Funds’ CBOT corn buying vastly underwhelms after low U.S. acreage -Braun

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NAPERVILLE — Chicago-traded corn futures surged after U.S. farmers reported they would plant significantly fewer acres this year than analysts predicted, but that did not have speculators adding much more length in the subsequent days.

Investors have been bullish toward corn since September 2020, and their recent optimism has rivaled some of their strongest within that period. Justification to maintain those positions came on March 31, when the U.S. government’s acreage survey unexpectedly showed 2022 corn plantings would fall 4% on the year.

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Most-active CBOT corn futures jumped 4.6% in the week ended April 5 and new-crop December surged 8.2%. Commodity funds were predicted to have bought nearly 50,000 corn futures in the period.

However, data from the U.S. Commodity Futures Trading Commission on Friday showed the managed money net long at 362,306 corn futures and options contracts as of April 5, up just 7,702 from a week earlier.

Some of that buying was found on the commercial side of the market, as prospects for tight U.S. corn supplies through mid-2023 likely spooked end-users. Index funds also increased total corn positions by 4%, reaching a nine-month high.

Nearby and deferred corn added more than 1% over the last three sessions, with new-crop futures on Friday notching a contract high of $7.17-3/4 per bushel. Most-active corn set a one-month top on Friday of $7.73.

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The U.S. Department of Agriculture on Friday maintained its projection for 2021-22 U.S. corn ending stocks, though Brazil’s corn crop came in larger than expected and Chinese imports were reduced.

USDA last Monday announced China purchased its first cargoes of U.S. corn in 10 months, both old- and new-crop, which helped support prices. Additionally, recent and upcoming cooler U.S. temperatures may not give farmers an early start to planting.

SOYBEANS

Opposite to corn, U.S. soybean plantings were pegged well above market expectations at a record 91 million acres, up 4% on the year. CBOT soybeans reacted poorly to the news at first, but nearby and deferred futures on Friday traded above the end-of-March levels, basically erasing the acreage-rooted selling.

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Through April 5, money managers increased their net long in CBOT soybean futures and options to 163,655 contracts from 156,273 a week earlier. Light selling had been assumed.

Soybean selling was prominent among other reportable speculators that week. That group of traders axed nearly 8,500 contracts from their net long, their largest selling week since June 2021.

On Friday, most-active soybeans reached a nine-session high of $16.89-3/4 per bushel, and November futures hit a 10-session top of $14.97-1/2. Funds were seen adding some notable length late last week.

Money managers’ soy product views were very little changed through April 5. Their soybean meal net long inched over 100,000 futures and options contracts, and their soyoil long fell by less than 2,000 contracts to 76,750.

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Most-active soybeans and soyoil rose more than 3.5% between Wednesday and Friday, but soymeal rose fractionally.

WHEAT

Similar to corn, investors were seen adding considerable wheat length through April 5 and most-active CBOT futures rose 3%. But money managers’ net long fell to 13,959 futures and options contracts, down nearly 5,500 on the week.

Commodity index traders lightened up on their CBOT wheat positions by 3%, and their total number of contracts fell to the lowest levels since the days before Russia invaded Ukraine, both top wheat exporters.

July Kansas City wheat shot up nearly 6% through April 5 on the continued conflict in Ukraine and janky conditions for the U.S. crop. Money managers negligibly trimmed their net long, which fell to 45,029 futures and options contracts.

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U.S. spring wheat plantings are unexpectedly set to fall from last year, and drought conditions in the Northern Plains have some analysts concerned another poor harvest could be on the way. Minneapolis futures rose 6.6% through April 5 and another 1.3% in the next three sessions. The contract reached a one-month high of $11.28-3/4 per bushel on Friday.

Money managers as of April 5 established their most bullish Minneapolis view since 2010 at 18,255 futures and options contracts. That was an increase of 4,250 contracts on the week, the most for any week since October 2020.

K.C. wheat rose more than 2% between Wednesday and Friday and CBOT added 1.2%. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Editing by Matthew Lewis)