FORT COLLINS, (Colo.): Speculators’ energy for soybeans was critically lacking following the US harvest, but dwindling supplies in South America have rapidly restored their enthusiasm to the impressive year-ago levels.
In the week ended Feb. 1, money managers added nearly 40,000 CBOT soybean futures and options contracts to their net long, which reached 154,488 contracts according to data from the US Commodity Futures Trading Commission.
That is funds’ most optimistic soybean view since May and identical to the same weeks in both 2021 and 2017. They added almost 30,000 gross soybean longs through Feb. 1, the most for any week since Sept. 1, 2020, and their net long is about as large as it has ever been for the date.
Money managers’ net long hit its recent peak near 238,000 contracts in early October 2020, but one year later, that position sat just below 50,000. Most-active CBOT soybean futures have risen 24% since then versus a 30% gain in the same period last year.
Soy futures had risen nearly 9% in the week ended Feb. 1, and they tacked on another 1.6% in the last three days. Brazil’s shrinking crop, uncertainty in Argentina and an increase in US export demand kept the bulls in control last week.
As of Friday afternoon, weather models were mixed as to when rains might arrive in Argentina beyond the upcoming week, which was expected to be dry. The forecast also showed dry weather on tap for southern Brazil.
Brazilian corn harvest outlooks are beginning to slide as well despite the season just beginning for the exported crop, but corn faced headwinds late last week on shaky US export demand and burgeoning corn-based ethanol supplies.
Most-active corn futures slid about 2% between Wednesday and Friday but had notched equivalent gains in the week ended Feb. 1. Money managers extended their net long that week by about 7,000 to 372,551 corn futures and options contracts, similar to their end-2021 stance.
Corn open interest as of Feb. 1 was down 25% on the year and soybeans are down 23%. But soybean open interest surged 14% in the latest week, a seasonal but unusually strong move, pushing past 1,000,000 contracts for the first time since June.
CBOT soybean meal futures exploded more than 11% in the week ended Feb. 1, and money managers’ net long jumped more than 12,000 to 76,743 futures and options contracts, a one-year high.
Soybean oil futures added 5% that week as rival vegoil and crude oil prices continued the upward march, and iffy weather lingered for top soy product exporter Argentina.