Last week, speculators set record net short positions in both corn and soybean futures and options on CBOT, as prices for these commodities continued to fall amid a favorable supply outlook.

Fund managers had already achieved record net short positions earlier this year. Since then, new crop corn and soybean futures on CBOT have decreased by 10% and 7%, respectively.

In the week ending July 9, fund managers increased their net short positions in CBOT corn futures and options to 353,983 contracts from 336,538 the previous week, largely due to the addition of new short sell orders.

Similarly, fund managers also increased their net short positions in CBOT soybean futures and options to 172,605 contracts from 140,926 contracts, largely driven by new short sell orders. About 92% of this position was established in the last 6 weeks – one of the largest soybean shorting streaks by funds.

The previous records for fund managers' net short positions in CBOT corn and soybean futures and options were 340,732 and 171,999 contracts, respectively, recorded in the weeks ending February 20 and March 5.

Prior to 2024, fund managers had held net short positions of 322,215 corn contracts on April 23, 2019, and 168,835 soybean contracts on May 14, 2019.

The combined open interest (OI) for both corn and soybean futures and options on CBOT is 3.08 million contracts – the third highest ever recorded, noted in the second week of July, after 2018 and 2019. This figure is also approximately 6% above the 5-year average for all weeks.

Corn futures for December and soybean futures for November at CBOT both fell by 3% in the week ending July 9.

Soybean and Wheat Products

December soybean oil futures on CBOT reached a 3-month high in early July, and futures prices increased by up to 4.6% in the week ending July 9, although prices overall fell by 1%.

During the same week, fund managers reduced their net short positions in CBOT soybean oil futures and options to 17,018 contracts from 61,854 contracts the previous week; in the two weeks prior, net short positions were 108,483 contracts.

The net long positions of more than 91,000 contracts over two weeks, largely due to the buyback of previously shorted contracts (short-covering), are the highest for any two-week period. The previous highest recorded was around 69,000 contracts in August 2016.

This occurred as long soybean meal and short soybean oil positions were reduced. As of the week ending July 9, fund managers cut their net long positions in soybean meal for the fifth time in six weeks. December soybean meal prices fell by about 3%, and the net long positions of funds decreased to 60,693 futures and options contracts from 73,459 the previous week.

In the last three sessions (up to July 15), both soybean meal and soybean oil prices fell by 1.5%, with soybean meal futures reaching a low on Friday.

September wheat futures at CBOT declined by 1.5% in the week ending July 9, with futures prices continuing to fall in subsequent sessions and hitting a low at the end of the week on July 12, as USDA forecasted a bumper wheat harvest in the U.S.

However, last week, fund managers reduced their net short positions in CBOT wheat futures and options by about 5,000 contracts to 69,137 contracts. This reflects their bearish outlook on wheat, only surpassed by the bearish sentiment seen in 2016.

Source: Reuters