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NAPERVILLE — Speculators eased their record-breaking bets on Chicago grains and oilseeds last week, even as corn and soybean oil futures hit new highs in the days that followed and other contracts held on to strong year-to-date gains.
Although net selling was the latest theme among commodity funds, it was based primarily on reducing longs rather than new shorts. This suggests that investors remain very uncertain about future price developments while acknowledging the ongoing threats to global supply.
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The most actively traded CBOT corn futures was marginally higher for the week ended April 26, despite soybeans falling 2.6%, wheat down 1.3% and soybean meal down nearly 5%. Soybean oil was the only winner over the period, gaining more than 5% to hit an all-time high.
The loss of exports from Ukraine, particularly corn and sunflower oil, has dominated markets for the past two months, although more supply risks emerged last week.
Top vegetable oil exporter Indonesia halted shipments of palm oil on Wednesday in hopes of driving down domestic prices, although an industry association said on Thursday the ban may only be needed for a few weeks.
On Tuesday, the top exporter of canola and canola oil, Canada said its farmers were planting fewer hectares of the oilseed than expected, increasing pressure on vegetable oils. Strong demand for US soybeans has also provided support.
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The pace of US corn growing a week ago was the slowest in nine years, and last week’s cold, wet weather may have limited efforts. Temperatures across much of the Corn Belt are expected to remain cooler than average through mid-May.
April was historically dry for Brazil’s main corn state, Mato Grosso, and rain forecasts remain stingy. This could reduce Brazil’s exportable corn just months after an unusually large amount of soybeans were lost to drought.
US winter wheat a week ago was at its worst since 1996, although some late-week rains and the potential for more moisture through mid-week weighed on Friday wheat futures. Canadian farmers plan more wheat fields than analysts predicted.
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NET SELLER
As of April 26, money managers reduced their net long position in CBOT corn futures and options by more than 18,000 to 360,655 contracts, according to data from the US Commodity Futures Trading Commission.
They also slashed more than 6,000 contracts from their net long position in CBOT soybeans, which fell to 173,477 futures and options contracts on April 26. That was the first time funds sold corn or beans in four weeks.
Money managers’ soybean meal fell to a two-month low of 91,291 futures and options contracts versus 99,542 a week earlier, although their soybean long-term rose nearly 1,600 contracts to 97,683.
Through April 26, money managers were sellers on the overall wheat market, reducing their Minneapolis wheat net long to 18,268 futures and options contracts from an all-time high of 19,867 the week before.
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The funds had their biggest selling week in Kansas City wheat since January after reducing their net long position by more than 4,400 to 45,407 futures and options contracts. That is tied to 2011 for the most optimistic for the date.
Chicago wheat selling was negligible through April 26 as money managers removed just 290 contracts from their net long position, which fell to 14,180 futures and options contracts.
FRIDAY
The last day of trading in April marked some notable milestones in the global agricultural futures markets. The most active CBOT corn hit $8.24-1/2 a bushel, the highest since August 2012. There are only six other sessions the contract has ever traded higher, all in August 2012.
Corn in December hit a contract high of $7.57 a bushel and soybeans in November were within 15 cents of their Feb. 24 high. Chinese corn futures hit all-time highs on Friday.
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CBOT wheat futures hit a three-week low on US rain and settled at $10.55-3/4 a bushel on Friday. However, Minneapolis spring wheat futures contracts for new September crops set a contract high of $11.91-1/4 a bushel on Thursday.
Benchmark Malaysian palm oil futures hit a new all-time high of 7,105 ringgit per tonne on Friday, capping the biggest monthly gains in 13 years. CBOT soybean oil hit another lifetime high at 87.65 cents per pound on Friday.
ICE rapeseed futures hit all-time highs earlier last week and Paris rapeseed hit them the week before. Karen Braun is a market analyst at Reuters. The views expressed above are her own.
(Edit by Matthew Lewis)
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