Corn, soybeans target longs as China buys US and wheat diverges

24 Apr 2023 | Tim Worledge

A burst of Chinese buying of US corn and the release of the April update to the USDA’s influential supply and demand report was enough to support investors holding long positions for corn and soybeans in the week to April 18, data from the Commodity Futures Trading Commission showed.

The commitment of traders data, released late Friday, also showed a continuing divergence in wheat outlooks, as Chicago soft red wheat futures sank deeper into net short, Kansas hard red winter moved further into net long and Minneapolis was held in near-perfect balance.

Starting with corn, the recent burst of buying from China alongside the paring back of Argentinian production estimates that fed into reduced ending stock estimates lured managed money investors into adding 7,225 new long contracts over the week.

However, the move was underpinned by the loss of 15,097 short positions in the same week, enough to take total longs to 220,716 – an eight-week high – and reduce shorts to 171,282.

That took the net long to 49,434 over the week – up 22,322 on the previous week and marking the third straight week back in an overall net long stance.

Soybeans reported a similar dynamic – again, also largely reflected revised outlooks for Argentinian soybean output – but investors added both long and short positions over the week, the data showed.

A slim 1,561 new short positions were added to take the total to 19,191 lots – but were comprehensively overwhelmed by the addition of 11,321 new long positions that took the total to 153,973.

That delivered a 9,760 increase to the net long which rose to 134,782,

Finally, the three US-based wheat contracts delivered three different paths over the week, as fear of Black Sea oversupply, increased ending stocks and drought conditions in parts of the US pulled investors expectations.

Starting with Chicago, investors were again divided and added both long and short positions over the week – although a slight preference for longs ensured that the prevailing net short position was marginally reduced.

Some 4,239 new long contracts were added to take the total to 60,545 lots, while 2,975 new short positions ensured the total shorts remained well ahead as the total topped 163,528.

That left the net short at 102,983 – down just 1,264 on the previous week.

Moves on both Kansas and Minneapolis were relatively light over the week, as investors added longs and closed shorts on Kansas, and closed out both long and short positions in Minneapolis.

Investors added 827 new long positions to take the Kansas total to 38,168, while 535 short positions were closed out over the week to reduce the total to 27,577 lots, boosting the net long to 10,591.

Finally, Minneapolis investors reduced long positions by 437 to 9,040, and short positions by 230 to 9,002 to leave the balance evenly poised with a net long of just 38.