2/12/2024

Soybeans break records for short positions

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Key points:

  • Traders’ net short positions in soybeans reached all-time highs.
  • Corn reaches one of its most bearish positions in history.
  • Wheat traders’ positions remained the same as in the past 8 weeks.

Last week, traders on the Chicago Mercantile Exchange saw their net short positions in soybeans nearing historical highs. Concurrently, the trading of soybean meal faced a suspension.

In the week concluding on February 6, traders scaled back their net short positions in soybean meal futures and options, reducing them from 22,068 contracts in the prior week to 14,590 contracts.

Soybeans is in a bear market

In the week concluding on February 6, traders marked a historic 12th consecutive week of net selling in soybean futures and options. Prior to this occurrence, the lengthiest continuous selling streak, as per data available since 2006, was 10 weeks observed from February to April 2017.

The net short positions in soybeans rose to 130,300 futures and options contracts last week, compared to the previous week’s 108,247. This increase was primarily driven by the introduction of new gross short positions, although there were also new long positions emerging for the first time in 12 weeks. Notably, this position stands as the fifth most bearish position ever for the funds, trailing behind the period in April and May 2019, despite predictions of a decline in the Brazilian soybean crop.

Corn also shows a decline

As anticipated, the primary corn futures experienced a 2% decline, aligning with the trend observed in soybeans. Traders in the current week expanded their net short positions in corn futures and options, reaching 297,744 contracts, compared to the previous week’s 280,151. The surge was predominantly driven by the introduction of new short positions.

This marks the sixth consecutive week of net sales in corn, establishing the funds’ most bearish position in corn since April 2019. Notably, the record for financial managers’ net sales of corn was set during a 12-week period from December 2014 to March 2015.

Traders’ positions on wheat are stable

For the eighth consecutive week, the patterns among wheat traders continued to mirror previous trends, with their net short positions increasing to 66,738 futures and options contracts from the previous week’s 64,818. Over the course of these eight weeks, the primary futures in wheat have recorded a decline of almost 5%.

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