COLUMN-Funds buy corn, wheat and soybean oil after USDA stocks data -Braun

  • 10/11/2021
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(The opinions expressed here are those of the author, a market analyst for Reuters.) FORT COLLINS, Colo., Oct 10 (Reuters) - Despite heavier-than-expected ending stocks for U.S. corn and especially soybeans, speculators in the most recent week were buyers of Chicago corn and moderate sellers of soybeans. That was partially supported by bullish sentiment in other markets including wheat, soybean oil and energy. Money managers in the week ended Oct. 5 added nearly 6,000 CBOT corn futures and options contracts to their net long position, which reached 250,596 contracts. That is according to data published Friday afternoon by the U.S. Commodity Futures Trading Commission. (tmsnrt.rs/3ByY5Jl) That week included the U.S. Department of Agriculture’s quarterly grain stocks report, which showed Sept. 1 corn inventory a bit larger than analysts thought. Just prior to that data, funds had staged their largest corn buying week since December, possibly bracing for bullish figures. Most-active corn futures rose 0.9% through Oct. 5, but they drifted more than 1% lower in the last three sessions. Friday’s settle of $5.30-1/2 per bushel is 6.6% above the recent low set Sept. 10. Traders are awaiting USDA’s next outlook on the U.S. corn and soybean harvest, due Tuesday at noon EDT (1600 GMT). The market sees corn yield a hair lower than last month’s forecast. SOYBEANS AND PRODUCTS U.S. soybean yield is expected to rise from the prior number given strong reports in many states so far. The Sept. 1 U.S. soybean supply was much larger than expected, topping all trade estimates and setting up for a boost in ending stock projections for the current marketing year. Most-active soybeans slid 2.1% in the week ended Oct. 5, reaching the lowest point since December 2020. Money managers in that period reduced their net long in CBOT soybean futures and options to 49,453 contracts, a cut of just under 10,000 contracts. Funds had also bought beans before quarterly stocks, though to a lesser degree than in corn. Soy futures dropped fractionally between Wednesday and Friday, though investors may not be ready to dump the oilseed yet due to strength in soybean oil futures, which on Friday hit the highest level since Aug. 17. U.S. crude oil and gasoline futures on Friday both closed at their highest levels since October 2014 amid the global energy squeeze. Malaysian palm oil futures on Friday set an all-time high. Soybean oil futures are well off June’s record, though the most-active soybean meal contract on Friday hit its lowest point since September 2020 at $318 per short ton. Meal futures ended last week about 32% off the year’s high set in January. Strong oil and weak meal have caused a surge in CBOT oilshare, which measures soyoil"s share of value in the soy products. Money managers have been bullish the oilshare since early in 2020, though that optimism surged past 100,000 contracts in the latest week. (tmsnrt.rs/3Bu5JET) Through Oct. 5, money managers boosted their net short in CBOT soybean meal futures and options to 32,064 contracts from 14,964 in the previous week. During the same period, their net long in soybean oil jumped to 75,178 contracts from 47,490 a week earlier, funds’ strongest buying week in more than two years. WHEAT Wheat has recently supported grain futures as Sept. 1 U.S. stocks were smaller than predicted and supplies in top exporter Russia have come up short. Most-active CBOT wheat jumped 5.4% in the week ended Oct. 5, reaching the highest price since mid-August and the highest for the time of year since 2012. Money managers during that week flipped to a net long position of 5,212 CBOT wheat futures and options contracts from a net short of 9,815 a week earlier. That was mostly on the addition of longs. They also increased their Kansas City wheat net long by nearly 4,000 to 49,946 contracts, their most bullish stance in seven months. Funds added 549 contracts to their Minneapolis wheat net long, which reached 15,337 futures and options contracts as of Oct. 5. Editing by Richard Pullin Our Standards: The Thomson Reuters Trust Principles.

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