Funds ditch CBOT corn longs at highest rate in over six years

CHICAGO corn futures last week fell to their lowest levels since late August before recovering again, though speculators were heavy participants on the downside, taking out an unusually large number of bulls for a second straight week.

Although most-active Chicago Board of Trade (CBOT) corn futures were unchanged in the week ended Nov 15, the contract had traded down more than 2% by Nov 15 before rallying back late in the session.

Corn trading volume was unusually high on that date, and it is now clear that was downside momentum.

Data from the US Commodity Futures Trading Commission (CFTC) showed money managers through Nov 15 slashed their net long in CBOT corn futures and options to 176,831 contracts from 237,662 a week earlier.

That established their least bullish stance since mid-august, and the move was entirely the result of retreating longs.

Money managers axed more than 78,000 gross CBOT corn longs in the two weeks through Nov 15, the most for any two-week stretch since July 2016.

Net selling of more than 95,000 contracts in the two weeks was the heaviest since August 2019. Futures were down more than 4% in the period.

By comparison, money managers have added just 17,000 gross corn shorts in the latest two weeks, and those remain well below normal.

Although volumes have been lighter, grain has been departing Ukraine in a somewhat timely manner.

Corn prices are at 10-year highs for the date, US corn export demand has been slow and global recessionary fears continue building.

Investors have been on the bullish side of corn since September 2020.

The US Department of Agriculture released its monthly supply and demand and US crop production reports during the week ended Nov 15.

US data

But the US corn and soybean crops, the most-watched items among the data, came in close to expectations.

Money managers sold CBOT wheat through Nov 15 for a sixth straight week, expanding their net short to 46,780 futures and options contracts from 42,902 a week earlier.

That marked their most bearish wheat view since June 2020.

Most-active CBOT wheat futures were also unchanged in the week ended Nov 15 but had been down more than 3% at one point.

Futures surged late in the Nov 15 session on unfolding news of missile strikes in Poland, though prices shed 3% in the following three sessions.

Russia on Nov 17 agreed to extend the Ukraine grain export deal for another 120 days, encouraging late-week weakness in wheat futures.

CBOT wheat last Thursday reached its lowest point since Sept 1 – US$7.93 (RM36.37) – 3/4 per bushel but the contract has not closed below US$8 (RM36.69) since that date.

Soybeans and products

CBOT soybean futures drifted higher in the week ended Nov 15, but like grains, they had been down nearly 2% in the period.

Money managers were more active on the downswing, reducing their net long by about 11,000 to 92,965 CBOT soybean futures and options contracts.

That snapped a four-week streak of fund buying in beans.

Reduction of longs and new shorts were both prominent in the week (though the former was heavier). Gross soy shorts remain historically light.

CBOT soybean oil futures during the week ended Nov 15 reached five-month highs after starting their recent climb in early October along with other global vegoils.

The contract added more than 2.5% in the week, and money managers increased their net long by more than 5,000 futures and options contracts.

That lifted their bullish soyoil stance to 110,371 contracts, the highest since February 2021 and their most bullish for the date.

But when adding in other traders, speculators were overall more bullish at this point in 2016 and 2020.

Money managers were aggressive sellers of CBOT soybean meal futures and options through Nov 15, reducing their net long by nearly 20,000 contracts, the most for any week since May. That resulted in a net long of 75,710 contracts, a four-week low.

Soymeal futures lost 2% during that week, though they were unchanged between Wednesday and Friday.

Soybean oil fell more than 5% in the last three sessions, mostly on Wednesday and Thursday, when collective losses surpassed 6%.

Soyoil trading volumes were unusually strong on both of those days, so speculators may have already wiped out a good chunk of their recent buying. — Reuters

Money managers were aggressive sellers of CBOT soybean meal futures and options through Nov 15, reducing their net long by nearly 20,000 contracts, the most for any week since May.