By Karen Braun
FORT COLLINS, Colo., Nov 29 (Reuters) – Chicago-traded grains and oilseeds have been on a seasonally unusual rally amid tight global supplies and inflation fears, and although speculators’ corn views have hit an all-time high for the date, the wheat optimism is more muted.
In the week ended Nov. 23, money managers increased their net long position in CBOT corn futures and options to 366,691 contracts from 341,135 a week prior. That marked their most optimistic view since early May and resulted mostly from new longs being added.
That is according to data published Monday afternoon by the U.S. Commodity Futures Trading Commission, which was delayed from its usual Friday release due to the Thanksgiving holiday.
CBOT March corn futures CH2 had risen 1.9% through Nov. 23, though they have shed 1% in the three sessions since. However, the contract on Nov. 24 reached $5.96-3/4 per bushel, its highest since Aug. 12.
Wheat was the star of the week, as CBOT March futures WH2 jumped nearly 6% through Nov. 23 while Kansas City KWH2 added more than 7%.
But money managers were relatively light buyers of Chicago wheat, adding less than 3,000 contracts through Nov. 23 to their net long, which reached 17,963 futures and options contracts. That is their most bullish since August, but it is not the strong vote of confidence as is evident in corn or the other wheat contracts.
Index traders were the CBOT wheat buyers through Nov. 23, boosting their total number of outright contracts by 10% in the week to the highest levels since May 2019. That was their biggest weekly add in two years, and it supports the theory of inflation trade.
Money managers’ net long in K.C. wheat through Nov. 23 jumped to 65,609 futures and options contracts, record high for the time of year and their most optimistic stance since July 2017. That compared with 60,560 a week earlier.
Funds’ Minneapolis wheat net long also remains very elevated and reached 15,135 futures and options contracts as of Nov. 23, up 172 on the week. Minneapolis futures MWEH2 rose nearly 3% during that period but are unchanged since then.
However, the winter wheat contracts have taken a larger hit, with CBOT wheat down more than 5% over the last three sessions and K.C. down 3%. Both hit multiyear highs on Nov. 24, but coronavirus jitters returned to commodity markets late last week with a new variant in focus.
Wheat’s retreat was extended on Monday as key exporter Australia pegged its current wheat crop at a new record. However, high-protein wheat remains in short supply globally and recent excessive rainfall in Australia’s wheat belt may have affected the quality.
Trade estimates peg commodity funds as sellers of 32,500 CBOT wheat futures contracts over the last three sessions, which if true would put speculators safely in bearish territory in real time.
Most-active CBOT wheat Wv1 is now 28% higher since the start of the year, but money managers have avoided aggressive bullish bets for most of the year.
OILSEEDS
Speculators have not held a pessimistic stance on CBOT soybeans since early 2020, but the recent maintenance and expansion of their net long appears more related to general commodity and grain strength rather than genuine optimism in the oilseed.
Short covering was prominent in soybeans for a second week through Nov. 23, as the managed money net long rose to 49,356 futures and options contracts versus 29,488 a week earlier. Most-active futures Sv1 had risen 1.7% during that week.
That net long is a seven-week high, but soybean futures fell 2.5% in the three sessions since and funds are pegged to have sold 26,000 futures contracts. Weaker crude oil, favorable weather for crops in South America and lackluster U.S. soybean purchases from China have all contributed to the downturn.
Recent tightness in the U.S. soybean meal market has been a factor in fund buying and strength in soybeans. Money managers were again forced to cover soybean meal shorts in the week ended Nov. 23 after a multi-month high in futures of $382 per short ton on Nov. 17.
Most-active soybean meal futures SMv1 lost 3% through Nov. 23, but the managed money net long jumped about 16,000 to 53,559 futures and options contracts, their most bullish since May. The contract on Monday settled 10% off the Nov. 17 high.
Soybean oil gains were relatively weak through Nov. 23 at 1.5%, and money managers added just over 6,000 contracts, bringing their net long to 82,354 futures and options contracts. Speculators have not been bearish the vegoil since June 2020.
Graphics- COT Grains and Oilseeds Nov. 23https://tmsnrt.rs/3d0E8Ar
(Editing by Stephen Coates and Matthew Lewis)
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