FORT COLLINS, (Colo.): Chicago-traded corn futures had risen ahead of last week’s US government data despite expectations of a rising supply forecast, but speculators had already started to dump the yellow grain even before the historic selling streak late last week.
In the week ended May 11, money managers slashed their net long position in CBOT corn futures and options to 316,336 contracts from 372,548 a week earlier based on data published Friday by the US Commodity Futures Trading Commission.
More than 90% of that move was rooted in long liquidation, the most for any week in more than three years. The net selling was the largest for any week since August 2019, which was associated with an incredibly bearish US government report.
Most-active corn futures had risen 3.7% during the period. Commercial end-users increased their gross longs by more than 81,000 contracts through May 11, their largest weekly add since April 2016. Index traders increased their total number of outright contracts by 5% and open interest also climbed 5% to a three-month high.
The US Department of Agriculture on Wednesday published initial balance sheets for the upcoming marketing year. Although the corn outlook is tighter than usual, supplies are expected to rise into next year and the projected stocks were a bit roomier than analysts predicted.
Trade in the corn market became nauseating for the bulls on Thursday and Friday. July corn plunged 10%, the most-active contract’s worst two-day percentage loss in nearly eight years. New-crop December futures dropped more than 8%.
Losses had been partially attributed to the closure of traffic and subsequent logjam of grain vessels on the Mississippi River mid-week. The waterway fully reopened on Friday, but the selling continued at full steam through the end of the session.
An expected increase in US planted corn acres also weighed on futures late in the week. Analytics firm IHS Markit on Friday pegged plantings at 96.85 million acres, well above USDA’s current figure of 91.1 million. Money managers have not bought more than 25,000 corn futures and options contracts in any single week since late December.
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