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FORT COLLINS: Speculators extended their Chicago soybean buying streak last week despite a halt in the futures rally, but price strength returned late in the week and investors’ optimism may have reached the strongest levels in more than a year.

In the week ended Feb. 15, money managers increased their net long in CBOT soybean futures and options to 175,372 contracts from 166,315 a week earlier based on data published Friday by the US Commodity Futures Trading Commission.

That is despite most-active futures falling more than 1% in that period and it goes against the trade prediction for fund selling. Money managers’ new stance is their most bullish since May, and new longs have outpaced short covering in most weeks since late December.

Soybean open interest has grown by more than a third over the past four weeks to about 1.12 million contracts, the biggest surge over any four-week period in at least 15 years. That is now just 13% behind anomalously high year-ago levels.

Investors have been focused on the unprecedented drought hits to South American soybean crops and the loss of exportable supplies. Global importers, led by China, have taken notice and have bought unusually large volumes of both old- and new-crop US soybeans in recent weeks.

Soybean futures rose 3.2% between Wednesday and Friday, ending at $16.01-1/2 per bushel on Friday. That is the most-active contract’s first settle above $16 since May 12, the same day that featured the recent rally’s high.

Trade estimates pegged money managers’ soybean net long as possibly having topped 200,000 contracts as of Friday’s close for the first time since November 2020.

Both CBOT soybean and soybean oil futures have jumped 20% so far in 2022. Soybean oil hit 67.87 cents per pound Friday, the most-active contract’s highest since June 11, just days after futures hit lifetime highs.

Soybean meal futures fell 3.4% in that week, but money managers added about 1,000 meal contracts to their net long, which at 89,170 futures and options contracts is their most optimistic since December 2020.

GRAINS

No. 2 corn exporter Brazil is expected to reap a record harvest over the next several months, but world supplies remain tight after its crop failed last year. Most-active corn futures rose nearly 1% in the week ended Feb. 15.

However, money managers reduced their net long in CBOT corn futures and options to 325,514 contracts from 337,332 a week earlier. The cut was mostly expected, and funds’ corn bullishness is a bit lighter than a year ago.

Speculators have grown increasingly bearish toward Chicago wheat for as long as the Ukraine-Russia tensions have been ongoing despite their potential impact on wheat exports.

Money managers added 5,100 CBOT wheat futures and options to their net short through Feb. 15, and the new stance of 34,658 contracts is their most pessimistic since June 2020. That coincided with a fractional rise in futures.

Most-active CBOT wheat jumped 3% in the last three sessions as the Black Sea conflict escalated. As of Friday, western intelligence believed Russia was increasing troops along Ukraine’s border and provoking war despite Moscow’s claims to the contrary.

Kansas City wheat futures also jumped late last week and closed at $8.40 per bushel on Friday, its highest settle since Dec. 27. Traders are watching drought conditions for hard red winter wheat in the US Plains.

Money managers increased their net long in K.C. wheat futures and options through Feb. 15 by nearly 1,600 to 36,050 contracts, above average for the date but well below the year-ago February record. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

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