FORT COLLINS, Colo. (Reuters) – It was a forgone conclusion that speculators easily held a record bullish position in Chicago-traded soybeans ahead of the U.S. government’s latest supply and demand report, but funds’ actual buying in the latest week was extremely underwhelming given the surge in futures.
The U.S. Department of Agriculture on Friday projected much tighter domestic and international soybean supplies than analysts predicted, sending futures close to four-year highs and again setting the expectation that funds closed the week on a record long note.
In the week ended Oct. 6, money managers increased their net long position in CBOT soybean futures and options to 238,394 contracts, up 9,351 from the previous week, according to data from the U.S. Commodity Futures Trading Commission. (tmsnrt.rs/2GRc4mi)
Futures rose 5% during the period and funds were predicted to have bought 47,500 futures contracts, which would have easily placed them above their May 1, 2012 record of 253,889 futures and options contracts.
For the eighth consecutive week, new longs were more prominent than short covering, though as of Oct. 6, only 5,516 gross soybean shorts remained in the market. Outright longs numbered 243,910, the most since August 2012.
USDA on Friday placed 2020-21 U.S. soybean ending stocks to a five-year low of 290 million bushels, well below the trade prediction for 369 million. Futures surged to a high of $10.79-3/4 per bushel, just 3 cents shy of July 2016 levels.
Most-active soybean futures jumped 2% between Wednesday and Friday, and commodity funds are thought to have bought 20,500 futures contracts.
Open interest in soybean futures and options reached 1.27 million contracts as of Oct. 6, less than 30,000 contracts off the June 2016 record. That represents a 32% surge in open interest since late August, which is huge for a seven-week stretch. (tmsnrt.rs/33L7DCI)
Money managers reduced their net long in soybean oil futures and options to 80,994 contracts through Oct. 6 from 94,098 a week earlier, despite a 1% rise in futures and the expectation for light buying.
At the same time, funds extended their net long in soybean meal futures and options for a sixth consecutive week, reaching 77,067 contracts versus 72,999 in the prior week.
Most-active soybean meal futures on Thursday hit their highest mark since June 4, 2018, and soybean oil on Friday reached the highest level in nearly three weeks. Funds are predicted to have extended bullish bets late last week in both soy products.
GRAINS
The strongest fund buying in the latest week came in corn, but those amounts also fell far short of predictions.
Money managers increased their net long in CBOT corn futures and options to 134,466 contracts through Oct. 6, a rise of 27,646 on the week. Trade estimates had pegged corn buying at 83,000 futures contracts on a 5.6% jump in futures. (tmsnrt.rs/36LD29X)
Short covering dominated in corn for the ninth consecutive week, and the number of outright shorts fell to 92,324 contracts as of Oct. 6, the fewest since late June 2016.
Most-active futures surged nearly 4% on Sept. 30 when USDA revealed much smaller domestic stocks than anyone thought. The agency’s Friday peg of 2020-21 U.S. corn stocks was slightly larger than expected but 35% off the June outlook, and futures topped out at $3.98-1/4 per bushel, the highest for the most-active contract since Oct. 15, 2019.
Futures rose 2.6% over the last three sessions, and the fund buying was pegged at 50,000 futures contracts.
Money managers boosted their net long in CBOT wheat futures and options through Oct. 6 by 17,912 contracts to 30,336, less than the prediction that they had bought 39,000 futures during the period. New longs were more dominant than the short covering. (tmsnrt.rs/3iKW82q)
Funds also lifted their net long in Kansas City wheat futures and options to 27,379 contracts from 18,025 in the prior week, but they expanded bearish bets in Minneapolis wheat to 5,112 contracts from 4,830 a week earlier.
Investors have not held a net long position in spring wheat in more than two years.
Dry weather is threatening the 2021 wheat harvests in the Black Sea and the United States, top world exporters. Those concerns sent most-active CBOT wheat futures last week through $6 per bushel for the first time since July 2015.
CBOT wheat was fractionally higher over the last three sessions, but funds were seen selling 1,000 wheat futures during the period.
December CBOT wheat futures are easily the highest for the time of year since 2013, the K.C. December contract is the highest for the date since 2014, but Minneapolis futures are similar to a year ago and not particularly elevated.
Editing by David Gregorio