NAPERVILLE, Illinois, Sept 17 (Reuters) - U.S. corn yields should fall well below early-season ideas after bouts of unfavorable weather this summer, but that has not recently generated bullish price action for Chicago corn futures as a near-record crop is still predicted.
In the week ended Sept. 12, money managers expanded their net short position in CBOT corn futures and options to 134,909 contracts from 93,913 a week earlier. New gross shorts explained about two-thirds of the move.
That marked funds’ most bearish corn stance since mid-August 2020, when CBOT corn was trading below $3.50 per bushel. Most-active corn futures have traded below $5 since Aug. 21, and they fell 2% in the week ended Sept. 12.
Corn dropped to $4.73-1/2 per bushel on Sept. 12, tying mid-August for the lowest price since December 2020. On Sept. 12, the U.S. Department of Agriculture refreshed its U.S. corn crop estimate, which came in above all trade guesses due to an unusually strong gain in acres.
That increased confidence that U.S. corn stocks a year from now could be near the highest levels seen in the last decade. Lackluster export business for U.S. corn further supports that idea, as it signals ample supplies among rival exporters to meet global demand.
A net short of 134,909 contracts is funds’ third most bearish mid-September corn view since records began in 2006, behind only 2016 and 2019. However, it is well off the all-time net short of 322,215 futures and options contracts, set in April 2019.
Open interest in CBOT corn futures and options rose 4% in the week ended Sept. 12, but it sits at 10-year lows for the date, down 7% from a year ago.
SOYBEANS AND WHEAT
Most-active CBOT soybean futures fell more than 1% in the week ended Sept. 12. Money managers were net sellers of the oilseed for a second consecutive week, cutting their net long to 73,815 futures and options contracts from 82,810 a week earlier.
Open interest in CBOT soybean futures and options increased 4% last week and is now approaching the highest levels since mid-2022. Bean open interest is about 14% stronger than a year ago, when soy futures were trading well above $14 per bushel.
USDA’s outlook for the domestic soybean harvest declined last week as was expected, though U.S. exporters are currently facing stronger-than-usual competition from South American soybeans.
Money managers through Sept. 12 reduced their net long in CBOT soybean oil to 40,865 futures and options contracts from 55,159 a week earlier, the largest single-week sell-off in three months. Futures fell more than 4% in the week and exiting longs explained most of the selling.
CBOT soybean meal futures were unchanged in the week ended Sept. 12, though money managers trimmed their net long by nearly 3,000 to 62,202 futures and options contracts. Funds have held a net long in soymeal for nearly two years now.
Most-active CBOT wheat shed 2% in the week ended Sept. 12, dropping to the lowest price since December 2020. USDA’s monthly outlook implied much smaller-than-anticipated world wheat supplies by mid-2024, but Black Sea crops and exports have surpassed earlier expectations thus far despite the Ukraine-Russia conflict.
Money managers through Sept. 12 extended their net short in CBOT wheat futures and options to a three-month high of 84,139 contracts versus 78,681 a week earlier.
As of Sept. 12, open interest in CBOT wheat futures and options was at a five-year high for the date, up nearly 11% in the latest two weeks and 26% greater than a year ago. That is substantially different from July, where wheat open interest was the month’s lowest since 2005.
CBOT wheat rose nearly 3% between Wednesday and Friday while corn and soybeans fell fractionally. Meal eased 1.5% in that period but soyoil jumped more than 3%. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Diane Craft)
