(Reuters) – Speculators hit all-time bearishness in the soy complex for third week in a row, but shaky U.S. weather forecasts have caused a sizeable rupture in corn sentiment, and funds have been on a buying spree ever since.
Money managers slashed their net short position in CBOT corn to 138,758 futures and options contracts from 200,981 in the prior week, according to data from the U.S. Commodities Trading Commission for the week ended June 6.
On the same date in 2015, the corn short was around 110,000 contracts, and 2015 and 2017 are the only two years in which funds were ever bearish on corn in May or June.
A soaking wet, cold spring followed by scarce rain across many portions of the U.S. Corn Belt has led to lower-than-expected corn conditions. Weather models were back and forth last week on forecasted rainfall amounts, but the uncertainty was enough to keep the funds heading for the exit late in the week.
The bearish speculative corn stance through June 13 should drop far below the 100,000-mark for the first time since March 21, as fund buying has been very heavy since June 7.
CBOT corn posted a record volume of over 1 million contracts on June 7, topping the previous record of 930,250 set on March 31, 2016. The volume of 825,629 contracts on June 8 was good enough for fifth all-time.
In the previous two years, the spring and summer rallies had funds maxing out their net longs near 250,000 futures and options contracts after covering between 420,000 and 480,000 contracts along the way.
SOY COMPLEX REACHES BEAR BOTTOM
Speculators hit all-time bearishness in the soy complex for third week in a row, but the week ended June 6 should retain the record.
Funds have been snatching up the oilseed and its products in the days since off the same U.S. weather worries as corn along with some good buying opportunities off 14-month lows in CBOT soybean futures at the end of May.
In the week ended June 6, funds extended their net soybean short to 94,737 futures and options contracts from 89,310 in the week before. This represents the third most bearish spec stance on the oilseed, but based on buying activity since, the record of 103,963 contracts set on May 26, 2015 may not be exceeded in the near term.
The new net short in CBOT soybean meal of 50,941 futures and options contracts – an extension from the 44,500 in the week prior – topped the previous record bearish view of 49,388 contracts in the week ended Jan. 5, 2016.
Money managers extended their net short in CBOT soybean oil to 34,301 futures and options contracts from 22,313 in the previous week. The most bearish stance on the vegoil within the last three years was 50,706 in the week ended April 11.
MINNEAPOLIS LEADS WHEAT
Hot and dry weather is gripping the U.S. spring wheat belt and speculators have not failed to notice. For the first time since Dec. 11, 2012, there are no managed money shorts in the Minneapolis spring wheat market.
The outright long in the week ended June 6 reached 9,486 futures and options contracts and represents both the biggest weekly adjustment in a month the most bullish spring wheat view since Feb. 28. The previous week’s net long was 4,976 contracts.
Front-month Minneapolis wheat futures have been on the climb since early May and hit near two-year highs on June 8. Weather forecasts for the Northern Plains had not shown improvement toward the end of last week, meaning that funds are likely to further extend their long position.
Concerns over less-than-ideal weather has also worked its way into the winter wheat market, but funds did not drastically shift their stance on Chicago wheat last week, cutting their bearish position to 106,136 futures and options contracts from 113,760 in the week prior.
Changes to K.C. wheat views were also subdued as money managers shaved their net long to 2,394 futures and options contracts from 3,221 in the previous week.
