Speculators have been taking bearish bets on Chicago wheat for nearly two years, but excessively dry weather in Russia, a major exporter, as well as concerns about other wheat crops around the world have recently triggered heavy hedging. short positions.
In the week ending April 30, fund managers reduced their net short position in CBOT wheat futures and options to 47,866 contracts, down from 76,184 the previous week. which represents their least bearish position on wheat since July.
History has strongly suggested the latest movements of funds. Every time funds have been sharply bearish on wheat at this time of year, they have spent at least two weeks being forced to abandon their short positions at some point between April and June, but it is not There is no need for the net short position to completely disappear, as was the case last year.
In the week ending April 30, CBOT wheat futures remained virtually unchanged, despite rising as much as 5%. Rain forecasts for Russia triggered last week’s easing, but the rains disappointed and the forecast was dry again by the end of the week, pushing futures up another 3% at the end of the week. during the last three sessions.
Other wheat flavors were involved in last week’s short covering. In Minneapolis wheat futures and options, money managers reduced their net short position to 9,294 contracts as of April 30, from 24,556 a week earlier, on a 5% jump in futures . This figure reflects net purchases twice as large as the previous weekly record.
In Kansas City wheat futures and options, money managers reduced their net short position to 29,610 contracts from 48,208 the previous week, marking one of the largest series of weekly purchases never recorded. Kansas City and Minneapolis futures also rose between Wednesday and Friday, but to a lesser extent than Chicago’s.
CBOT corn futures fell 1.3% in the week ended April 30 and saw only minimal upside at most, but speculators covered their short positions , as for wheat. Managed silver’s net short position in corn fell to 218,040 futures and options contracts, its lowest level since early January, from 238,546 a week earlier.
On Friday, the most active corn reached its highest level since January 4, but stabilized far from that peak at $4.60-1/4 a bushel, bringing gains in three sessions. Strength in wheat, a weak dollar and floods that disrupted the harvest in southern Brazil supported corn at the end of the week.
OILSEEDS
Last week, CBOT soybean products continued to move in opposite directions, with soybean oil down more than 6% and soybean meal up almost 2% as it had increased by 4%. Both contracts hit multi-year lows this year, meal in February and oil on Tuesday.
During the week ending April 30, fund managers made significant net purchases of soybean meal on the CBOT for the fourth consecutive week, increasing their net long position to 43,596 futures contracts and option contracts, compared to 19,681 a week earlier. This increase is due to both short covering and new long positions, and is the most bullish position in the oilseed meal market since December.
In soybean oil, fund managers established their most bearish position since May 2019 as of April 30, bringing their net short position to 66,882 futures and options contracts, up from 49,528 the week former. This was mainly due to new gross short positions.
CBOT soybean’s 1.6% decline in the week ended April 30 had minimal impact on the fund managers’ massive net short position, which increased by just 222 contracts to 149,236 contracts at futures and options contracts. This figure is identical to that of the same date in 2019.
Soybeans and soybean meal surged late last week following a port workers’ strike in Argentina and flooding in Brazil, which may have reduced soybean production in the state by 15%. 2 from Rio Grande do Sul. Between Wednesday and Friday, beans increased by 4.5% and flour by 5.8%, while oil saw only a slight increase. Karen Braun is a market analyst for Reuters. The opinions expressed above are his own.
