Funds may hold record bearish grain views following USDA data

Speculators further increased their already massive net short stance on Chicago-traded grains last week, but they may have reached an all-time record in the days since. Combining net positions through November 7 in CBOT corn and wheat, K.C. wheat, and Minneapolis-traded wheat futures and options, money managers notched their third most-bearish week ever with a net short of 349,922 contracts, according to data from the US Commodity Futures Trading Commission.
Fund's all-time record grain short is 377,281 futures and options contracts in the week ended April 25, 2017. In the four trading days since, chances are good that money managers have neared or topped that record. This was primarily driven by heavy corn selling last Thursday amid a record US yield peg from the US Department of Agriculture, which has hung over the grain market ever since.
Through Monday's close, benchmark December corn futures had slid 1.6 percent since November 7. But considering how bearish the USDA data was, the resulting price action in the corn market has been relatively muted since hedge funds had already built up a hefty short position prior to the report.
In the week ended November 7, money managers lengthened their net short in CBOT corn futures and options to 205,624 contracts from 202,763 in the prior week.
The corn move included the addition of about 11,000 outright shorts - which stand at the third-largest total of all time - but it also featured an 8,000-contract increase in outright longs.
Despite an unexpectedly large USDA cut in US wheat ending stocks last week, ample world supplies continue to prevent CBOT wheat futures from driving higher. Sources suggest that speculators' wheat views have not drastically shifted in the last four sessions.
Money managers hold a very similar net position in Chicago wheat as they did a year ago. Through November 7, they boosted their bearish stance to 125,085 futures and options contracts from 110,875 a week earlier.
This is the most pessimistic funds have been toward the soft red winter wheat since the week ended April 25, which also marked their all-time short position of 162,327 contracts.
In K.C. wheat, funds mildly upped bearish views to 23,526 futures and options contracts from 21,393 in the prior week.
The managed money net long in Minneapolis wheat futures and options slightly expanded for the second week in a row, this time to 4,313 contracts from 3,329 in the previous week. Funds have not been bearish on the hard red spring wheat since April 25.
Funds are not wildly bullish on CBOT soyabeans and products, but the disparity between spec views on CBOT oilseeds and those on grains has reached a new high for the year. This spread has been larger in only eight other weeks, all between August and October 2016.
Speculators remained cautiously bullish on CBOT soyabean futures and options through November 7, extending their net long to 46,738 contracts from 40,612 in the prior week.
But trade sources indicate that funds have been net sellers of the oilseed since last Tuesday. As of Monday's close, benchmark January soyabean futures were down 2 percent over the period as USDA did not cut US soyabean yields as expected and ample rains were headed for Brazil's primary growing region.
Money managers continued to build up bullish bets in CBOT soyabean oil, increasing their net long to 54,363 futures and options contracts from 44,050 in the previous week.
This drove another uptick of funds' net long in the CBOT oilshare - which measures soyaoil's share of value in soyabean products - as they slightly shaved their soyabean meal long to 8,435 contracts from 8,613 in the week before.