Funds cling to bullish wheat stance, but wary of corn, soy

Karen Braun –
Speculators are not yet ready to ditch the wildly bullish wheat story, though they remain cautiously bearish toward Chicago-traded corn and soybeans. In the week ended August 28, hedge funds and other money managers cut their net long position in CBOT wheat futures and options to 51,180 contracts from 60,812 in the previous week, according to data from the US Commodity Futures Trading Commission.
Funds also trimmed bullish bets in Kansas City wheat futures and options to 61,460 contracts from 64,373 a week earlier.
The winter wheat futures market started to get toppy early last month does as most of the worldwide wheat harvest concerns had already been priced in to the market. Still, through August 28, money managers’ combined net position in CBOT and K C wheat was the largest on record for the week at 112,640 futures and options contracts, narrowly edging 2012.
Money managers continued to be all over the board in Minneapolis wheat futures and options through August 28, slashing their net long to 2,565 contracts from 5,696 a week prior.
Speculative buying in the wheat market resumed last Wednesday on talks that No.1 supplier Russia may soon limit its exports or impose a duty since its crop is likely much smaller than a year ago.
Wheat perked up again on Friday on short-covering ahead of the routine September 3 meeting between Russia’s ag ministry and exporters and a smaller crop in top-five exporter Canada. Statistics Canada on Friday pegged the country’s wheat crop at 28.99 million tonnes, below pre-report trade estimates, USDA’s peg of 32.5 million, and last year’s crop.
Argentina’s currency crisis may have also supported grain futures late last week as news emerged that the government planned to announce a new set of economic measures on Monday, triggering speculation that the actions might include grain export restrictions.
Trade sources indicate that commodity funds were net buyers of wheat over the last three sessions.
Industry estimates of the US soybean harvest have continued to creep higher, but speculators hold a stance identical to two months ago. In the week ended August 28, money managers extended their net short in CBOT soybeans to 53,642 futures and options contracts from 40,049 in the previous week, which was an outlier in the last nine weeks of data.
In the week ended August 28, December soybean meal futures fell 6.9 per cent, the contract’s largest-ever decline over a five-day period. Soybeans and especially soymeal have been under pressure as concerns brew that outbreaks of African swine fever in China’s hog herd could curb feed demand. — Reuters