Column: Funds pile up on CBOT grains, oilseeds suck amid export uncertainties – Braun

FORT COLLINS, Colorado, Jan 30 (Reuters) – Speculators raised their bullish views on Chicago corn and soybeans last week with futures reaching or approaching new highs, but despite the unusually strong optimism, investors are much less invested than a year ago.

Exportable supplies are a concern for all grains and oilseeds, supporting futures. Drought threatens corn and soybean supplies in South America, geopolitical tensions could impact wheat and corn shipments from the Black Sea region, and exports have been limited for palm oil Indonesian vegetable oil marketed n°1.

Fund 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. It’s almost identical to their view a year ago.

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They also added more than 15,000 contracts to their net purchase of CBOT soybean futures and options, which hit a more than seven-month high of 114,895 contracts. This is based on data released Friday by the US Commodity Futures Trading Commission.

The most active CBOT corn and soybeans both jumped 3.4% in the week ended Jan. 25 as the Russian-Ukrainian conflict fueled market jitters. Weather conditions for crops in parts of South America have improved, but other regions still face uncertain conditions.

The fund managers’ position in soybeans is below the net long position of the previous year, close to 157,000 contracts, but remains relatively strong for the time of year. However, the total number of commodity index trader positions in soybeans is 19% lower than last year and 25% lower for corn.

Commodity index traders’ total firm positions in CBOT corn futures and options

Open interest in soybeans as of January 25 was 33% lower than a year ago and corn 26% lower, although last year was an anomaly. Open interest in soybeans jumped 5% to a three-month high last week, but is down 7% from the same week in 2020.

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

Soybean futures on Friday set new highs in both near and forward contracts, settling at $14.70 a bushel in the most active March, gaining 4.5% over the past three sessions. March corn rose 2.6% over the period, ending Friday at $6.36, the highest active contract since June.

Losses estimated for Brazil’s soybean crop have increased in recent weeks, with some experts discussing the low range of 130 million tonnes compared to earlier ideas of 140 million tonnes. Analysts are also watching for 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.

SOY AND WHEAT PRODUCTS

Speculators have rebuilt soybean oil optimism lately as global vegetable oil and crude oil prices rise. Fund managers through Jan. 25 increased their net long position in CBOT soybean oil futures and options to 68,773 contracts.

This is up from 58,208 the previous week and is the fifth consecutive week of net purchases by the funds, although fund managers held a net number of more than 100,000 contracts.

The most active CBOT soybean oil futures gained 5.8% in the week ending Jan. 25 and added another 4.4% in the last three sessions. Friday’s settlement of 65.27 cents a pound is the highest since July and up 15.5% so far this month.

Concerns intensified late last week over global vegetable oil supplies as Indonesia implemented palm oil export restrictions, sending oil futures Malaysian palm to new all-time highs on Friday. Indonesian palm oil exports account for 36% of global vegetable oil trade.

Soybean meal futures rose slightly through Jan. 25 and fund managers removed about 400 contracts from their net long, which fell to 64,334. But the most active contract jumped nearly 5% over the last three sessions.

Tension between Russia and Ukraine and possible impacts on exports during the week ended Jan. 25 sent Chicago wheat futures up 6.4%. Kansas City wheat futures gained 8% during the period and Minneapolis wheat gained 4.4%.

Fund managers nearly halved their Chicago wheat net short to 13,427 futures and options, and they increased their KC net long to 40,634 contracts from 36,119. But they continued to sell wheat spring, reducing their Minneapolis net long to 3,340 futures and options contracts from 3,857.

Wheat closed last week on a very different note than corn and soybean complex. Chicago and KC futures fell 4% and Minneapolis 3% between Wednesday and Friday after the recent surge that peaked on Tuesday.

Uncertainty over the Russian-Ukrainian clash continued late last week, although US officials on Friday said there was enough evidence to suggest a Russian invasion could occur. read more Moscow and Kiev downplayed the importance of the conflict.

Karen Braun is a market analyst for Reuters. The opinions expressed above are his own.

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Reporting by Karen Braun Editing by Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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