Speculators trading Chicago-traded soybeans have been on an unprecedented selling streak since mid-November, culminating in a historic net short position last week as global soybean stockpiles continue to expand. In the week ending March 5, money managers further increased their net short position in CBOT soybean futures and options to a record 171,999 contracts, surpassing the prior all-time net short set in May 2019. This persistent selling trend led to funds’ 16th consecutive week as net sellers of CBOT soybeans, marking a significant departure from the previous record streak of 10 weeks.
Despite marginal gains in most-active soybean futures during the week, which included reaching fresh 3-plus-year lows, speculators remained steadfast in their bearish sentiment towards soybeans. The intensity of the current sell-off is reminiscent of the period surrounding the U.S.-China trade war in May and June 2018, although the current trend has extended over a more prolonged period.
In addition to soybean futures, funds have also maintained a bearish outlook on CBOT soybean meal and soybean oil, with net short positions expanding to levels unseen in recent years. The increased pessimism surrounding the soy complex is reflected in funds’ most bearish views on meal and oil since June 2020 and May 2019, respectively.
While soy complex prices experienced some fluctuations in the week ending March 5, with meal futures climbing and soybean oil declining, funds’ negative sentiment remains near all-time highs. The prevailing concerns over expanding global soybean stocks and uncertain Chinese demand have exerted downward pressure on soy prices for an extended period. Despite challenges faced by top exporter Brazil due to weather conditions, the country’s soy crop is anticipated to be sizeable, with harvest progress impacting market dynamics.
In contrast to soybeans, CBOT corn futures saw marginal gains during the week, although money managers remained slight net sellers of corn contracts. CBOT wheat experienced significant losses, with money managers expanding their net short positions amidst challenging market conditions. While corn and soy products may have found a temporary bottom last month, wheat prices continue to face downward pressure.
The recent price actions across various commodities come against the backdrop of a monthly USDA report, with market analysts closely monitoring developments and reacting to the latest data releases shaping trading dynamics in the agricultural markets.