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Zawya
5 days ago
- Business
- Zawya
Raging bulls: Funds pad historic longs in CME livestock: Braun
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois - Speculators have held unusually bullish views in U.S. cattle futures since late last year, which was perfect timing as the domestic herd hit a 74-year low at the beginning of 2025. Since then, U.S. beef prices have hit all-time highs, yet consumers have not relinquished their taste for the premium protein, and cattle futures have continued their climb. In the week ended June 10, money managers boosted their net long in CME live cattle futures and options to a 10-week high of 137,836 contracts. That is a record for the date but comparable with 2017 and 2014, both of which featured a steady easing of bullish bets from here. Funds' net long in CME feeder cattle hit a record high as of June 10, and they also extended bullish bets in CME lean hog futures and options for a ninth consecutive week. That brought their hog net long to 118,218 contracts, easily the highest ever for this time of year. Spot live cattle futures are up about 16% so far this year and hogs have jumped by a third. Both inked fresh contract highs within the last week. Over in grains and oilseeds, speculators were net buyers in the week ended June 10 of everything but corn and soybean oil, the latter perhaps regrettable given Friday's events. Money managers were net sellers of CBOT soybean oil futures and options for a fourth consecutive week through June 10, leaving them with a modest net long of 24,768 contracts. However, soyoil futures surged the daily limit on Friday, reaching one-month highs, as the Trump administration proposed higher-than-expected requirements for U.S. biofuel blending in 2026 and 2027. This could boost the demand for domestic soybean oil, particularly as foreign feedstock including used cooking oil from China would be discouraged. Despite the optimism, there was no word yet regarding small refinery exemptions, which could effectively reduce demand. The biofuel news lifted soybeans, which on Friday notched their highest closing price in a month at $10.69-3/4 per bushel. Money managers had increased their near-flat soybean position through June 10 to a net long of 25,639 futures and options contracts. Despite global soybean supplies set to hit record levels this year, speculators have maintained a mildly optimistic stance in recent weeks. U.S. crop prospects are relatively modest and depend on a record yield and a certain acreage, the latter of which could be at risk in favor of corn acres. The big U.S. corn crop expectations have turned funds into bears, as they have been net sellers in 15 of the last 18 weeks. Through June 10, they lifted their net short in CBOT corn futures and options to 164,020 contracts, up about 10,000 on the week. This increases investors' risk of having to abruptly cover corn shorts should U.S. weather turn unfavorable, but current forecasts do not suggest this is very likely in the near-term. Supportive spring weather boosted U.S. winter wheat conditions to the highest early-June levels in six years, and funds have noticed. Last month they established an all-time net short in Kansas City wheat futures and options, well past the previous record. Although they have been net buyers of K.C. wheat in the latest four weeks, their net short remains extremely heavy. Funds also bought Chicago wheat in the latest four weeks, cutting their net short to 94,011 futures and options contracts from 126,895 over that period. CBOT wheat futures surged more than 3% on Friday, motivated by strength in both the soy complex and crude oil. Crude contracts on Friday posted their largest intraday moves since 2022 after Israel conducted strikes on Iran, and both sides were still trading blows as of Sunday. Aside from the fresh Middle East conflict and any further U.S. biofuel news, grain traders must continue to monitor how U.S. weather is shaping up for the rest of June. Grain and oilseed futures have a history of crashing whenever nonthreatening weather is on tap for the U.S. Corn Belt into early July, when crops are setting up for the critical pollination phase. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X. (Writing by Karen Braun; Editing by Matthew Lewis)
Zawya
13-06-2025
- Business
- Zawya
Four must-see charts following USDA's latest data drop: Braun
