NAPERVILLE, Illinois, May 19 (Reuters) - Speculators last week continued reducing what had recently been near-record short bets in U.S. grains and oilseeds as unfavorable weather threatens crops worldwide.
In the week ended May 14, money managers cut their net short in CBOT corn futures and options to 71,171 contracts from 102,513 a week earlier, establishing their least bearish corn view since August. The most-active CBOT corn contract was unchanged on the week but was up as much as 2%, reaching the highest levels since late December.
Last week marked the fourth consecutive week of heavier net buying in corn, but new longs slightly outpaced short covering in the latest week whereas short covering dominated in the prior three. The last comparable stretch of net corn buying was in June 2019.
The U.S. Department of Agriculture on May 10 published its first official outlooks for the upcoming 2024-25 marketing year. U.S. corn supplies were pegged up just 4% on the year versus 17% projected in February, and U.S. corn planting has slipped behind schedule on persistent wet weather.
Next year's U.S. soybean stocks are seen up more than 30%, similar to February expectations, but new-crop U.S. soy export demand is off to its worst start in 23 years. Flooding in southern Brazil, which may have cut up to 3 million metric tons of soy output, has countered the bearish U.S. narrative.
Money managers added about 1,200 contracts to their net short in CBOT soybeans through May 14, raising the position to 42,665 futures and options contracts. In the previous week, they had slashed their net short by a record 108,000 contracts as futures surged on Brazil’s floods.
CBOT soybeans, soybean meal and soybean oil all fell around 2.5% in the week ended May 14, but money managers were net buyers of more than 11,000 soymeal futures and options, raising their net long to 99,210 contracts.
Last week’s meal move was driven almost entirely by new longs, and it marked the sixth consecutive week of significant fund net buying. The new meal position is money managers’ most bullish since December.
Money managers cut nearly 4,000 contracts off their net short in CBOT soybean oil futures and options through May 14. Even so, the resulting net short of 61,812 contracts is among their most bearish ever oil stances.
Soyoil futures jumped more than 4% over the last three sessions as traders unwound long meal-short oil spreads. Meal fell 1%, but beans climbed 1% in that period with help from soyoil on Friday.
CBOT corn slid more than 3% between Wednesday and Friday as the market assessed U.S. planting weather. Widespread rains may return to the Corn Belt early this week, possibly extending any delays.
WHEAT
CBOT wheat rose 4.6% in the week ended May 14, and money managers were net buyers for a fourth consecutive week, cutting their net short to 28,251 futures and options contracts from 42,360 a week earlier. The resulting stance is their least bearish since October 2022.
The managed money net short in Kansas City wheat futures and options last week fell to its lowest levels since September, and money managers established their first net long in Minneapolis futures and options since early August. That follows a record three-week round of short covering in spring wheat.
All wheat flavors were down over the last three sessions, with CBOT wheat falling more than 3% after reaching $6.97 per bushel on Wednesday, the most-active contract’s highest since July 31. Despite ongoing dryness, last week’s crop tour in top U.S. wheat state Kansas found above-average yield potential.
However, top wheat exporter Russia’s crop has run into trouble with recent dryness and now frost, which last week caused large reductions in harvest pegs. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Edwina Gibbs)
