Soybean woes see COT swing further into net short; corn, wheat stable

The Commitment of Traders report for the week of December 26 shows managed money is continuing to bank on further falls in the price of soybeans as the number of short positions surged to almost double those of long positions.

At the same time, wheat and corn positions trod familiar territory, although both saw a reduction in the net short positions, according to the data released late on December 29.

Soybean prices have seen support from weather fears affecting the South American crop, but a double whammy of improved precipitation in key regions and the surprise unveiling of a tighter quality stipulation for US soybeans, have combined to weigh on prices.

With that sea change, along with expectations that US acreage will continue to swing towards greater US soybean production, the outlook for beans has deteriorated.

The latest COT report saw long positions decline marginally from 71,988 as of December 19, to 70,423 lots by December 26, but it was the growth in short positions that pushed the net short position to 69,061 lots.

Clocking in at 139,514 contracts, the short positions gained 26,755 lots over the week for soybeans, consolidating the net short position first established at the end of December 19.

For corn and for wheat, both of which also face fundamental pictures of oversupplied markets and fierce overseas competition, the pictures were broadly unchanged.

Corn added some 2,000 lots to the long side, as corn prices reached a level that made it more attractive versus other feeds, while the short side contracted by 13,000 lots to leave the net short 206,624 positions – still a weighty number, but a fall of 15,529 versus the previous week’s data.

Soft red winter wheat saw a similar change, with the overall net short position falling some 7,000 lots to 145,735 lots.

Both long and short positions declined, with those holding short contracts shedding at a faster rate as open interest contracted by 30,000 lots to 622,514.

Short positions were 232,621 lots, down 11,000, while long positions fell by 3,500 lots to 86,886.