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois: Another month, another fresh set of numbers. While the U.S. Department of Agriculture's monthly supply and demand report on Thursday did not shake things up too much versus trade expectations, there were some adjustments – and lack thereof - that are certainly worth a closer look. U.S. CORN EXPORTS USDA raised 2024-25 U.S. corn exports on Thursday, perhaps by a bit more than expected. The new 2.65 billion-bushel target would be the second-best on record. But there is an argument for an even higher number. As of June 5, total U.S. corn sales for export in 2024-25 covered 98% of USDA's forecast, which is about as good as it gets. In the previous 18 years, there were eight instances where sales coverage by this date exceeded 95%. In seven of those eight years, final exports were higher than what USDA had estimated in June. The record volume year of 2020-21 is the one outlier, which could raise concerns about additional increases for 2024-25 given how strong the expectations already are. But there is no evidence that this is necessarily a limiting factor. U.S. WHEAT EXPORTS Right before the 2025-26 U.S. wheat marketing year began on June 1, cumulative pre-season export sales had reached a 12-year high. But as of June 5, the 5.9 million-metric-ton total was only an eight-year high for the date. The shift can be explained. Large, unshipped balances at the end of a marketing year sometimes get rolled over to the new one. Still, the 2025-26 progress is impressive. Total sales now cover 26.3% of USDA's freshly increased, full-year export forecast of 22.45 million tons. That portion is a 12-year high and compares with a five-year average of 21.9% by this same date. Although U.S. wheat exports are expected to hit five-year highs, they may still lack on the world stage. The United States is seen accounting for 10.5% of global shipments in 2025-26, down slightly from the prior year and the third-lowest share in decades. USDA VERSUS CONAB Forecast discrepancies between USDA and its Brazilian counterpart Conab have been in focus over the past year or so, but those deviations took a new turn this month. Conab on Thursday increased its 2024-25 Brazilian soy crop estimate to 169.6 million tons from 168.3 million last month. For an unprecedented 13th consecutive month, USDA left its projection unchanged at 169 million. That marks the first time in eight years that USDA's estimate is lighter than Conab's. However, the two numbers are very close, as are the two agencies' figures for Brazil's 2024-25 soybean ending stocks. This means they may have found synchrony on both supply and demand assumptions, though the agencies may have to revisit pending the outcome of Brazil's in-progress soy export program. On the corn side, Conab increased its 2024-25 Brazilian harvest outlook while USDA's was unchanged. USDA's projection sits 1.4% above Conab's, the smallest discrepancy in four years. WORLD CORN STOCKS Global corn stocks and stocks-to-use are still expected to hit respective 12- and 13-year lows in 2025-26, though the numbers tightened further on Thursday with a reduction in old-crop stocks. The 2025-26 stocks-to-use figure of 18.7% is down from 19.7% a year earlier and 22.3% in 2023-24. That is above the 12% to 15% levels seen between 2010 and 2013, a period of high grain prices and ongoing supply struggles. But it still suggests there is not a ton of play in the global corn numbers, and major exporters' crops must meet expectations. That includes a record U.S. crop target, and things are off to a decent start. That recently sent new-crop CBOT corn futures to six-month lows, and prices are at five-year lows for the date. A big test is coming on June 30. Not only will USDA reveal more information about current U.S. stockpiles, but volume expectations for the 2025-26 U.S. corn harvest could be completely reset if the acreage survey offers a surprise. Such a surprise would not at all be … surprising. Corn acreage has landed outside the range of trade predictions in four of the past six Junes, meaning this month could conclude with some volatile trade. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.
Zawya
09-06-2025
- Business
- Zawya
Funds' bearish sentiment on US grains and oilseeds hits nine-month high: Braun
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois - Speculators dug deeper into bear territory last week across U.S. grain and oilseed futures, and with this time of year known to feature plenty of uncertainties, investors must keep their eyes glued on upcoming weather forecasts for the U.S. Corn Belt. In the week ended June 3, money managers' combined net short position across U.S. grain and oilseed futures and options surpassed 400,000 contracts, up more than 90,000 on the week. That marks their most bearish collective position since early September and their most bearish open to June in eight years. Just four months ago, the combined net long topped out at 300,000 contracts. Last week's move was driven by heavier selling in corn, soybeans and soybean oil. Money managers maintained bullish CBOT soybean oil bets through the week ended June 3, but they slashed their net long futures and options contracts by 22,000 to 31,990 contracts due to negative sentiment on the U.S. biofuels front. Money managers nearly erased bullish bets in CBOT soybean futures and options, reducing their net long to 8,601 contracts from 36,697 a week earlier. Funds' bearish soymeal position remained near-record large as prices have traded sideways over the last several weeks, and they also maintained sizable net shorts across the wheat flavors. CORN FOCUS Last week's net selling in corn was primarily driven by a large wave of new gross short positions, a trend that has been