The latest supply and demand (WASDE) update on September 12 together with concerns about the Ukraine grain deal helped support another week of buying across the grains sector with the combine long rising 10% to 492k lots. Especially the steep drop in soybeans ending stocks forecast by the US Department of Agriculture helped drive strong gains and net buying across the three soy contracts of beans, oil and meal. Corn was bought for a seventh week while wheat traders, despite a 5.3% rally maintained a net short in CBOT following a small reduction in the net short of less than 5%.
Softs were mixed with the sugar long getting a 75% boost to 30.5k while the cocoa net short jumped to a 2 ½-year high at 36.4k lots, this despite having trading sideways for the past three months, most of the time between $2300 and $2400 per tons. Global growth concerns helped trigger a second week of long liquidation in both coffee and cotton.
Speculators increased bullish dollar bets for a fourth week with the aggressive adding of fresh shorts in the yen (-22.5k) and sterling (-17.7k) being partly offset by significant and continued short-covering in the euro (+24.5k). Overall the dollar long against nine IMM currency futures and the Dollar index reached a six-week high at $21.3 billion.
During the last two reporting weeks which included the euro’s unsuccessful attempt to break lower through €0.99, the net short has seen a 75% reduction to a near three-month low at 11.8k on a combination of fresh longs and short positions being reduced.
A widening gap between FOMC and Bank of Japan policies helped weaken the Japanese yen by 1%, the result being a 39% increase in the net yen short to 80.7k lots, a 14-week high.