NAPERVILLE, Illinois, March 31 (Reuters) – Speculators
maintained their big short in Chicago corn in front of pivotal
U.S. government data showing U.S. farmers planting fewer corn
acres than expected.
In the week ended March 26, money managers slightly
increased their net short in CBOT corn futures and options to
251,730 contracts from 242,988 in the prior week, predominantly
on new gross short positions.
That is well off the record 340,732 contracts set five weeks
earlier though still very bearish for any time of year, leaving
investors vulnerable to bullish market forces.
The U.S. Department of Agriculture on Thursday pegged U.S.
corn plantings nearly 2% below the average trade guess, and
most-active CBOT corn futures surged 3.6%, their best
session in months.
Funds’ corn positioning has recently resembled that of early
2019, when new record shorts were forged in both March and
April. However, both U.S. corn acres and quarterly stocks were
notably bearish in March 2019, opposite to this year’s outcomes,
which also featured smaller-than-predicted March 1 corn stocks.
Money managers in the week ended March 26 covered some short
positions in CBOT soybeans, trimming their net short to 134,780
futures and options contracts from 148,339 a week earlier.
U.S. soybean plantings landed on the average trade guess and
quarterly stocks were a bit larger than anticipated, and CBOT
soybean futures drifted fractionally lower between
Wednesday and Thursday. U.S. markets were closed on Friday.
Funds achieved a new record bean short in early March, but
they had also set records in April and May of 2019, similar to
corn. Soy acres were bullish and quarterly stocks bearish in
March 2019, though U.S. bean supplies were overly stuffed at
that point off the trade war with China.
U.S. planting delays prompted funds to start covering corn
and bean shorts in mid-May 2019. Funds were net long corn by the
end of May but stayed short beans until October 2019, as
supplies were still plentiful despite a huge loss in U.S. soy
acres that year.
Brazil and Argentina both harvested record corn crops in
2019 and soybean production was sufficiently strong, supporting
the bearish narrative. Those countries are seen harvesting
healthy, but not record crops this year, though Argentina’s corn
output could contend.
The threat of dry weather has been lingering for many of
Brazil’s corn producing regions, where the heavily exported
second crop is moving toward its key development period. Sunday
evening weather models show decent rain over the next couple
weeks in the center-west but drier prospects for the south.
Money managers in the week ended March 26 flipped to a net
long in CBOT soybean oil futures and options of 951 contracts.
That compares with a net short of 14,748 a week earlier and
62,473 contracts three weeks earlier. Most-active soyoil futures
rose 7.5% in those three weeks but fell 1% between
Wednesday and Thursday.
Karen Braun is a market analyst for Reuters. Views expressed
above are her own.
(Editing by Michael Perry)