present in six of the last seven weeks. As of June 3, money managers' net short in CBOT corn futures and options hit a nine-month high of 154,043 contracts, up from 100,760 a week earlier. Recent heavy speculative selling in corn comes against the backdrop of a wildly strong U.S. export program and similarly robust U.S. ethanol grind. These factors have pared 2024-25 U.S. corn ending stock predictions significantly over the last year. However, the futures market does not seem to be reflecting a terribly tight situation. Late last week, CBOT July corn opened up a discount to December corn, not suggestive of imminent concern over supplies. Funds' building bearishness in corn as well as the newly established market carry could be hinting at the expectation that last year's U.S. corn crop was larger than the U.S. Department of Agriculture stated. The agency's June 30 stocks report could potentially validate this notion. But in the meantime, traders will need to be watching the U.S. weather forecasts, which as of Friday suggested a potential dry spell for the western Corn Belt over the next two weeks. Heat risks were relatively low, though corn and soybean crop conditions are sitting at just average levels. In the week ahead, the market will be anticipating USDA's monthly supply and demand report on Thursday, and traders expect a further contraction in old-crop U.S. corn supply. All eyes will turn toward London on Monday, where top U.S. and Chinese officials will hold talks aimed at resolving trade disputes. Pending the outcome, this could have markets starting off the week with a bang. But whether that trajectory is higher or lower is anyone's guess. Karen Braun is a market analyst for Reuters. Views expressed above are her own. (Writing by Karen Braun; Editing by Edwina Gibbs)
Zawya
30-05-2025
- Business
- Zawya
What to make of surprisingly low US crop ratings: Braun
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois - The U.S. corn crop has gotten off to a somewhat disappointing start in what is supposed to be a record producing season. Meanwhile, U.S. spring wheat is experiencing its second-worst start to the growing season in history after this year's plantings dropped to a 55-year low. What might these early figures mean for the growing season overall? How do they compare with past years? And where are the problem spots and near-term prospects for improvement? SHORT OF EXPECTATIONS The U.S. Department of Agriculture on Tuesday afternoon rated 68% of the U.S. corn crop in good-to-excellent (GE) condition in this season's initial rating, marking the lowest starting health since 2019. That was well below analysts' average estimate of 73% GE, though initial condition reports from the Crop Watch producers over the weekend averaged out to a six-year low, at least. A 68% GE is not all that bad. On average over the last three years, the initial U.S. corn score comes in around 72%. Additionally, the slower start may be explainable. The unanimous feedback from the Crop Watch producers was that it has been too cold, cloudy and rainy, and the plants are not growing quickly. Hail, frosts, wind, rain and even a period of excessive heat recently stressed crops in the western Corn Belt, which was reported by Crop Watchers. This showed up in USDA's data on Tuesday. Averaging initial corn conditions by state over the past three years, North Dakota and Ohio stand out. North Dakota at 48% GE is 24 percentage points below average and Ohio's 41% is 37 points below. Conditions in top producer Iowa are 4 percentage points ahead of normal, Illinois is 7 points behind, South Dakota is down 16 points, Nebraska is down 2 points and Minnesota is 4 points behind. OK OUTLOOK? Three factors may help ease any concerns about current U.S. corn crop health. The corn crop is only two-thirds emerged nationally, a lower-than-usual portion to coincide with the first condition scores. This allows for some play in the near-term figures, as newly emerged crops, if in good shape, could boost the overall score next week. Although not necessarily unusual, less than 40% of corn in Ohio and North Dakota was emerged as of Sunday, possibly allowing for future improvement. All Crop Watch producers last weekend expressed the dire need for heat and sun, and that should start arriving over the weekend after this week finishes out on the cooler, cloudy side. The pattern might not necessarily be long-lasting, but even a short, warm, sunny spell in early June can go a long way for early crop growth. U.S. corn was initially rated 65% GE in 2017, and calculations at the time pointed to near or below-trend yield probabilities. This caused the market to misjudge the crop potential all year, and the 2017 corn crop achieved a new record yield. The 2017 crop was rated 60% GE by the end of July, not too huge of a change from the initial. So even though 60% would not be considered stellar by itself, the lack of large rating swings that season may have been telling. WHEAT WOES U.S. spring wheat was rated 45% GE as of Sunday, tied with 2021 as the second-lowest initial rating over the 