- Today has seen CBOT markets close higher although we are led to believe that fund activity has been significant. Open interest in corn has grown significantly (77,573 contracts) in the last three trading days and one theory is that managed money is piling into a large net short position ahead of the key USDA stocks and seedings report scheduled for release at the end of the month. Whether the funds want to hold this position into and through the report is unknown, but it should be borne in mind that the month and quarter ends on 31st March (post report) and funds are reported to be faring poorly so far this year.
- Soybean open interest is also rising (up nearly 50,000 contracts in the past week) and it seems that trend-following funds are growing a sizeable net short ahead of the report.
- Funds are also holding close to a record large wheat net short and with dry conditions across the central US Plains, parts of Europe and Russia becoming more of a debating topic this is becoming more important. However, it must be remembered that rainfall in April and May makes or breaks N Hemisphere crops, and this year will be no different.
- On a different tack, Reuters reports that Brazil has shipped ethanol to the US as the weak Real kicks into effect as has “balloning supplies” in Brazil. The shipment is reported as 30,000 mt destined for Florida.
- According to the US Farm Futures magazine, as reported by Reuters, US farmers are to plant 87.25 million acres of soybeans this season, a record, whilst corn acres will be eroded to 88.34 million. The figures are a result of their survey data. The soybean acreage, if realised, will be 4.2% up from last years 83.7 million acres, whilst corn is 2.5% down on the 90.6 million planted in 2014. Whilst interesting, the official data will be more relevant to markets and price direction, and we have to wait until 31st March.