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Canada Know-Risk Market Outlook | Funds Continue to Sell Ag Markets

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Grains Team - Chicago
By :  ,  Grains Team - Chicago
Jan 22, 2024
Canada Know-Risk Market Outlook
 
Craig Turner
Office: 312-706-7610
Twitter: @CornWheatSoy
Podcast: Grains & Oilseeds with Craig Turner
Network: LinkedIn
Email: [email protected]
 
CFTC Commitment of Traders | The funds were heavy sellers again of soybeans and corn.  Managed money sold 45K contracts of soybeans and are now 75K contracts short (169K is the record).  Funds also sold another 30K contracts of corn and now short 260K corn. They are only 62K contracts from their record short position and it is only January. It is rare to see the funds so short this early in the year, before a single acre has been planted for corn and soybeans in 2024.  The funds started building a short position early last year too but had to blow out when it did not rain in the US during the spring.
 
 
 
Weather | Argentine and Brazil had some rain this weekend but most of the region is dry through the 6-10 forecasts.  The Plains and Midwest were mostly dry over the weekend but widespread precipitation and warmer weather come back into the US this week.  The Western Prairies are dry over the next week but temperatures are forecast above freezing!
 
Cattle on Feed | Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle on feed as of January 1 at 11.930 million head, or 102.1% of last year. December cattle placements came in at 95.5% of LY. December marketings pegged at 99.1% of LY.  All three numbers were right at expectations.
 
GRAINS & OILSEEDS | Funds are short and we are getting to the point where they could get close to record short before the US and Canada start planting. That puts a lot of risk on the funds if we see planting delays or lower then expected acres.  For now it appears the downside is limited but the path of least resistance could be a slow grind lower (death by 1000 cuts).
One interesting note about the fund position is they are nearly record short Spring Wheat and it is still at $7.00.  It is hard to be bearish MPLS wheat with winter wheat acres lower than expected, declining global exporter stocks, and a near record short positions before spring planting.
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