COLUMN-Funds buy corn, wheat and soybean oil after USDA stocks data -Braun

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(The opinions expressed here are those of the author, a Businesshala market analyst.)

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Fort Collins, Colo., Oct 10 (Businesshala) – Speculators were buyers of Chicago corn and moderate sellers of soybeans in recent weeks, despite expected heavy stocks for US corn and soybeans in particular. This was partially supported by bullish sentiments in other markets including wheat, soybean oil and energy.

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Money managers added approximately 6,000 CBOT corn futures and options contracts to their net long positions in the week ending October 5, reaching 250,596 contracts. This is according to data published by the US Commodity Futures Trading Commission on Friday afternoon. (tmsnrt.rs/3ByY5Jl)

That week included the US Department of Agriculture’s quarterly grain stock report, which showed the September 1 corn inventory to be slightly larger than analysts thought. Just before that data, the funds staged their biggest corn buying week since December, presumably thanks to the bullish data.

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The most active corn futures rose 0.9% since October 5, but they lost more than 1% over the past three sessions. Friday’s settlement of $5.30-1/2 per bushel is up 6.6% from the most recent low set Sept. 10.

Traders await the USDA’s next outlook on the US corn and soybean harvest, which will take place at noon EDT (1600 GMT) on Tuesday. The production of maize in the market is lower than last month’s estimate.

soybeans and products

U.S. soybean yields are expected to increase from earlier numbers, given the strong reports so far in several states. U.S. soybean supplies on Sept. 1 were much larger than expected, topping all trade estimates and setting off a boost to end stock estimates for the current marketing year.

The most active soybean fell 2.1% for the week ended October 5, hitting its lowest level since December 2020. Money managers in that period reduced their net longs in CBOT soybean futures and options to 49,453 contracts, from just under 10,000 contracts. Funds also bought beans prior to the quarter’s stock, though to a lesser extent than corn.

Soy futures fell partly between Wednesday and Friday, though investors may not be ready to dump oilseeds on firmness in soybean oil futures, which on Friday hit an all-time high since August 17.

US crude oil and gasoline futures on Friday both closed at their highest level since October 2014 amid the global energy crisis. Malaysian palm oil futures hit an all-time high on Friday.

Soybean oil futures are well off June’s record, although the most active soybean meal contract on Friday hit its lowest point since September 2020 at $318 per short ton. Food futures are down about 32% from year’s highs in January last week.

Strong oil and weak food led to an increase in CBOT oilshare, which measures the share of the value of soy oil in soy products. Money managers have been bullish on OilShares since the start of 2020, although that optimism trailed 100,000 contracts in the latest week. (tmsnrt.rs/3Bu5JET)

Through October 5, money managers increased their net short in CBOT soybean meal futures and options to 32,064 contracts from the previous week’s 14,964. During the same period, his net long in soybean oil rose to 75,178 contracts from 47,490 a week ago, the fund’s strongest buying week in more than two years.

Wheat

Wheat has recently supported grain futures as US stocks were lower than expected on Sept 1 and supplies in top exporter Russia dwindled. Wheat, the most active CBOT, jumped 5.4% in the week ended October 5, reaching the highest price since mid-August and the year’s highest price since 2012.

During that week money managers flipped net long positions of 5,212 CBOT wheat futures and options contracts from a net decrease of 9,815 a week earlier. He was mostly on the add-on for a long time.

He increased his Kansas City wheat net from nearly 4,000 to 49,946 contracts, his fastest in seven months. The funds added 549 contracts to their Minneapolis Wheat Net Long, reaching 15,337 futures and options contracts as of October 5.

Editing by Richard Pullin

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