Funds shift attention to wheat as net shorts swell, soy longs grow

The net short for corn dipped to its lowest level in five weeks, while soybeans saw net long positions increase.

For soft red winter wheat, those with short positions on the Chicago Mercantile Exchange jumped to 216,545, up from 202,917, to take net shorts to 122,774 lots, the highest in three weeks. That came hard on the heels of crop progress data that showed an increase in the winter wheat plantings classified as very poor, poor or fair versus the same period of 2016, while those rated as good or excellent decreased, and far outpaced the 7,000 lot net long increase that analysts had been expecting.

Dryness is raising concerns across all the main grains and oilseeds, but for corn the approach of option expiration saw some movement as short positions dropped by 13,002 to 411,705 while long positions held largely unchanged.

That took the net short position to 196,763, the lowest since October 24 when it stood at 174,394 and some 35,000 lots below the net short record of 230,556 seen in November 14 data and broadly in line with analysts’ expectations.

Soy also saw fresh impetus propel net long positions upwards, with long positions increasing modestly by 3,000 lots to 88,683, but the compelling change came on the opposing side. Short positions contracted by 8,000 lots to 57,021 taking net length to 31,662, a rise again over double what analysts’ had anticipated.

That came at an ascendant time for soy, with prices rallying into the Thanksgiving break and as analysts at Rabobank anticipated the planting trend that would take US soy acreage past corn by 2019. That trend supported subsequently by the USDA’s release of data tables for its ten-year agriculture baseline outlook, which also supported a substantial uptick in soy acreage in the decade ahead.