Chronicle: Funds shave bullish CBOT bets as weather-related rally begins

Grains of wheat are seen at the Farmers Cooperative Exchange during harvest in Bessie, Oklahoma, U.S., June 12, 2019. REUTERS/Nick Oxford

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NAPERVILLE, Ill., July 31 (Reuters) – Chicago grain and oilseed futures rallied in historic fashion last week as hot and dry August forecasts threaten to limit harvest potential in the states States, but speculators did not materially change their bullish views a few days later. price spike.

Like many others in recent months, the week ended July 26 was characterized by “round trip” price action, where CBOT corn and soybean futures fell sharply and then rallied. increased again during the period. This dampened overall speculative activity for the week, which had been well reflected in trade estimates.

Below-average open interest likely dampened buying and selling, and this was particularly evident for CBOT wheat with small fund movements despite extreme price swings. Open interest in CBOT wheat futures and options as of July 26 was down 5% from a year ago, but down 13% from the same date in 2020.

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One- and two-year open interest differences are largest for CBOT soybeans, down 18% and 25%, respectively, and for corn, they are down 8% and 7%.

The most active corn and soybean futures rose 0.9% and 1.9%, respectively, in the week ended July 26, although they were both down more than 5%. % during the period, reaching the lowest levels since the end of 2021.

Data from the U.S. Commodity Futures Trading Commission showed on Friday that the managed money net long position in CBOT corn futures and options fell by less than 5,000 contracts through the 26 July to reach 120,788 futures and options contracts, mainly on the reduction of long positions.

Fund managers shaved 156 contracts from their net long position in CBOT soybean futures and options, which rose to 87,676 contracts after adding a small number of long and short positions.

The funds sold CBOT wheat futures and options for a tenth consecutive week through July 26, taking their net shorts to 10,391 contracts from 6,816 a week earlier. The most active futures fell 1% over the week.

On CBOT corn, wheat, soybeans and soybean products, Kansas City wheat and Minneapolis wheat, fund managers increased gross short positions by 5% in the week ending on July 26, but also increased long positions by 1%. Raw longs and shorts are both below average for the time of year, although longs have contracted 20% over the past four weeks.

Combined Gross Shorts of Money Managed in CBOT/MGEX Futures and Options
Managed money combined gross long positions in CBOT/MGEX futures and options

Funds were likely to be bulls late last week, particularly in soybeans and soybean oil, as futures rallied sharply on the hot and dry US weather outlook and l uncertainty about the future of grain exports from Ukraine.

The most active CBOT soybean is up 6.1% over the past three sessions, while soybean oil added 13.3%, hitting one-month highs on Friday. CBOT soybeans jumped nearly 13% in the six sessions ending Friday, the biggest percentage increase in the most active contract since October 2009.

CBOT corn added 3.2% between Wednesday and Friday, but the most active wheat and soybean meal gains were lighter at 0.5% and 0.2%, respectively.

Karen Braun is a market analyst for Reuters. The opinions expressed above are his own.

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Editing by Sam Holmes

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