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

FORT COLLINS, Colo.- Speculators began covering short positions in Chicago-traded corn last week amid dry weather in the U.S. Corn Belt, though they still hold by far the most bearish-ever views toward the yellow grain for the time of year.

Investors also hold record short positions for mid-June in soybean meal, Kansas City wheat and Minneapolis wheat, as both U.S. and global grain and feed supplies remain ample.

Hedge funds and other money managers finally started to chip away at their massive net short in CBOT corn through June 16, cutting it to 270,751 futures and options contracts from 297,312 a week earlier. That is according to data published Friday by the U.S. Commodity Futures Trading Commission. 

That was funds’ biggest net buying week in corn since late January, and the move was comprised of both short covering and the addition of new longs. 

Huge U.S. corn supplies and the expectation for a record crop have kept weather concerns in check. The Department of Agriculture last week cut corn conditions by 4 points, the largest weekly cut in eight years, but that failed to generate the same market excitement that it might have in other years.

Crops in nearly every part of the U.S. Corn Belt needed rain within the last week. Weather forecasts suggested that most of the Belt would get some moisture starting late last week and continuing over the weekend, but weather models disagreed on the amounts.

Most-active corn futures rose 1.1% over the last three sessions, and trade estimates suggest commodity funds cut down on their bearish corn view even more during the period. Futures have risen more than 6% since their most recent lows from late April.

SOY OPTIMISM, WHEAT PESSIMISM

Speculators’ huge corn short means they still have a massively bullish bet on soybeans relative to corn, although that was reduced through June 16 from the prior week’s record. 

Money managers did not do much with soybean futures and options, slightly expanding their net long to 21,183 contracts through June 16 from 20,376 in the previous week.

Increased Chinese purchases of U.S. soybeans are still the trade’s focus, and as of June 11, China had booked the largest volume of new-crop soybeans in six years. Bloomberg reported Friday that during last week’s meetings with U.S. officials in Hawaii, Beijing said it planned to accelerate U.S. farm purchases.

Most-active soybean futures rose 1.1% over the last three sessions, on Friday hitting the highest mark since April 1. Funds likely accelerated bullish soybean bets late last week.

But they maintained pessimism toward soybean meal through June 16, despite trimming their net short to 48,208 futures and options contracts from 52,986 a week earlier. That is funds’ most bearish meal view for the time of year, and it is very similar to their 2017 position. 

Money managers increased slightly bearish bets in soybean oil futures and options to 4,786 contracts from 56 in the prior week. However, trade estimates suggest funds were flat by the end of the week, as most-active futures BOv1 on Friday reached their highest point since March 6.

CBOT wheat futures also reached a milestone on Friday with the most-active contract hitting the lowest level since Sept. 12. That follows funds’ extension of their net short to 30,251 futures and options contracts through June 16 from 25,368 in the prior week.

Investors likely continued that selling streak between Wednesday and Friday as futures slid 3%. Harvest is underway in the United States and global wheat crops are generally in stable or good condition.

Money managers boosted their net short in Kansas City wheat futures and options through June 16 to 27,490 contracts from 18,738 a week earlier. The new stance is funds’ most pessimistic since early November and it is their most bearish-ever K.C. bet for the time of year.

Funds cut their net short position in Minneapolis wheat futures and options for the fourth week in a row through June 16, moving to 17,103 contracts from 19,228 in the previous week. That is their least bearish stance since mid-April, but it is still by far their biggest mid-June short.

(Editing by Leslie Adler) ((karen.braun@thomsonreuters.com; +1 (312) 408-8059; Reuters Messaging: karen.braun.thomsonreuters.net@reuters.com; Twitter: @kannbwx))