Corn is trading lower this morning after an impressive move higher over the past week which confirmed that a temporary bottom is likely in. Funds had been heavily short ahead of the WASDE which puts those positions at risk and could result in further short covering.
The big mover from Friday’s USDA report was the decline in global corn ending stocks by 2.4 mmt. The rest of the report was relatively neutral.
As of March 5th, the funds were sellers of corn by 1,537 contracts which left them with a large net short position of 296,795 contracts. This number has likely gotten smaller since then with the move higher.
Soybeans are trading lower along with corn this morning after gaining nearly 33 cents last week in the May contract. The WASDE report was a mixed bag, but funds were still short covering as prices moved well off their contract lows.
The USDA refused to lower it estimate for Brazilian soybean production much on Friday and only dropped it by 1 mmt to 155 mmt despite many other private analysts expecting a number closer to 149 mmt. US ending stocks were not increased and export sales were not lowered.
As of March 5, funds sold an additional 11,346 contracts of soybeans which increased their net short position to 171,999 contracts. As in corn, this position is now likely much lower thanks to the higher move.
All three wheat classes are trading lower along with the rest of the grain complex this morning, but unlike corn and soybeans, ended the week with a loss of 20 cents in the March Chicago contract. New contract lows were made on Friday.
Wheat continues to struggle with a big lack of export demand, and last week’s cancellation of 130,000 mt of US SRW wheat did not help trader confidence. Friday’s WASDE report increased US ending stocks by 15 mb due to the lack of export sales.
Friday’s CFTC report showed funds as sellers of 9,213 contracts of wheat increasing their net short position to 65,539 contracts.
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