NAPERVILLE, Illinois, Oct 13 (Reuters) - With global crop risks looming, speculators abandoned more bearish bets last week in Chicago corn and soybeans having been record short in both just three months ago.

The net buying came ahead of Friday's pivotal supply and demand data from the U.S. government, and the moves were enough to flip collective fund sentiment from bearish to bullish in U.S. grain and oilseed futures and options as of Oct. 8.

The combined net long, including CBOT corn, soybeans, soy products, wheat, and both Kansas City and Minneapolis wheat, was money managers’ first since September 2023.

That is currently anchored by heavily bullish bets in soymeal and more modest ones in soybean oil, though funds’ sharp reduction in corn and soy bearishness has facilitated the flip into bull territory.

However, the net long could be short-lived if the downward price pressure observed late last week carries over into this week.

CORN AND SOYBEANS

In the week ended Oct. 8, money managers reduced their net short position in CBOT corn futures and options to 23,729 contracts, their least bearish corn stance since early August 2023. That compared with 67,699 contracts in the prior week, and the move was driven entirely by short covering for a second straight week.

Most-active CBOT corn futures had shed nearly 2% through Oct. 8 and CBOT soybeans dropped almost 4%, but money managers cut their net short in CBOT soybeans to a 19-week low of 21,798 futures and options contracts.

That was a reduction of more than 13,000 contracts on the week, the result of new gross longs. Funds had been covering bean shorts somewhat aggressively over the previous few weeks.

Worldwide crop concerns had pushed corn and soybean futures to multi-month highs on Oct. 2 and Sept. 30, respectively. But the trajectory has since been downward as rains have returned for some drought-concerned areas, and U.S. farmers are efficiently wrapping up a bumper season.

Speculators may have been attempting to reduce risk ahead of Friday’s data from the U.S. Department of Agriculture, which yet again revealed comfortable supplies. Both corn and soybean futures slid on Friday, losing about 1% each over the last three sessions.

SOY PRODUCTS AND WHEAT

Money managers’ net long in CBOT soybean meal is record large for the date, but they cut their position to 96,588 futures and options contracts through Oct. 8, a reduction of about 6,600 on the week. That was associated with a 7% dive in meal futures .

Soybean oil is the only other U.S. grain or oilseed where money managers hold a net long, and they doubled it in the week ended Oct. 8 to 32,503 futures and options contracts. That is their most bullish oil stance in a year.

Along with soybeans, CBOT soymeal futures have eased this month, on Friday hitting their lowest levels in more than five weeks. But global vegoil prices remain strong, and CBOT soybean oil drifted slightly higher in the last three sessions.

Chicago wheat futures have also held up relatively well considering recent declines in corn. Futures eased fractionally through Oct. 8, and money managers expanded their net short to 29,449 futures and options contracts from 22,953 a week before, which had been their least bearish view in two years.

Wheat traders have been watching dryness in top supplier Russia and its recent jump in export prices, as well as risks to wheat crops in the Southern Hemisphere. Missile attacks in Ukrainian grain ports have also added to the uncertainty.

Parched areas of Russia may be due for some showers this week, and rains are also expected for the driest areas of Brazil, where soybean planting has been slow. This, along with the presumably quick U.S. corn and soy harvest pace, will be in focus early this week.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.

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https://www.reuters.com/markets/europe/funds-establish-first-net-long-across-us-grains-oilseeds-13-months-2024-10-14/