(The opinions expressed here are those of the author, a market analyst for Reuters.)

FORT COLLINS, Colo. - Many speculators were on the wrong side of the Chicago wheat market when Russia invaded Ukraine and therefore unprepared for last week’s price action in the futures market.

The two Black Sea grain giants cover more than a quarter of the world’s wheat exports and Ukraine is a top corn exporter, and both countries’ shipping programs have been largely non-existent since the invasion began late last month.

Low liquidity has been a theme in CBOT wheat this year as open interest was running at 13-year lows through late last month. Futures had hit nine-year highs in November and immediately after, money managers took a net short position in CBOT wheat that peaked in mid-February.

Most-active CBOT wheat futures surged 31% in the week ended March 8, reaching an all-time high of $13.63-1/2 per bushel on March 8. Money managers through that period established a net long of 20,208 futures and options contracts versus a net short of 7,036 on March 1.

Much of that move was short covering, which near 19,000 contracts was funds’ largest short escape in two years. Index traders increased their total number of CBOT wheat positions by 9% on the week, reaching the highest levels since November.

However, end users were not necessarily spooked as they added just over 6,000 CBOT wheat shorts through March 8. They also eliminated about 6,700 longs, and their net short of 14,546 futures and options contracts is the largest since November.

Panic buying among end users was the theme in corn for the week ended March 8. Commercials added 73,492 gross corn shorts, the most for any week since January 2021. They also added 53,210 corn longs, the most since May, and their net short of 435,805 futures and options contracts is approaching last year’s record levels.

Data from the U.S. Commodity Futures Trading Commission on Friday also showed that money managers were corn buyers through March 8. They extended their net long in CBOT corn futures and options to 368,784 contracts from 349,222 a week earlier.

Money managers covered about 11,000 gross corn shorts during the week, dropping that total to 10,365 contracts, the fewest since July 2012. Corn open interest jumped 4% on the week to 2.05 million contracts, some 13% below last year’s levels.

Corn futures had risen nearly 4% in the week ended March 8, and they added another 1.3% in the following three sessions. Friday’s settle of $7.62-1/2 per bushel is the most-active contract’s highest since 2012.

CBOT wheat open interest had risen 10% in the two weeks ended March 8, but it remained below average. Most-active futures dropped 14% between Wednesday and Friday, though the selloff paused on Friday, as May wheat rose 1.8% and ended at $11.06-1/2 per bushel.

Commodity funds are thought to have sold 34,000 CBOT wheat futures contracts over the last three sessions, which would erase the speculative net long if true. Funds were seen as modest buyers of corn, light buyers of soy products and light sellers of soybeans.


Soybeans have taken a backseat to the grains amid the Ukraine crisis, though they have remained mostly supported by both related and unrelated events. Ukraine is the top sunflower oil exporter, creating an even tighter situation for global vegoils.

Soybean oil prices have also been bolstered by surging crude oil, which hit 14-year highs last week with Russian supplies in jeopardy due to sanctions and bans.

Outside of the Black Sea, crop estimates have been slipping for Brazil’s drought-stricken soybeans, and global buyers including China have been flocking to the United States to secure supplies.

Most-active CBOT soybean futures were unchanged in the week ended March 8, and money managers trimmed about 4,000 contracts from their net long, which fell to 171,714 futures and options contracts. That is slightly more bullish than their year-ago view.

Money managers are a bit less optimistic on soybean oil than a year ago, but the net long of 85,669 futures and options contracts is well above average for the date and represents an increase around 4,200 on the week.

Speculators’ soybean meal stance is highly bullish for the date. Money managers added about 1,800 contracts through March 8 and their net long climbed to 96,627 futures and options contracts. That marked a sixth consecutive week of net buying.

Most-active soybean meal and oil futures rose fractionally in the last three sessions, though soybeans fell nearly 1%. Soybean meal on Thursday hit $490 per short ton, the most-active contract’s highest level since June 2014.

Soybean oil futures on Wednesday hit an all-time high of 78.58 cents per pound. The most-active contract has risen nearly 35% so far in 2022.

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

(The opinions expressed here are those of the author, a market analyst for Reuters.)

(Editing by Matthew Lewis)