(The opinions expressed here are those of the author, a market analyst for Reuters.)
NAPERVILLE, Ill. - Speculators’ enthusiasm toward Chicago-traded grains and oilseeds crept closer to record levels last week as tighter-than-usual world stockpiles and uncertainty in Ukraine continue to support prices.
Minimal grain and oilseed shipments out of Ukraine have disrupted and even rerouted global trade, one example being China’s recent U.S. corn purchases, the first in nearly a year. Moscow suggested last week that the conflict’s end may not come soon, further spooking traders.
Ukraine’s agriculture ministry said Friday that farmers might plant more spring crops than previously thought, but still 17% less than last year. Apprehension toward production potential and weather in North and South America has also added to jitters.
However, some bearish factors lurk. Agricultural import demand from top global buyer China has been somewhat disappointing amid lockdowns and poor producer margins, largely affecting soybeans. U.S. farmers are expected to plant a record soybean area this spring.
In the week ended April 12, money managers increased their net long in CBOT soybean futures and options to 171,873 contracts from 163,655 a week earlier, according to data from the U.S. Commodity Futures Trading Commission.
That was based on the addition of new longs and was associated with a 2.4% gain in most-active soybean futures , which traded just shy of $17 per bushel last Monday.
New-crop November soybeans briefly traded below $14 per bushel on April 1, the lowest since early February, but they reached $15.20 on Thursday before settling at $15.01-1/2. The contract high of $15.55 was set on Feb. 24.
The U.S. markets were closed on Friday, but the U.S. Department of Agriculture announced a slew of soybean sales that morning totaling 838,000 tonnes, predominantly to China. Some 64% of that was for 2022-23 delivery.
Also on Friday, the National Oilseed Processors Association showed that U.S. soybean oil stocks at the end of March fell 7.3% on the month, though they were predicted to rise fractionally. A lower oil yield and stronger-than-expected demand are likely culprits.
CBOT soybean oil futures on Wednesday hit an all-time high for the most-active month of 78.75 cents per pound after rising 4.2% in the week ended April 12. Money managers increased their net long by about 7,300 contracts that week to 84,063 futures and options contracts.
Soyoil rose another 2% in the last two trading sessions. Benchmark Malaysian palm oil futures on Friday closed at a one-month high, capping off its biggest weekly gain in six months. Tight vegoil supplies have been made worse by the export halt in Ukraine, the top supplier of sunflower oil.
CBOT soybean meal was the only loser among the grains and oilseeds through April 12, shedding 1%, and money managers cut more than 7,000 contracts from their net long. However, the resulting 93,411 futures and options contracts is extremely bullish in context.
Money managers through April 12 lifted their net long in CBOT corn futures and options to 369,952 contracts from 362,306 the week before. Most-active CBOT corn added more than 2% in the period and gained an additional 1% between Wednesday and Thursday.
End users bought more corn through April 12, and commodity index traders increased their total number of positions by 2% to over 700,000 contracts, the most since June 2021.
Aside from corn supplies out of Ukraine, market participants have been concerned with the cold U.S. weather and the potential impact on corn planting, though forecasts late last week showed chances for favorable warmth toward the end of the month. CBOT corn hit contract highs on Thursday, including $7.39 per bushel for new-crop December futures.
Wheat traders are still uneasy about the conflict in key exporter Ukraine and the poor state of the U.S. wheat crop. CBOT wheat futures surged 6.4% in the week ended April 12. Kansas City wheat added 7.6% and Minneapolis rose 4%.
Money managers in that period added less than 3,000 contracts to their CBOT wheat net long, which reached 16,639 futures and options contracts. They added more than 4,000 K.C. contracts, and their net long of 49,392 is a 14-week high. Their Minneapolis net long remained above 18,000 contracts.
All three wheat contracts drifted fractionally lower between Wednesday and Thursday. Most-active Chicago wheat Thursday hit $11.35-1/4 per bushel, its highest since March 23, though it settled at $11.04-1/2. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Editing by Lisa Shumaker)