NAPERVILLE, Illinois, Jan 21 (Reuters) - Speculators eased concerns over global grain and oilseed inventories late last year, but their selling enthusiasm, especially in Chicago-traded corn, soybeans and soybean meal, has accelerated this month as U.S. government outlooks corroborate the supply comfort.
Most-active CBOT corn futures shed 3.4% in the four-day trading week ended Jan. 16, driven by the U.S. Department of Agriculture’s heavy corn supply outlook issued on Jan. 12. The main feature of that report was the record 2023 U.S. corn yield, which was not expected.
In the week ended Jan. 16, money managers extended their net short position in CBOT corn futures and options to 260,542 contracts, the largest since June 2020 and the largest ever for the date. That compares with 230,723 contracts a week prior, and new gross shorts were the driver for a second straight week.
Managed money net position in CBOT corn futures and options
Corn open interest generally increases at the beginning of each year, but it has surged particularly fast this year. Futures and options open interest jumped 21% in the three weeks ended Jan. 16, the biggest rise for any three-week stretch since late May 2019, when funds were covering near-record shorts.
Corn futures fell nearly 8% in the three weeks ended Jan. 16, the worst start to a year since 2015. CBOT soybean meal is also off to a rough start, losing as much as 6% in the first two weeks of the year, also the sharpest since 2015.
Soybean meal open interest rose nearly 12% in the two weeks through Jan. 16, slightly larger than a comparable October 2023 run and the largest two-week gain since early February 2022. Meal futures and options open interest is easily record high for the date but well off the November peak.
Meal futures finished the week ended Jan. 16 up 1%, but active selling the previous Friday pushed speculators into their first net short since November 2021. The managed money net meal short as of Jan. 16 stood at 4,079 futures and options contracts versus a net long of 10,461 in the prior week.
Managed money net position in CBOT soybean meal futures and options
The speed at which money managers discarded what in late November had been near-record bullish meal bets is astounding. Net selling in the seven weeks ended Jan. 16 totaled about 140,000 futures and options contracts, equivalent to about 14 million short tons.
For context, U.S. meal production and exports in 2022-23 were 52.5 million and 14.7 million short tons, respectively.
Since late 2020, funds have been hesitant to place short bets on CBOT soybeans, but they nearly doubled gross short positions in the three weeks ended Jan. 16, most heavily in the latest week. Open interest jumped 16% in that period, the most for any three weeks since February 2022.
Managed money gross short positions in CBOT soybean futures and options
Money managers’ net short in CBOT soybeans surged to 76,797 futures and options contracts as of Jan. 16 versus 31,248 a week earlier, and the new stance is the most bearish since February 2020. Soybean futures have been trading near their lowest levels since late 2021.
Funds have maintained their sizable net short in CBOT soybean oil since late December, and the Jan. 16 position of 47,011 futures and options contracts is just slightly larger than in the prior week. CBOT wheat fell 4.6% in the week ended Jan. 16, and money managers increased their net short to 68,575 futures and options contracts from 57,988 a week earlier.
Moves in most-active CBOT futures between Wednesday and Friday are as follows: corn up 0.5%, soybeans down 1.1%, wheat up 1.9%, meal down 3.9%, soyoil down 0.7%. Traders will continue watching South American weather and any demand developments, especially pertaining to China.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
Editing by Leslie Adler
