Falling Futures: Beans Meet a Bitter End of the Week
Soybean futures took a nosedive, plummeting by up to 14 ¾ cents as the trading week came to a close. March beans marked a new low, not seen since the autumn of 2020. The options for March also expired, with the $11.40 puts witnessing heavy activity with 4,000 contracts in the money. The world of futures was colored red as soymeal prices closed $3.30 to $3.40 lower, resulting in a weekly loss of $14.10. Soy oil futures were not to be left behind, hitting their lowest point since 2021 with additional losses of 19 to 22 points on Friday.
Market Maneuvers: Speculators Shift Positions
The Commitment of Traders (CoT) report for the week revealed that speculators in the soybean market added 4.7k new short positions compared to 2.6k new long positions, resulting in a net long position of 136.7k contracts as of 2/20. Commercial traders were 36.4k contracts net long after introducing 37k new contracts, maintaining equilibrium on both ends. Managed funds showed an increase in net shorts following new selling activities in soymeal, with a net short position of 30,684 contracts as of 2/20. In addition, speculative traders escalated their short positions in BO, raising the net short to 52.8k contracts.
Bookings and Forecasts: A rollercoaster of Statistics
Weekly soybean bookings hit a new low for the marketing year, totaling just 55,919 MT, falling significantly short of the expected 300k MT for the week of 2/15. Total commitments for the season are currently lagging 20% behind last year’s pace. Meal sales amounted to 202k MT for the week, aligning with estimates and closely mirroring the sales figures from the previous week. On a different note, the Rosario Grain Exchange slashed its Argentine production forecast by 2.5 MMT to 49.5 MMT, placing it below the February USDA prediction of 50 MMT. Meanwhile, the BA Grain Exchange held its estimate stable at 52.5 MMT, showcasing an improvement in crop conditions with 2% of the previously poor/very poor beans now classified as fair.
Closing Numbers: Soybean Futures take a Hit
As the trading day came to an end, the soybean market was a sea of red, with Mar 24 Soybeans closing at $11.33, down by 14 3/4 cents. Nearby Cash stood at $10.81 1/2, experiencing a decline of 14 5/8 cents. May 24 Soybeans wrapped up at $11.41 3/4, down by 10 3/4 cents, while Jul 24 Soybeans closed at $11.51 1/4, marking a decrease of 9 1/2 cents.
On the date of publication, Alan Brugler did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