40-year history. The worst was 34% in 1988. Those two years are bad company, as they featured well-below-trend U.S. spring wheat yields as both seasons included drought. The 2025 crop is already starting in the hole as U.S. farmers intend to plant their smallest spring wheat area since 1970. Some 60% of U.S. spring wheat was emerged by Sunday, comparable to 66% on the same date in 2021. North Dakota, which produces half of the U.S. spring wheat crop, must remain on watch as only 37% of the wheat there is GE and 26% is considered poor or very poor. Recent cold and wet weather has battered the young wheat crop, so the coming flip to better weather may offer improvement opportunities. Market analysts had expected the initial spring wheat conditions to come in at 71% GE, so the result was much more shocking than the one for corn. But the lighter figures for both certainly set up the potential for market scares this summer if an unfavorable weather pattern were to set in. Karen Braun is a market analyst for Reuters. Views expressed above are her own. (Writing by Karen Braun Editing by Matthew Lewis)
Zawya
19-05-2025
- Business
- Zawya
Funds get short CBOT corn but ink record bullish oilshare bets: Braun
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois - Speculators sold significantly more Chicago corn than expected last week, establishing their first bearish stance on the yellow grain in nearly seven months. However, funds' massive CBOT soybean meal short combined with their building bullish soybean oil bets left them with record oil optimism in relation to meal. CBOT July corn hit seven-month lows in the week ended May 13, easing nearly 3%. U.S. corn planting has been moving along without a hitch, and funds were expected to have gotten short heading into last Monday's reports from the U.S. Department of Agriculture. They certainly emerged as bears from that data release, which placed 2025-26 U.S. corn supplies well below analysts' expectations but up 27% from the current year. In the week ended May 13, money managers were net sellers of nearly 99,000 CBOT corn futures and options contracts, resulting in a net short of 84,976 contracts. That is their first net short in corn and their most bearish view since October. That is a stark contrast from early February, when funds' net long hit a three-year high of 364,217 contracts. They have been net sellers of corn in 12 of the 14 weeks since, largely driven by U.S. trade policy jitters and the anticipation of a record U.S. corn crop. July corn futures remained steady at the end of last week, but December futures on Friday sank to five-month lows. Money managers extended their net short in CBOT wheat futures and options through May 13 to 126,895 contracts, nearly their most bearish wheat view in more than seven years. Most-active CBOT wheat futures on May 13 sank to their lowest levels since August 2020 as USDA pegged global wheat supplies to rise slightly into 2026 from the current levels. July wheat futures rose 1.5% over the last three sessions as U.S. wheat exporters made some of their largest sales in years, but traders have also noted improving U.S. crop conditions. SOYBEANS AND PRODUCTS In the week ended May 13, money managers extended their net long in CBOT soybean oil futures and options to a six-month high of 67,432 contracts, up nearly 11,000 on the week. Most-active futures rose 6.5% on the week before reaching 18-month highs on Wednesday, driven by U.S. lawmakers' proposed extension of the clean fuel tax credit (45Z) through 2031. However, futures plunged 6.5% over the last two sessions including a limit-down move on Thursday, when rumors circulated that next year's target for U.S. renewable diesel volumes could be much lower than previously expected. In the background, trade disparities in soybean product trade had been on the rise. CBOT oilshare, which measures soyoil's share of value in the soy products, recently hit the highest levels since late 2022. But speculators' bullishness in the oilshare last week reached an all-time high, possibly suggesting one or both of their product positions have been too extreme. In the week ended May 13, money managers slightly trimmed their 100,000-contract-plus net short in CBOT soybean meal futures and options from the previous week's record high. But that was offset by funds' net buying in soyoil, boosting their net long in the CBOT oilshare to 170,177 contracts. The pre-2025 high was 144,631. CBOT soybeans both in the week ended May 13 and in the following sessions moved directionally with soybean oil. Money managers extended their net long in CBOT soybean futures and options to a three-month high of 38,407 contracts through May 13, up more than 16,000 on the week. Traders in the week ahead will be watching U.S. weather forecasts for the early establishment of the corn and soybean crops. But they also must keep a close eye on any potential developments out of Washington, especially pertaining to trade policy or biofuel mandates, both of which have recently jolted futures markets. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
