(The opinions expressed here are those of the author, a market analyst for Reuters.)

NAPERVILLE, Illinois - Speculators last week staged the largest round of short covering in four months across U.S. grains and oilseeds, though the collective mood remains the most bearish ever for the date.

This is anchored by a massive fund short in Chicago soybeans, resulting from ample global supplies and what had been poor export demand for U.S. beans. But demand for U.S. corn has been decent and investors have cut back on their price pessimism.

December CBOT corn futures jumped more than 4% in the four-day week ended Sept. 3 after hitting a contract low of $3.85 per bushel in the prior week.

That represented the lowest price for most-actively traded corn futures since October 2020.

In the week ended Sept. 3, money managers slashed their net short position in CBOT corn futures and options by about 66,000 contracts to 176,211 contracts, their least bearish stance since May. While short covering was dominant, there was also a significant uptick in gross long positions during the week.

Funds' new net short in corn is only half as large as their all-time record set in July, though it ties with 2016 for the date's largest net short.

But in soybeans, funds' massive net short is still safely a record for the date and twice as large as the previous high set in 2019. That is despite last week's short covering and a recent flurry of U.S. export sales.

Money managers through Sept. 3 cut their net short in CBOT soybean futures and options to a nine-week low of 154,096 contracts, down more than 22,000 on the week. But unlike in corn, there was a slight reduction in gross soybean longs.

CBOT November soybeans rose more than 2% through Sept. 3, continuing to build from their mid-August low of $9.55 per bushel.

Investors went into the U.S. summer growing season already carrying large short positions in corn and soybeans, and their early acceptance of bumper harvests for both crops has cut back on price volatility as they did in the past few years.

The market this week will be watching for the U.S. Department of Agriculture’s monthly supply and demand reports on Thursday. Analysts expect the record U.S. soybean crop to hold, though corn output is seen slightly contracting.

December corn and November soybean futures over the last three sessions both fell fractionally but traded above the $4- and $10-per-bushel marks, respectively.

WHEAT AND SOY PRODUCTS

Money managers covered short positions in CBOT wheat futures and options through Sept. 3, cutting their net short to a 13-week low of 42,624 contracts, down more than 13,000 on the week.

CBOT December wheat hit its lifetime low of $5.20-3/4 per bushel in the prior week but surged nearly 6% through Sept. 3. Futures were unchanged over the subsequent three sessions.

Soybean meal is the only major U.S. grain or oilseed in which funds remain bullish, having held a net long since mid-April. That almost went away in mid-August when futures notched new lows, but speculators have been net buyers in the weeks since.

Money managers through Sept. 3 boosted their net long in CBOT soybean meal by more than fourfold to 23,171 futures and options contracts, evenly split between new longs and exiting shorts.

But short covering, the week’s overall theme, was most prominent in CBOT soybean oil. Money managers slashed their net short by almost 21,000 contracts to 47,527 futures and options contracts, though that remains heavily bearish in a historical context. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Editing by Sam Holmes)