Oilseed Export Uncertainties

CHICAGO :Speculators ramped up bullish views in Chicago corn and soybeans last week with futures notching or nearing new highs, but despite the unusually strong optimism, investors are much less invested than a year ago.

Exportable supplies are of concern across all grains and oilseeds, supporting futures. Drought is threatening corn and soybean supplies in South America, geopolitical tensions could impact wheat and corn shipments from the Black Sea region, and exports have been restricted for Indonesian palm oil, the No. 1 traded vegetable oil.

Money managers in the week ended Jan. 25 added about 39,000 contracts to their net long position in CBOT corn futures and options, which reached 365,605 contracts. That is nearly identical to their year-ago view.

They also added more than 15,000 contracts to their net long in CBOT soybean futures and options, which hit a more than seven-month high of 114,895 contracts. That is based on data published on Friday by the U.S. Commodity Futures Trading Commission.

Most-active CBOT corn Cv1 and soybeans Sv1 both jumped 3.4% in the week ended Jan. 25 as the Russia-Ukraine conflict stoked market jitters. Weather for crops in parts of South America had improved, but other areas are still facing iffy conditions.

Money managers’ soybean stance sits below the year-ago net long near 157,000 contracts but is still relatively strong for the time of year. However, commodity index traders’ total number of soybean positions are 19% lighter than last year and 25% lighter for corn.

Soybean open interest as of Jan. 25 was 33% below a year ago and corn 26% below, though last year was an anomaly. Soy open interest last week jumped 5% to a three-month high but is down 7% from the same week in 2020.

Corn open interest is up 4% from two years ago and through Jan. 25 climbed 4% on the week to a two-month high. Index traders’ corn positions are 5% below the 2020 levels, but their soybean ones are up 6%.

Soybean futures on Friday set new highs in nearby and deferred contracts, settling at $14.70 per bushel in most-active March, gaining 4.5% over the last three sessions. March corn rose 2.6% in that time frame, ending Friday at $6.36, the most-active contract’s highest since June.

Estimated losses for Brazil’s soybean crop have expanded in recent weeks, with some experts discussing the low 130 million-tonne range versus prior mid-140 million ideas. Analysts are also watching a possible return to dry conditions in Argentina.

Between Wednesday and Friday, commodity funds are pegged as buyers of 22,000 CBOT corn futures and 31,500 CBOT soybean futures.

source: Reuters