Hedge funds increase the number of wheat and corn contracts in Chicago amid unfavorable weather in the Russian Federation

According to a report from the Commodity Futures Trading Commission (CFTC), during May 8-14, traders in the US closed short positions in wheat and corn and opened long positions, while the number of both types of positions decreased in soybeans. Traders are worried about unfavorable weather, especially in the Russian Federation, where after a dry April, frosts in May damaged part of the crops.

According to the US MSG, heavy rains are delaying corn planting in the country. At the same time, its stocks are expected to grow by 4% in FY 2024/25, while soybean stocks are expected to grow by 30%, as export demand for soybeans is now at its lowest level in 23 years. However, floods in Brazil, which could reduce soybean production by 3 million tons, will improve prospects for soybean exports from the United States.

Soybeans, meal and oil futures fell about 2.5% during the May 8-14 period, but traders increased net positions in soybean meal by 11,000 to 99,210 contracts. Funds added to long positions for the sixth straight week and are now at their highest since December 2023. At the same time, soybean oil short positions as of May 14 decreased by 4,000 to 61,812 contracts.

Soybean oil futures are up more than 4% over the past three sessions as traders unwind long oil spreads. Meal prices fell 1% and soybeans rose 1%, following oil prices.

During the same time, the prices of corn on the SWOT fell by 3% against the backdrop of the delay in sowing in the USA. Rains in the corn belt will continue, which will slow planting.

Wheat prices on SWOT increased by 4.6% during May 8-14, traders bought long positions for the fourth week in a row, reducing the number of short positions from 42,360 to 28,251 contracts. In Kansas City, the number of short wheat positions fell to the lowest level since September 2023. Also, in Minneapolis, traders opened the first net long position in futures and options since early August, after a record three weeks of closing short positions in spring wheat.

All U.S. wheat prices have declined over the past three sessions, with SWOT down 3% after hitting $6.97/bushel, the highest level since July 31, 2023, on Wednesday, while Kansas trades lower than average yields.