By Karen Braun
NAPERVILLE, ILLINOIS (Reuters) -Speculators held on to bullish bets in Chicago corn and soybeans last week in hopes that U.S. talks with trading partners might progress, potentially stimulating U.S. grain exports.
U.S. farmers are off to an efficient start on spring planting and crops in South America have good prospects, neither of which are particularly price supportive.
But market uncertainty remains sufficiently elevated as nothing concrete has emerged yet on the U.S. trade negotiation front.
Money managers have held a net long position in CBOT corn futures and options since November. In the week ended April 22, they trimmed that position to 112,805 contracts from 124,573 in the previous week.
The move was interesting because it included the largest weekly addition of gross short positions in six months. However, a sizable number of gross longs also entered the picture, suggesting mixed sentiment.
Both longs and shorts were also added in soybeans, but bulls had the edge. Money managers increased their net long in CBOT soybeans by about 5,000 contracts to 31,067 futures and options contracts.
CBOT July soybean futures were unchanged in the week ended April 22. They climbed 1.3% over the last three sessions, on Friday reaching the most-active contract’s highest price since early February.
U.S. soybeans could be a top casualty of a U.S.-China trade war as they are the leading U.S. export to China of any kind. The two countries’ escalating tariff battle has been seen as potentially favorable to the soybean market as the extremely steep rates may force a deal sooner rather than later.
However, Beijing on Friday denied talks were actively occurring, going against U.S. claims.
Meanwhile, reports circulated on Thursday that Brazil will export more soybeans to China in 2025 amid the U.S.-China conflict. But Brazil recently harvested a record soy crop, meaning this was likely to happen anyway, trade war or not.
Corn and soybean bulls got a nod last week from Japan, which may be considering upping its U.S. corn and soybean imports as part of trade negotiations. Japan is the second biggest U.S. corn and fifth biggest U.S. soybean importer.
SOY PRODUCTS AND WHEAT
Money managers in the week ended April 22 increased their net long in CBOT soybean oil by about 10,000 contracts to 50,899 futures and options contracts.
Uncertainty about U.S. biofuel policy has caused investor sentiment to swing from bullish to bearish several times within the last few months, though healthy global soybean oil demand and robust U.S. exports have recently been supportive.
July soybean oil futures last week topped 50 cents per pound, the most-active contract’s first time above that price level since December 2023.
Funds remain heavily bearish in CBOT soybean meal futures and options, increasing their net short to 73,511 contracts through April 22, up about 4,000 on the week.
Money managers have held a net short in CBOT wheat futures and options since June 2022, a record 147 consecutive weeks. That obliterates the previous record of 100 weeks set between 2015 and 2017.
Funds were mild net buyers of CBOT wheat for a third consecutive week through April 22, though the resulting net short of 89,929 futures and options contracts is well above average for the date.
CBOT July wheat futures had slipped 1% in the week ended April 22 and another 1% over the last three sessions with recently favorable weather in U.S. winter wheat areas and late-week contract lows in European wheat futures.
In the upcoming week, traders will be watching to see how U.S. planting progressed following scattered rains across the Corn Belt last week. The relevant five-year planting averages for Monday’s progress report are 22% for corn and 12% for soybeans.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.