NAPERVILLE, (Ill.): Speculators have been mega-bullish toward Chicago-traded corn since 2020, though their selling in the latest week and the recent price trends hint funds’ supply worries may have somewhat eased for now, especially with advances in US corn planting.
Neither corn nor soybeans have an overly comfortable supply outlook for the upcoming year, but Chicago soybean futures have rebounded in the past couple of weeks and investors have been buying up the oilseed.
Most-active CBOT corn futures hit six-week lows in the week ended May 24, and money managers reduced their net long position to 291,469 futures and options contracts from 339,711 a week earlier. That is based on data published on Friday by the US Commodity Futures Trading Commission.
That was funds’ largest round of corn selling since November and resulted in their least bullish view since October.
The reduction of longs, the most for any week since November, was the primary driver, though the addition of shorts was the most since September. Money managers’ gross corn shorts reached 63,709 contracts on May 24, still historically light but the most plentiful since December 2020. Investors have been hesitant to get short with market conditions so volatile for much of the last two years. Most-active CBOT corn futures on Friday posted their fourth consecutive losing week despite a fractional weekly decline, the longest such streak since August 2020. But both old- and new-crop futures ended up fractionally in the last three sessions, with July settling on Friday at $7.77-1/4 per bushel.
Corn has lost notable ground to soybeans in the last two weeks. The ratio of November soybeans to December corn ended below 2.0 on May 16, though it had risen to 2.15 by last Thursday, the highest since late March. Still, the ratio is much lower than in most past years.
Most-active CBOT soybean futures are trading at more than double the levels of April 2020, when money managers last held bearish views toward the oilseed. They were net buyers for a second straight week through May 24, increasing their net long to 163,067 futures and options contracts. New longs are responsible for the two-week buying streak and gross shorts remain very low. The new net long is more bullish than funds’ year-ago soybean view. July soy futures rose more than 2% in the last three sessions, ending Friday at $17.32-1/4 per bushel, the most-active contract’s highest settle since 2012 and the twelfth- highest on record. November soybeans on Friday came within 3-1/4 cents of the Feb. 24 high.
Traders are watching the record-slow soybean planting pace in key US producer North Dakota, though the corn pace is also the slowest ever and North Dakota farmers are now beyond the ideal corn planting window. Last week’s announcement that China would approve Brazilian corn imports was interpreted as worrisome for US corn demand to China, and recent US export sales have been sluggish. The idea that Russia, in exchange for the lifting of some sanctions, might allow some grain exports to move from Ukraine also pressured US grain futures last week, including wheat.
However, the White House said on Thursday there were no talks being held on the matter, reintroducing some uncertainty ahead of the long weekend.