Column: Funds cover short positions on CBOT but fall back on heavy data from the USDA

FORT COLLINS, Colo. (Reuters) – Speculators began hedging short short futures on Chicago-based grain and oilseed futures last week, but were pulled down with large inventories. of the US government Friday.

It is somewhat unusual that funds allow them to build such shorts just before the very strong corn and soybean growing season in the United States, but the increase in national stocks means that the cushion is larger than before.

During the week ended March 26, hedge funds and other money managers were net purchasers of all CBOT futures and options on grains and oilseeds, with the exception of soybean oil. , according to data from the Commodity Futures Trading Commission of the United States.

However, positions on corn, soybeans and winter wheat remained strongly bearish, even after the positions were down. This week is also the first since last November that the funds hold net short positions in the CBOT market, including Minneapolis wheat.

Most speculators position adjustments made last week are due to a short hedge, especially in corn, wheat and soy cakes. Severe flooding in the US Midwest and the Plains forced traders to take precautionary measures before the planting season. Technical purchases were also significant during the period.

But the US Department of Agriculture's super-bearish data on Friday overturned the brewing market's optimism in cereals, and corn was the hardest to beat.

The USDA has determined that corn plantings in the United States are higher than expected by the 1.5 million acre market and that mid-season national corn inventories reached 270 million acres. bushels heavier than expected.

CBOT corn 's most active forward prices plunged 4.7% on the news, the largest single – day percentage decline for the contract since July 5, 2016.

During the week ended March 26, money managers reduced their net short position in corn futures and options to 203,414 contracts from 261,326 a week earlier, a record high. (Tmsnrt.rs/2V0y2oZ)

If the trade estimates are correct, the funds pulled out to reach a maize territory record at the end of the session on Friday.

As the US planting season is about to start, investors will inevitably look to cover their corn stocks sometime in the coming months. But when they do, the producers, who have been stingy sellers, will be there to wait to sell their maize, thus limiting the potential for rallying and the longevity of the futures contracts. (Tmsnrt.rs/2V37SlK)

The USDA placed soybean inventories on March 1 at record levels, a figure slightly above market expectations. But acreage in acres was down 1.55 million euros from commercial expectations, which limited losses for soybean futures on Friday.

Until March 26, the portfolio managers reduced their net worth of soybeans to 51,394 futures and options, up from 63,992 in the previous week. Trade estimates suggest that soybean sales sold between Wednesday and Friday, which would bring them closer to the bearish levels of the previous week, Friday. (Tmsnrt.rs/2HNS6Z8)

China, the largest buyer of US soybeans, bought 1.5 million tonnes of oilseeds on Thursday, but traders are less and less interested in every announcement, as the trade dispute between China and China has not been resolved. resolved.

US and Chinese officials met in Beijing last week to advance trade talks, described as "frank and constructive" by the White House. Discussions will continue in Washington next week.

SOY AND WHEAT PRODUCTS

During the week ended March 26th, fund managers abandoned their last bullish position on the CBOT market, setting a net shortfall in soybean oil of 8,320 futures and options. The previous week, they had held 10,376 contracts.

In terms of soybean meal, the funds significantly reduced their bearish wagers to 29,065 futures and options out of 12,063 in the previous week.

These movements in soy products have brought the bullish position of speculators in CBOT oil sharing, which measures the share of soybean oil value in products, at a near-zero level. stable. The net balance was only 3,743 contracts against 40,221 during the previous week. (Tmsnrt.rs/2V4Epb7)

It is unlikely that the slightly upward view of oil-sharing has changed significantly in the last three sessions as commodity funds are seen as light sellers of both oilmeal and meat pie. .

In Chicago futures and options, money managers reduced their net balance to 63,753 contracts up to March 26 from 73,506 in the previous week.

They also reduced their Kansas City short futures and options on wheat to 48,488 out of 51,380 contracts the previous week, which was a record high.

Money managers significantly reduced pessimistic views on Minneapolis wheat futures and options to a net balance of less than 1,475 contracts, up from 7,242 a week earlier. It was one of the largest weekly purchases of spring wheat funds. (Tmsnrt.rs/2HNNIJg)

Friday's USDA data was not very bearish for wheat, but corn futures were acting as an anvil on grains. The most active wheat futures were down 2.1% on the day and commodities funds were badumed sellers in the last three sessions.

In the United States, all wheat plantings were more than one million acres below the trade estimates, which were far too high for spring and durum acres. March 1 wheat inventories were 2 percent above forecasts.