Managed money positions most bearish in 7 months, COT shows

Collective managed money positions in futures for grains and oilseeds have reached their most bearish in seven months, according to data released Friday by the Commodity Futures and Trading Commission’s Commitment of Traders report.

Total net short positions in all three wheat contracts, corn, soybean, soymeal and soyoil fell to 435,949 in the week ending January 9, from 417,833 lots a week earlier, according to the data.

The main driver was a sharp increase in the net short position on corn, which rose 27,296 lots to 216,832 lots, its biggest short position in three weeks and exceeding analysts' expectations by just over 11,000 contracts.

The increase comes as ethanol production, a major outlet for US corn production, fell below 1 million barrels a day for the first time since October, and stocks rose to 22.7 million barrels.

Elsewhere, soybean shorts increased by 7,865 lots 95,708 lots, again surpassing analysts' expectations by some 10,000 lots as the market had expected a net short position of 85,843 lots.

That comes amid expectations that the US will continued to lose market share in selling beans to China due to better quality Brazil beans, as well as expectations that any reduction in Argentinian supply due to poor weather this year will be offset by Brazilian supply increases.

With SRW and HRS wheat net positions largely unchanged, a reduction in net short positions in HRW of 10,098 lots to 19,829 only partly offset the bearish figures for soybean and grains producers and came in almost exactly inline with expectations.

A 2,656 reduction in the net long position of soybean meal to 17,187 lots and a an increase in net long positions to 11,640 lots from 3,371 lots complete the figures.