Weekly COT Highlights – Week Ended Tuesday, August 4
Ahead of next week’s highly anticipated USDA reports, traders hit the sell button across the grain complex. Large speculators were net sellers of more than 51,000 corn, soybean, and wheat contracts, while commercial traders stepped in as buyers of 61,889 contracts. Index funds were modest sellers, liquidating 11,454 contracts, but notably were sellers in all three markets, giving the week’s position changes an overall bearish tone.
Main Takeaways this Week
- Corn: Traders Head to the Sidelines
- Soybeans: Bearish Bets Return, but are Limited
- Wheat: Rally Stalls as Specs Add Shorts Again
- Cotton: Weather Concerns Keep Bulls in Control
- Lean Hogs: Extreme Short Position Remains the Story
Corn
Large spec liquidate both long and short positions in the corn market this week. Causing only a minor net position change of -3,105 contracts, slightly trimming their relatively small long position. Commercial traders made a very similar adjustment, with their purchase of 13,222 contracts also driven by the liquidation of both long and short positions. Index funds followed the same path, reducing their long position by 10,033 contracts. Due to the widespread liquidation across the corn market, open interest fell by 1.4%, or 31,964 contracts. Overall, it appears that most traders wanted to reduce their exposure ahead of next week’s Crop Production and WASDE reports, as there was little appetite to add to either long or short positions.
Soybeans
Large speculators added to their short position this week, but other than that, the story was much the same as in corn. Large specs were net sellers of 35,737 contracts, with roughly 10,000 of those representing new short positions. This suggests that some traders are positioning for a potentially bearish report. However, we would have liked to see significantly more new selling than the relatively modest 10,000 new shorts if there was strong conviction behind that outlook, and overall specs still sit heavily short. Every other major trading group was primarily liquidating both gross long and gross short positions. Commercials, for example, sold 5,800 long contracts while buying back 43,000 short contracts. Overall, much like the corn market, there was little evidence of strong conviction in either direction. Instead, the dominant theme was broad-based liquidation across nearly all trader categories as market participants reduced exposure ahead of next week’s key USDA reports.
Soybean Meal and Oil
Large speculators in the soybean meal market reduced their net long position by 14,440 contracts this week, bringing their net long down to 61,823 contracts. Commercial traders bought 14,552 contracts, reducing their net short position to 203,656 contracts, while index funds were minor sellers, trimming 715 contracts from their position. Like the soybean market, soybean meal trading was characterized more by liquidation than by fresh conviction, as the only gross position that was increased was large specs short position.
Large speculators were net sellers of 23,441 contracts this week, trimming their net long position to 45,758 contracts from recent highs. While that may seem like a significant reduction, their net long remains historically large and well above levels seen through much of 2024 and 2025. Commercial traders made the opposite adjustment, buying 27,453 contracts and reducing their net short position to 150,276 contracts. Index funds were also modest sellers, cutting 2,659 contracts from their long position. Overall, despite the recent reduction, speculative traders continue to hold a sizable bullish position, and more long covering is certainly possible..
Wheat
Wheat bulls ran into resistance this week as continued Black Sea issues cool and lower crude oil prices weighed on sentiment. As a result, large speculators were net sellers of 12,355 contracts on the week, increasing their net short position to 35,583 contracts. Despite the strong buying rally seen in recent months, large speculators never quite reached a net-long position, and this week traders ultimately adding more shorts once again. What is interesting is despite this recent buying spree large specs added virtually no contracts to their gross long position throughout the rally.
Cotton
Cotton specs added to their already sizable net-long position this week. While the increase of 3,839 contracts was relatively modest, it suggests traders are not yet ready to liquidate their bullish positions. Much of the buying was likely driven by concerns over cotton crop conditions, as hot and dry weather continues to stress portions of Texas and Oklahoma. Index funds also added to their position during the week. Overall, the continued buying from both large speculators and index funds helped support higher cotton prices, suggesting the recent rally may not be over just yet.
Rice
Once again, it was a quiet week in the rice market from a COT perspective, but prices continue to push higher. Positioning changes across the major trading groups remained relatively minor. Despite the lack of significant activity in the COT data, the upward trend in rice prices remains firmly intact.
Lean Hogs
Lean hog prices recently saw the bounce that this report had been suggesting for several weeks. However, the rally was short-lived, as large spec buying remained subdued and the market was unable to attract enough buying interest to support prices, let alone extend the move higher. That said, large speculators remain historically short this market. As long as that remains the case, the potential for a short-covering rally continues to exist. At the very least, the current positioning suggests another round of short covering could emerge in the near future if market fundamentals turn more supportive.
Cattle Complex
Aggressive large spec selling in the live cattle market continued for the sixth straight week, pushing their net-long position below 40,000 contracts for the first time since September 2024. The steady liquidation of long positions suggests some traders are taking profits and reducing exposure. Feeder cattle speculators, on the other hand, were modest buyers during the week, buying 925 contracts. While the increase was relatively small, it stands in contrast to the continued selling pressure seen in the cattle markets.
