Trade dumps grain shorts ahead of slew of USDA updates: CFTC

3 Apr 2023 | Tim Worledge

Managed money investors dumped short positions and added longs across grain positions in the week to March 28, data from the Commodity Futures Trading Commission showed late Friday, ahead of a slew of USDA updates on stocks and planting.

That compounded support from strong US corn export interest and mounting worries over current US wheat production and overturned short-lived forays into net short for Kansas hard red winter and Minneapolis hard red spring wheat futures.

The mainstay Chicago contract, home to the bulk of wheat’s liquidity, dipped deeper into its net short stance, however, as investors cut both long and short positions over the week.

Starting with Chicago, managed money closed out 4,394 long positions over the week, reducing total longs to 57,274 contracts.

Shorts shed just 1,021 contracts over the week, reducing the total short position to 147,147 lots and meaning that the net short increased by 3,373 to 89,873.

For Kansas, heavy cuts to short positions meant 6,398 contracts were closed out over the week – reducing the total shorts to 35,563 contracts – while the addition of 2,601 new long positions were just enough to overturn the three-week net short.

Total longs moved to 35,800, delivering a net long of just 237 – from a net short of 8,762 in the previous week.

Finally, Minneapolis made the same move but for different reasons, as investors added both long and short positions over the week.

Far more aggressive opening of long positions tipped the balance, 3,330 new longs were added to take the total long position to 11,056 – the first time into five figures in 40 weeks.

With shorts gaining just 286 new contracts over the week, the total short position increased to 10,636 contracts to deliver a slim net long of 420 – up from a 2,624 net short in the previous week.

Corn remained in its net short posture despite a huge reduction in short contracts over the week as investors added 7,497 new long positions amid heavy Chinese buying of US corn.

Alongside that, 21,111 short positions were closed out over the week, taking total longs to 186,529 and total shorts to 199,817.

That delivered a net short of 13,288, but that was a substantial 28,608 reduction on the previous week.

Finally, soybeans moved in the opposite direction as heavy losses across the wider vegetable oil complex, the big Brazilian crop and underwhelming Chinese demand for beans weighed on expectations.

Investors closed out 7,401 long positions over the week, reducing the total to 127,121, but added in 3,863 new short positions, according to the data.

That took total shorts to 27,599 lots and meant the net long fell to 99,522, down 11,264 over the week.