held a net long in CBOT corn was in early August, and most-active corn futures have plunged close to 20% since then. The March and May corn contracts had shed between 2% and 3% in the week ended Feb. 20.
Open interest in CBOT corn futures and options as of Feb. 20 was about normal for the date, but the percentage occupied by managed money gross shorts was nearly 25%, tying the April 2019 high.
Money managers in the week ended Feb. 20 extended their net short in CBOT soybean futures and options to 136,677 contracts from 134,500 a week earlier, marking their 14th consecutive week as net soybean sellers. Before this, the longest selling streak was 10 weeks.
The new managed money net short in soybeans is the most bearish since May 2019, which is also when the record net short of 168,835 contracts occurred. Funds last held a net long stance in soybeans at the turn of this year, and most-active CBOT futures are down about 13% since.
Before 2019, the record managed money net short in soybeans was 118,863 futures and options contracts set in June 2017, and the biggest net short in corn was 230,556 contracts from November 2017.
Between Wednesday and Friday, March and May corn futures fell another 4.5% and the same months for soybeans eased between 3.5% and 4%. Most-active corn and soybean futures on Friday both hit their lowest levels since late 2020, and front-month corn dropped below $4 per bushel for the first time since November 2020.
Lackluster export demand for U.S. soybeans and big corn and soybean crops in South America have been weighing on the market for several weeks now, though the U.S. government’s recent projections for substantial domestic supply growth into 2025 offered another blow to prices.
WHEAT AND SOY PRODUCTS
Nearby CBOT corn, soybean, soybean meal and soybean oil futures all hit contract lows on Friday, though wheat’s latest lifetime lows were notched last Tuesday. Money managers were net sellers of CBOT wheat futures and options in the week ended Feb. 20, though their resulting net short of 68,524 contracts is well off recent maximums.
In the same week, money managers were substantial sellers of CBOT soybean oil futures and options, expanding their net short to 52,841 contracts from 35,440 a week earlier. That is their most bearish oil stance for the date.
They also continued selling CBOT soybean meal futures and options, raising their net short to 30,684 contracts from 27,592 a week earlier. Funds have been net meal sellers in 12 of the last 13 weeks, and their stance as of Feb. 20 is the date’s fourth most bearish after 2020, 2019 and 2016. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Stephen Coates)
