CHICAGO: Despite a serious heating-up of trade tensions between the United States and China in the week ended April 10, speculative commodity investors generally maintained or increased overall bullishness toward Chicago-traded grain and oilseed futures.
Heavy selling of soybean and corn futures occurred on April 4 as China announced plans to impose tariffs on US agricultural products including soybeans, but the sell-off also provided buying opportunities the next day.
A mostly as-expected supply and demand report from the US Department of Agriculture on April 10 prevented any serious rethinking by speculators on their positions, although the agency's forecast for both domestic and global soybean supply came in smaller than trade guesses.
In the week ended April 10, hedge funds and other money managers trimmed their net long position in CBOT soybean futures and options to 176,217 contracts from 181,154 in the prior week, according to data from the US Commodity Futures Trading Commission.
Last year at this time, funds held a net short in soybeans of around 30,000 futures and options contracts. The current spec position is the most bullish for mid-April since 2014, and it is nearly identical to the 2014 stance.
Money managers extended their net long in CBOT corn through April 10 to 174,887 futures and options contracts from 140,187 in the prior week. Speculators had held bearish corn positions during mid-April for the last three years.
The managed money soybean long is more or less intact heading into this week, as traders estimate that commodity funds were slight buyers of the oilseed between Wednesday and Friday.
Late last week, Argentine soy harvest pegs shrank further and US export demand shined. Traders were also expecting that the National Oilseed Processors Association will reveal on Monday that US soybean crush notched an all-time record last month.
But profit-taking and lingering nerves over US-China trade tensions worked against soybean futures late in the week. There also may have been ideas in the marketplace that US farmers could expand soybean acres if cold weather delays corn planting.
Speculators have a slightly less bullish view on corn heading into the week of April 16, as trade sources indicate they were net sellers of the yellow grain late last week. Technical selling, plentiful inventory, and weakness in wheat weighed on corn futures, but the potential for delayed US planting underpinned the market.
OILSHARE RECORD
In the week ended April 10, speculative short bets in the CBOT oilshare, which measures soyoil's share of value in the soy products, reached a fresh record of 142,169 futures and options contracts.
The new net short eclipsed the old record of 138,189 contracts set just two weeks earlier.
In the latest move, money managers expanded their bullish stance in CBOT soybean meal to 109,370 futures and options contracts from 98,227 in the prior week. But they also extended their net short in CBOT soybean oil futures and options to 32,799 contracts from 22,442.
Traders indicate that commodity funds were net sellers of both soybean meal and soybean oil futures over the last three sessions.
TEMPORARY WHEAT INTEREST
Dry weather in the US Plains led money managers to extend their net long in K.C. wheat through April 10 to 33,498 futures and options contracts from 22,143 in the prior week. The new stance is funds' most bullish in hard red winter wheat since August.
Speculators reduced their net short in Chicago wheat to 54,872 futures and options contracts from 73,418 a week earlier. They also cut bearish views in Minneapolis wheat to 821 contracts from 2,769.
But these trends surely reversed later last week, as futures prices fell on promising rainfall forecasts for drought-impacted wheat in the southern US Plains and poor US export demand. CBOT May wheat was down 3.7 percent over the three-day stretch and K.C. wheat lost 5.1 percent.
Minneapolis wheat also slipped 1.6 percent over the same period, despite the fact that spring wheat planting has yet to begin in the northern US Plains. Farmers there remained grounded through the weekend as a late-season blizzard stormed across the region.
Comments
Comments are closed for this article.