Weekly COT Highlights – Week Ended Tuesday, April 7.
Main Takeaways this Week
After 9 consecutive weeks of net buying, large specs have been sellers of the CBW complex as a whole for two straight weeks, and aggressively so this week. They were sellers of 43k corn contracts, 23k contracts of soybeans, and 5k contracts of wheat. Index funds were sellers of corn and wheat, but set a new record long in soybeans.
Caution Warranted: Corn, Soybeans, Soybean Oil and Meal, Wheat, Live Cattle.
Corn
We advised “caution for corn” last week and this week’s price action clearly justified that. One reason for the caution last week was the increase in new shorts, and specs did that again this week. This is now two consecutive weeks of net selling, following a period of 7 straight weeks of net buying. This is not looking good for the corn complex as specs still have a ton of room for more long liquidation and new short position building.
Soybeans
Over the prior 5 weeks large speculator trading had been extremely flat, but not this week as they came in as net sellers of nearly 24,000 contracts. On the flip side, index funds were modest buyers and for the second consecutive week they established a new record net long position size.
This setup is very concerning for soybeans. The second chart below shows a sharp increase in the number of shorts, which is the warning sign we got for corn last week. Throw in their long positions in soybean meal and oil, and the entire complex looks very vulnerable.
Prices have not really turned south yet, so this is a good place to catch up on marketings.
Wheat
Pretty modest activity across the board here this week. Setup remains relatively bearish in our view. Specs have been sellers now 4 of the last 6 weeks, and sit nearly as long as they have been since 2022. These are not extreme positions, but significant speculator selling and futher pressure on prices from here looks somewhat likely. While prices have fallen, there’s a lot of room below, so a good place to catch up on marketings if you are behind.
Cotton
Don’t really feel like digging into the data to confirm this statement, but we’re confident this is the most aggressive large speculator buying spree in history. This marks the 7th consecutive week of net buying, totaling 114,335 contracts of F&O combined, the a combination of aggressive short liquidation and new buying.
Specs have a lot of room to keep buying, and futures have shown no signs of slowing. On the flip side, some technical objectives have been hit and on a long-term nearby chart we’re now challenging the higs from September of 2024. You won’t sell 100% of the crop at the highest prices of the year, so this is a great place to advance marketings, and we have.
Rice
Large specs were net sellers of…..THREE contracts this week. Enough said.
Soybean Meal
Specs came in as net sellers in the week ended Tuesday, but since thing futures have been strong, and surged on Friday. We’d estimate that the longer term trend of buying remains in tact here, but is likely to end soon based on position sizes. We’ve seen profit taking on long positions for two consecutive weeks, and with Friday’s surge we could well see that accelerate next week.
Lean Hogs
Large specs were net buyers this week, with new longs greater than new shorts. We still read this as leaning bearish, and will be watching some technical support levels. When those break we will likely become aggressive hedgers.
Cattle Complex
Sharp buying from specs in live cattle, as they now sit less than 8,000 contracts shy of their 2025 long, which was the largest long position since early 2019. i.e., they are extremely long and this is again an extremely bearish setup.
Be very alert for hedge recommendations next week.
Feeder COT is in no man’s land, not much to report.
