We continue to watch the positions held by the trading funds for the influence they may have on short-term crop prices. Here's an update:
Corn: Speculative funds maintained long positions in the corn market through the first quarter of 2017, with net long holdings peaking in mid-February. They trimmed long holdings during March and by the end of the quarter, actually held a net short position. Meanwhile, commercial traders provided offsetting buying and by the end of March were net long holders of corn. Commercial buying signals corn processors view prices as a value. A significant rally could spark a shift by the funds, which in turn could amplify the move.
Click here for CFTC Commitment of Traders charts for the week ended April 4, 2017.
Soybeans: After maintaining bullish positions since early March last year, large speculative traders greatly reduced those holdings and by the end of the first quarter were just barely net long. That move was matched by a big commercial shift from the short to the long side, as they are now holding a growing net long position. Large speculative traders haven’t held a net short position since late March 2016. A weather rally could be exaggerated as funds rebuild long holdings.
Wheat: Speculative traders were heavily short from last summer through early winter, but were flat in early March. They have since built short holdings, likely in anticipation of seasonal pressure during harvest. The size of the holdings could signal speculative traders have much of the expected decline already factored into prices, which if realized, would provide some price stability once harvest begins.