NAPERVILLE, Ill., Nov 13 (Reuters) - Unusually hot and dry weather has gripped top soybean exporter Brazil as it plants what is supposed to be a record crop, causing concern for both soybean and corn supplies as soybean problems could bleed onto Brazil’s heavily exported second corn crop next year.
Additionally, tightness in U.S. soybean meal supplies related to Argentina’s extreme crop shortfall earlier this year has lent significant support to soybean and soymeal futures lately.
Most-active Chicago soybean futures surged nearly 4% in the week ended Nov. 7, and money managers expanded their net long position in CBOT soybean futures and options to 68,598 contracts from 23,153 a week earlier, reaching their most bullish stance in two months.
It was funds’ biggest net buying week in soybeans since early April, and both new longs and short-covering played an instrumental role. This is according to data published Monday afternoon by the U.S. Commodity Futures Trading Commission.
CBOT soybean meal futures also rose nearly 4% through Nov. 7, and money managers extended their net meal long to 111,987 contracts from 106,583 in the prior week with short-covering as the prominent factor.
The new managed money meal long is the biggest since mid-March and the largest ever for the date. Open interest in CBOT soybean meal futures and options in the week ended Nov. 7 topped 600,000 contracts for the first time ever, surpassing the extremely elevated 2018 levels.
CBOT soybean oil shed about 4% in the week ended Nov. 7, and money managers flipped to a net short in bean oil for the first time since early June, primarily on new shorts. The Nov. 7 net short of 10,352 futures and options contracts compares with a net long of 4,495 a week earlier.
CBOT corn futures were down 2% through Nov. 7, and the managed money net short in corn futures and options increased to a six-week high of 168,588 contracts from 144,432 a week earlier. That was equally split between new shorts and exiting longs.
Money managers’ net short position in CBOT wheat futures and options shrank to 92,262 contracts through Nov. 7 versus 101,575 in the prior week on a 2.5% rise in futures. That still reflects a relatively strong net short, the date’s largest since 2017.
China began buying large daily quantities of U.S. soybeans on Nov. 8, and the U.S. Department of Agriculture released its monthly supply and demand report on Nov. 9. The USDA numbers were bearish for corn and soybeans as U.S. crops came in larger than expected.
However, the Chinese buying and intensifying problems in some of Brazil’s key production states have helped futures move higher in the last four sessions. Corn is up nearly 2% in that timeframe, soybeans and wheat have added 1.5% each, soybean oil is up 4%, and soybean meal has risen nearly 5%.
CBOT soybean meal on Monday traded up the daily limit at one point, reaching the most-active contract’s highest since mid-March and notching another contract high for December meal. Soymeal futures as of Monday are the highest ever for the date and have risen 26% in the last five weeks.
Most-active CBOT soybeans on Monday hit their highest price since Aug. 31, and most-active corn futures rose 2.9%, their biggest single-day percentage gain since July 24. That was after reaching the lowest levels on Friday since December 2020. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Leslie Adler)
