Managed money bets on better days as net short positions shrink: CFTC

12 Feb 2018 | Tim Worledge

Managed money in the corn, wheat and soybean futures and options markets has cut its net short position as of the week ending February 6, data from the CFTC’s Commitment of Traders reports showed Friday.

For hard red winter wheat, the net short position finally succumbed to a net long as close to 24,000 lots were shorn from the short position to take the total to 55,988 lots, with longs outnumbering short positions by 15,157 lots.

That came on the back of a major fall in the quality of US wheat following a hard winter, which supercharged futures prices and raised expectations of wheat shortage.

For soft red winter futures, a busier contract in terms of open interest and position sizes, the number of short positions declined by 10,000 lots to 174,743, while the longs increased by around 3,000 lots to take the net short to 83,394 – the tightest since October 17.

Corn again saw the near-record short position further slashed, with the net short position now at 82,924 lots – almost 65% lower than the 226,876 lots it stood at on January 16.

The key driver was the 37,239 lot reduction in short positions and the 10,779 increase in long positions, as outlooks for corn demand and consumption were bolstered by good export and feed demand, expectations of South America’s corn crop suffering in the prolonged dry weather, and a firmer tone across stablemates soybean and wheat.

Soybeans also saw their net short contract to 9,978 – the lowest level since the week ending December 12, according to CFTC data.

Long positions were largely unchanged week-on-week, with a modest 1,000 lot decrease in longs partially redressing a decline in short positions that stretched to almost 13,000 fewer lots.

That took the net short to 9,978 lots, with South American weather again the major contributory factor in raising expectations of firmer prices.