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☆ Stocks Hit New High for the Year, Reversing the Summer’s Swoon
▼ + stars: | 2023-12-01 | by ( Joe Rennison | ) www.nytimes.com time to read: 1 min

After several twists and turns this year, stock investors are in a celebratory mood. The reversal has come as investors have cheered signs that the Federal Reserve has finished raising interest rates, the primary tool in the central bank’s effort to slow inflation. Those high rates have been a drag on corporate valuations because they raise costs for consumers and companies and give allure to investments outside the stock market. Jerome H. Powell, the Fed chair, appeared to add to investors’ bullish mood on Friday, suggesting that the economy continues to cool as expected. “We’re getting what we wanted to get, we now have the ability to move carefully,” Mr. Powell said at an event.

Persons: Jerome H, Powell, ’, “ We’re, Mr Organizations: Federal Reserve

Money managers’ net short in CBOT wheat futures and options rose to a 23-week high of 108,176 futures and options contracts as of Nov. 21 versus 89,271 a week earlier. That is funds’ most bearish corn stance since June 2020. wheat futures and optionsFunds’ Minneapolis wheat views remain near record-bearish, though they were slight net buyers in the week ended Nov. 21. On Monday, CBOT corn and all U.S. hard and soft wheat futures hit contract lows during trading, including the lowest price for most-active corn since December 2020. Open interest in CBOT soybean meal futures and options surged 4% during the week to another record of 671,039 contracts.

Persons: soyoil, Karen Braun, Matthew Lewis Organizations: U.S . Department of Agriculture, Reuters, Thomson Locations: NAPERVILLE , Illinois, South America, Chicago, Kansas City, Minneapolis, K.C, U.S, Brazil

Managed money net position in CBOT corn futures and optionsAn increase in gross corn shorts was the dominant theme for a third consecutive week, though funds also cut longs in the latest two weeks. Most-active CBOT corn futures had dropped 4.7% in the week ended Aug. 15. Managed money net position in CBOT soybean futures and optionsOpen interest in CBOT corn and soybean futures and options has not fluctuated much in the last couple of months. But open interest in CBOT wheat futures and options has surged 29% over the last seven weeks, directionally seasonal but more than double the recent average rate during the period. Most-active corn futures on Wednesday had hit their lowest levels since Dec. 31, 2020, though soybeans on Friday traded to their highest levels since July 31.

Persons: Daniel Acker, bearishness, ’ bullish, Wheat, Karen Braun, Matthew Lewis Organizations: REUTERS, Rights, Crop, Reuters, Thomson Locations: Tiskilwa , Illinois, U.S, Rights NAPERVILLE , Illinois

Since then, the combined net long hit an all-time high near 840,000 futures and options contracts in April 2022. In the July contracts, soybeans and soymeal fell 5%, corn and soyoil shed around 6% and CBOT wheat plunged 8%. The only period in which funds were more bearish toward CBOT wheat was between July 2016 and January 2018. ADDITIONAL PRESSUREThe downturn continued for corn and wheat futures between Wednesday and Friday, likely increasing bears’ recent momentum in the grains. Most-active CBOT wheat fell nearly 3% over the last three sessions and featured a dip on Friday to the lowest levels since July 2021.

This marked a sharp turnaround after fund managers sold a total of 281 million barrels over the two preceding weeks, the fastest rate of selling for almost six years. Most of the buying came from the closure of previous bearish short positions (-48 million barrels) rather than initiation of new bullish longs (+13 million). Buying was concentrated in NYMEX and ICE WTI (+49 million barrels), U.S. gasoline (+14 million), U.S. diesel (+5 million) and European gas oil (+1 million) with sales of Brent (-9 million). Short positions in NYMEX and ICE WTI were slashed (-51 million barrels) but no new bullish positions were established and in fact long positions were trimmed marginally (-2 million). U.S. GAS POSITIONSFund managers are becoming less bearish about the outlook for U.S. gas prices following the full re-opening of Freeport LNG’s export terminal.

Most-active CBOT corn futures rose 15% in those eight weeks, remaining just under $7 per bushel at their peak. Corn futures settled at $6.76-3/4 per bushel Friday, easing with broader commodities and equities, though they remain at the second highest levels for the date behind 2012. Subpar global crops have supported corn futures, but demand concerns loom. Money managers’ bullish CBOT soybean meal views are easily record high for the date, surging by more than 14,000 contracts through Sept. 20 to 102,168 futures and options contracts. That was associated with a 3.7% jump in futures, and it was funds’ biggest meal buying week since November.

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