FORT COLLINS, Colo. (Reuters) – Corn futures near Chicago have been locked in range for nearly two months after their historic rally that began in August, with speculators continuing to hold on to the bullish big bets expect key supply data from the US. government at the end of the month.
The U.S. Department of Agriculture on March 9 published its monthly supply and demand report and left domestic balance sheets for corn and soybeans unchanged from the previous month. That added to the overall market lethal sentiment, but USDA ‘s March 31 planting data and U.S. plant secrets data are expected to make bigger waves.
In the week ended March 9, cash managers raised their long net position in CBOT corn futures and options to 356,514 contracts, up nearly 8,000 contracts from the previous week, according to data from the Futures Trading Commission US Commodity Times (CFTC).
Other reported traders were selling corn for the seventh consecutive week, contributing to the slight decline in corn speculative expectations over the past two months. (tmsnrt.rs/2NjjylO)
In soybeans, cash managers added just over 4,000 contracts to their long line, reaching 159,601 contracts as of March 9. When they were also considering other predictable traders, there is overall bullishness speculators for the time of year have fallen below the level of 2014 and 2018, the latter of which was associated with a large drought-related loss in Argentine soybean crops. (tmsnrt.rs/3qGWUkV)
Argentine soybeans and corn are fighting today, causing harvest estimates to decline in recent weeks. The newest soybean crop in Brazil is expected to be large enough despite a delay in harvest progress, which poses risks for a second corn crop that is being planted very late.
Open interest in corn and soybeans remains at high levels for the time of year, although they have continued to see seasonal changes over the past few months. However, soybean open interest at 1.19 million contracts as of March 9 is far more volatile for the time of year than it is for corn, which stood at 2.37 million contracts from the same date.
CME Group, the parent of the Chicago Board of Trade, is extending speculative position limits for agricultural futures starting Monday, following a January ruling by CFTC. Analysts believe this could contribute to market volatility, although the impact may not be immediate.
However, this will allow speculators to increase their market range, and it will be particularly important to monitor activity changes among all investment groups, including regulated currencies and index traders.
SOY AND WHEAT RESULTS
Money managers cut their long net in soybean oil futures and options with around 8,500 contracts to 99,574 as of March 9, despite a nearly 8% rise in the most active futures. However, other speculators were buyers of the vegoil and commercial end-users were heavy buyers.
In soybean feed, cash managers cut their net long with around 1,200 futures contracts and options through March 9. That lowered the position to 64,244 contracts, virtually unchanged from the last several weeks.
Most active soybean food futures fell Friday below $ 400 per tonne short for the first time in nearly three months. That deal is also 15% off its recent high set in mid-January, although it is still at a seven-year low for the time of year.
Soybean oil futures will continue to rock higher on tightening global vegetable oil supply and strength in crude oil. The most active contract is up nearly 31% since the beginning of the year, compared to the early 2008 rally. On Friday, the deal hit 55.59 cents per pound, the highest level since September 2012.
The biggest relative change by money managers in the weekly wheat contracts ended on March 9 in Minneapolis wheat, as they increased their net with nearly 2,500 revenues and options contracts to 16,590. That’s almost at the top of their peak since January 2017.
Concerns remain that attractive prices for oilseeds and corn will encourage American and Canadian farmers to plant far fewer acres of spring wheat, which is valuable for its elevated protein levels.
On March 9, Chicago wheat cash managers stood at 27,576 futures and options contracts and their Kansas City net long at 47,664 contracts, both down just over 4,000 contracts from the previous week. That remains a very bullish KC outlook for the time of year, but it is the most optimistic currency in three months.
Winter wheat contracts went down last week when a major storm system was about to move across the United States over the weekend, dumping a lot of snow and rain on wrapped winter wheat crops, which will begin sleep deprivation at this time of year. Winter wheat in other parts of the world is generally in good condition.