By Karen Braun
NAPERVILLE, Illinois (Reuters) – Last week, speculators were net sellers of Chicago corn and soybeans for the first time in nearly two months.
But for now, they appear less willing to give up their bullishness in corn than they do in soybeans.
In the week ended February 11, money managers cut their net long position in CBOT corn futures and options to 332,389 contracts from 364,217 in the prior week, which had been their most bullish stance since April 2022.
In the same week, they reduced their net long in CBOT soybean futures and options to 28,475 contracts from 57,029 a week earlier, which had been their biggest net long since November 2023.
Not only was this move more consequential for soybeans versus corn because of beans’ smaller overall position size, but more than half of the week’s net selling in soybeans was the result of new gross short positions, a sign of bearish sentiment.
On the other hand, only a very small number of gross shorts entered the picture in corn, meaning that most fund managers are not yet comfortable placing short bets on the yellow grain.
The U.S. Department of Agriculture on February 11 made a larger-than-expected cut to its estimate for global soybean stocks, though they are still seen at all-time highs.
The agency also reduced its forecast for 2024-25 world corn stocks, which are seen falling from year-ago levels. However, corn consumption is expected to rise on the year, driving world corn stocks-to-use to 29-year lows after excluding China.
This divergence between corn and soybean sentiment could be felt in the trade late last week. Most-active CBOT soybean futures on Thursday hit their lowest levels in nearly a month, drifting fractionally lower over the last three sessions.
But most-active CBOT corn rose 2.5% between Wednesday and Friday, hitting a 16-month high on Friday of $4.99-3/4 per bushel.
Both corn and soybean crop conditions fell in Argentina last week despite recent rains, and forecasts suggest the week ahead will be on the drier side. Planting for Brazil’s second corn crop has been slower than in other recent seasons, potentially raising yield risks for later.
However, Brazilian farmers made above-average sowing progress in the last two weeks, and U.S. farmers this spring are likely to boost corn plantings, potentially easing the global supply crunch.
WHEAT AND BEYOND
Money managers through February 11 reduced bearish bets in CBOT wheat futures and options for a second consecutive week, though their net short is near-record large for the date at 82,809 contracts.
That position remains offside in relation to funds’ hugely bullish corn bets, though this gap has eased within the last two weeks. Speculators have never held such bullish corn and bearish wheat bets in data back to 2006.
Most-active CBOT wheat between Wednesday and Friday jumped 4%, reaching four-month highs on Friday based on both weather and geopolitical concerns in the Black Sea. Russian grain crop estimates are starting to slip.
U.S. markets are closed on Monday for a holiday, but Russian wheat export prices as of Monday were up for a fourth consecutive week as an export quota has begun to reduce shipments.
On the corn and soybean side, traders this week will continue to monitor harvest and planting progress in Brazil as well as crop development in Argentina. They will also keep an eye on new-crop U.S. prices in anticipation of the 2025 planting season.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Lisa Shumaker)
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