NAPERVILLE: Global grain and oilseed supplies began noticeably contracting nearly two years ago and funds have been long Chicago futures for most of that time. But recent events, particularly the conflict in Ukraine, have finally sent speculators’ bullish views to unprecedented levels.
Money managers’ combined net long position in CBOT grains and oilseeds, including Kansas City and Minneapolis wheat, reached an all-time high of 838,641 futures and options contracts on April 19. That edged the old record set in August 2012.
That position had been hovering near records since early March, when money managers dumped many of their remaining shorts, which remain light today. Speculators have not held a collective bearish CBOT view since August 2020.
CORN AND SOYBEANS
In the week ended April 19, money managers extended their net long in CBOT corn futures and options to 379,110 contracts from 369,952 a week earlier, close to recent maximums.
Friday’s data from the US Commodity Futures Trading Commission also revealed sharp increases to corn open interest, which has risen 15% in the last three weeks to 2.36 million contracts. That is up 27% so far in 2022 but 7% lighter than a year ago.
CBOT soybean open interest has not moved much in the last few weeks, averaging just under a million contracts. Those are typical levels for the time of year but off 20% from last year’s highs. Open interest for CBOT wheat remains at 13-year lows for the date.
Most-active CBOT corn and soybean futures rose about 3% in the week ended April 19. Money managers added 7,850 contracts to their net long, which reached 179,723 futures and options contracts. That is similar to the same dates in 2021 and 2018.
CBOT corn last Monday broke $8 per bushel for the first time since 2012, and although soybeans failed to take out the Feb. 24 high, they settled on Thursday at the highest price since 2012. Both were lower on Friday as most-active soybeans fell 1.8% to $16.88 per bushel and corn shed 0.8%, finishing at $7.89.
In the last three sessions, corn and soybeans were down 1.3% and 1.7%, respectively, and trade estimates peg commodity funds as light sellers of futures during that period.
The US Department of Agriculture on Friday flashed another large US corn sale to China, which combined with some cargoes to Mexico for a total of 1.63 million tonnes. Traders are also monitoring slow US corn planting progress as delays could impact yield.
SOYA PRODUCTS, WHEAT
Chicago corn and soybean futures fell on Friday despite the impossibly bullish news that top palm oil supplier Indonesia is banning exports. The country makes up 56% of palm oil exports, and those shipments account for 36% of all major global vegetable oil exports.
CBOT soybean oil futures raced to new lifetime highs, with most-active July futures hitting 83.21 cents per pound after notching contract highs in the previous two sessions. Wednesday-through-Friday gains totaled 3%.
Soyoil had risen 3.7% in the week ended April 19, and money managers staged their biggest buying week in more than six months. They added about 12,000 futures and options contracts, bringing their net long to 96,088, the highest since March 2021.
Money managers’ soybean meal net long is also very elevated and has been hovering around 100,000 futures and options contracts for the last few weeks. Funds bought just over 6,000 contracts through April 19 despite a fractional decline in futures.
Most-active meal futures fell another 1.6% over the last three sessions, ending Friday at $452.10 per short ton, its lowest settle since April 1. Money managers kept their net long in CBOT wheat futures and options for a seventh consecutive week through April 19, though they reduced it by more than 2,000 contracts to 14,470, mostly on new shorts.
That is a modest position compared with funds’ other grain and oilseed longs, but speculators have often been highly bearish Chicago wheat on this date in recent years. However, they were more bullish at this point in 2020, 2014 and 2011.
Money managers established a record net long in Minneapolis wheat futures and options through April 19 of 19,867 contracts, up more than 1,700 on the week. Spring wheat futures had hit contract highs early last week with a later start to US planting.
Funds’ K.C. wheat views were barely changed last week as their net long edged up to 49,841 futures and options contracts. Their bullish views have been steady for the last several weeks.