Column: Funds hesitate to shift CBOT grain, oilseed views as futures surge -Braun

FORT COLLINS, Colo., March 6 (Reuters) – Chicago grain and oilseed futures have had a rowdy begin to March as warfare has erupted between two key exporters.

However regardless of the market volatility, buyers have been considerably extra timid than anticipated in the case of large place strikes, the second week in a row for such a theme.

Commodity funds had been pegged as consumers of greater than 100,000 mixed CBOT corn and wheat futures within the week ended March 1, however wheat shopping for was comparatively mild, and the commerce had the utterly flawed learn on corn.

Buyers’ outright brief positions throughout Chicago grains and oilseeds are traditionally mild, particularly in corn and the soy complicated. Nevertheless, industrial finish customers’ outright shorts are sizable, leaving them uncovered throughout value surges as occurred final week.

World commodity markets have been rocked by Russia’s invasion of Ukraine because it started full-on late final month. The 2 international locations account for 29% of world wheat exports and practically 80% of sunflower oil. Ukraine ships 16% of the world’s corn, and exports out of the area are successfully lower off.

Chicago wheat futures throughout the final a number of classes have reached costs seen solely a handful of instances, all in 2008. Might wheat settled up the day by day 50 cent-per-bushel restrict on March 1, capping off a 15% acquire for the week.

However cash managers axed solely 11,000 futures and choices contracts from their CBOT wheat internet brief within the week ended March 1, a fraction of expectations, in response to information from the U.S. Commodity Futures Buying and selling Fee.

That was evenly cut up between new longs and brief masking, and the ensuing internet in need of 7,036 contracts is funds’ least bearish since December.

CBOT Might wheat settled up the expanded 75-cent restrict in every of the final three classes, a staggering 23% acquire, ending Friday at $12.09 per bushel. December futures ended 5% increased between Wednesday and Friday, ending at $9.80 and at an unprecedented low cost to close by contracts.

Industrial gross shorts in CBOT wheat as of March 1 have been a bit above the latest common for the date at 191,381 contracts. That features a weekly surge of practically 20,000 contracts, essentially the most since November, which is equal to 100 million bushels.

CORN AND SOY

Industrial finish customers’ gross shorts in CBOT corn and soybeans are effectively above regular however off the year-ago highs. They’ve maintained corn shorts in latest weeks round 1.18 million contracts, although they shed 8% of soybean shorts within the final two weeks, placing it close to 570,000 contracts on March 1.

Most-active corn futures jumped virtually 8% within the week ended March 1, prompting expectations for big fund shopping for, however cash managers diminished their internet lengthy to 349,222 futures and choices contracts from 354,436 every week earlier. Each longs and shorts have been eradicated, and the week featured funds’ largest brief masking in corn since October.

Soybean futures climbed 3.4% via March 1, and cash managers trimmed their internet lengthy by about 4,600 to 175,721 futures and choices contracts, additionally in opposition to the prediction for getting. Few outright soy shorts stay to be lined as that quantity dropped beneath 10,000 final week.

The lack of corn exports out of Ukraine and considerations for its upcoming harvest, in addition to uncertainties over U.S. plantings of each corn and soybeans, have been the main focus for corn and bean merchants final week. Export demand for U.S. soybeans has been very sturdy in mild of Brazil’s excessive crop shortfalls.

Might corn rose practically 4% within the final three classes although the vary lined greater than 70 cents per bushel, settling Friday at $7.54-1/4 after reaching the best ranges since 2012. Might beans fell 1.7% through the interval with a variety of practically 65 cents, ending Friday at $16.60-1/2.

Karen Braun is a market analyst for Reuters and views expressed above are her personal.

Enhancing by Matthew Lewis

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