Grain and oilseed speculators have not received bullish news with staying power in at least three months now resulting in a huge buildup of short positions, and fund managers remained unimpressed last week even as a new set of supply and demand numbers hit the market.

In the week ended May 16, speculators extended their combined bearish bet in grain and oilseeds – which includes Chicago-traded corn, hard and soft red winter wheat, soybeans, soybean oil and meal, and Minneapolis-traded spring wheat, according to data from the U.S. Commodity Futures Trading Commission.

Combining the seven commodities produces a net short of 373,706 futures and options contracts, which is more bearish than last week’s 345,395 contracts but well off the all-time low of 464,376 set back on April 25.

The U.S. Department of Agriculture published its first look at the 2017-18 supply and demand numbers on May 10, which initially drew mixed impressions in grains. Global wheat supply looked bearish on the surface while corn appeared bullish, but interference from large stocks in China skewed the totals and overall market attitude remained essentially the same as it was before the report.

Money managers actually dialed back their net short in CBOT corn futures and options, but the move barely registers on the radar as the 203,909-contract position is the largest-ever for this time of year, well ahead of the approximate 127,000 contracts short on the same date in 2015.

In the week prior, the fund corn short hit 208,642 contracts – the shortest money managers had been since March 8, 2016.

Pessimism was the general theme in the wheat market as speculators were either cutting longs or extending shorts in the week ended May 16. Funds extended their Chicago wheat short position to 121,385 futures and options contracts after two weeks on the uptrend, as the previous week’s 107,892 contracts had been the least bearish view in two months.

Funds have been modestly long K.C. and Minneapolis wheat futures and options for three weeks now, but a lot of air was let out of that balloon in the most recent week as fund managers cut their K.C. net long to 2,641 contracts from 13,692 in the week prior.

The Minneapolis cut was much less severe, as funds reduced their bullish spring wheat bets to 3,166 contracts from 4,670 last week.

Weather worries have been prevalent for grains in the days since, as wheat futures closed higher on Friday over excessive moisture in the U.S. Plains and Midwest, while corn futures rose on the same day over the rains and cooler U.S. weather outlooks. But often when price moves are linked with a weather story, just one or two improved forecast model runs can completely reverse the trend.

Since last Wednesday, trade sources indicate that funds have been net buyers of both corn and wheat.

Naptime for Soy Complex

The oilseed market was generally driven by bearish news between May 10 and May 16, as USDA hiked up old-crop global soybean supply and projected U.S. supply will grow between now and the end of 2018.

The new-crop U.S. carryout number was considerably below analyst expectations but it represented an increase over 2016-17. However, traders seem skeptical that such a relatively low soybean supply is even possible amid record U.S. acres and intensely stiff export competition with abundant South American stocks.

Evidence of a likely cut to domestic soybean use came on Monday as the National Oilseed Processors Association said its members crushed 139.134 million bushels in April against an average analyst estimate of 145.739 million. This was the trade’s biggest overestimation of monthly NOPA crush since September 2014, and the third month in a row of bearish crush numbers against expectations.

But specs know how quickly tightness in the soybean market can materialize, which is likely why they extended their modest soybean short only slightly during this time. The new bearish stance tallies 36,523 futures and options contracts compared with 34,335 in the week prior.

Money managers had nearly wiped away their mild bearish bet of just 37 contracts in CBOT soybean meal in the prior week, but they decidedly moved back into bearish territory in the week ended May 16 with a new net short of 11,688 futures and options contracts.

Soybean oil futures have generally been on the uptick since mid-April and as such, funds reduced their net short in the vegoil for the fifth week in a row last week. The new short position sits at 6,008 contracts against 12,851 in the previous week and is the least bearish that specs have been since mid March

Soybean pessimism has grown in the days since and fund managers could be even shorter at the end of this week barring drastic events on Monday or Tuesday. CBOT soybean futures plummeted 3.2 percent last Thursday to their lowest levels in nearly a month off a sharp currency decline in Brazil that likely led to mass farmer selling there and reduced demand for the U.S. product.

Trade sources reported that funds were generally net sellers across the soy complex since last Wednesday, with the heaviest selling in soybeans and the lightest in soybean oil.