Interpretation of CBOT positions: U.S. soybeans hit 6.5-week high, dollar weakness boosts CBOT grain futures
U.S. soybean futures hit a 6.5-week high on Friday, boosted by uneven crop weather in top soy producer Brazil and new export demand for U.S. supplies, as well as a plunge in the cent. Corn and wheat futures also received a boost.
The settlement price of January soybean futures SF24 on the Chicago Board of Trade (CBOT) rose 23.5 cents to 1,351.75 cents per bushel, after hitting 1,355 cents, the highest price for the contract since September 18.
CBOT December corn CZ3 closed up 7.25 cents at 477.25 cents a bushel, rebounding after falling to 468 cents, a six-week low. CBOT December wheat WZ3 closed up 7 cents at 572.5 cents a bushel.
Trader estimates show that commodity funds will increase speculative net short positions in corn, soybean meal, soybeans, and wheat this Friday (November 3), and increase speculative net long positions in soybean oil. This week, commodity funds increased their speculative net short positions in corn, soybean meal, and soybeans, and increased their speculative net long positions in soybean oil and wheat.
The data in the table are traders’ estimates and are not final transaction data. Calculation method: The above net position data = open long contracts – open short contracts, that is, if the data is positive, it means “net long position”, if the data is negative, it corresponds to “net short position”, and 0 means open position. Long and open short positions are the same.
All three commodities received a boost after data showed U.S. job growth slowed more than expected in October, underscoring the view that the Federal Reserve may not raise interest rates again. The U.S. cent index hit a six-week low on the news, making U.S. grains and soybeans more attractive on world markets.
Terry Linn, an analyst at Linn & Associates in Chicago, said: “(The weaker cent) helps our export competitiveness … which has always been detrimental to us.”
Soybean prices rose again as the USDA confirmed a private sale of 131,150 tons of U.S. soybeans to unknown destinations.
Overview of the global export markets for grains, oilseeds and edible oils as reported by government and private sources as of Friday (2023/10/03) close:
Meanwhile, traders are monitoring erratic crop weather in Brazil, where soybean planting is underway. “We are seeing increasing concerns about an uneven start to the growing season in Brazil,” Lynn said.
Drought is a problem in parts of the main soybean-producing state of Mato Grosso, while southern regions have been flooded by too much rain. Nonetheless, brokerage StoneX this week raised its forecast for Brazil’s 2023/24 soybean production to 165 million tons from the previous forecast of 164.1 million tons.
Argentine farmers received 50-60 millimeters of rain on Thursday, easing crop growth, the Rosario Grain Exchange said.
The U.S. harvest is winding down, slowing the pace of hedge-related selling in CBOT corn and soybean futures. Analysts await the U.S. Department of Agriculture’s monthly supply and demand report on Nov. 9, in which the government will release its latest U.S. and global crop estimates.