Weekly COT Highlights – Week Ended Tuesday, September 1
Incredible buying across corn, soybeans and wheat from both large speculators and index funds. There are no signs yet that these big money players are starting to lose interest, and while they do hold sizable longs, none are near historically large sizes yet. Room to keep buying is the bottom line. Cotton and soybean meal on the other hand, appear set for a sharp sell off.
Main Takeaways this Week
- Corn: New territory for large specs
- Soybeans: Spec Buying Continues.
- Soybean Meal: Second largest week of buying in history
- Cotton: Large spec long unwinding has likely begun.
- Lean Hogs: Specs bounce off record net short, finally buyers
Corn
In keeping with our analogy that specs have had their foot on the gas, this week reminds us of the famous racing quote, “I’m going to keep my foot on the floor until I see a checkered flag or God.” Specs are now in rare territory, net long 265,000 contracts after adding 68,000 this week through aggressive short liquidation and new long position building.
This is their largest net long since 2022, and the only other times this length was exceeded was briefly in 2012, 2016 and 2018. Precipitous price drops occurred on all four occasions. However, as we frequently say and will continue to remind you, this is not a timing tool. Futures could surge to $8 and then collapse.
There are no warning signs in the COT report, though prices trading relatively flat since this report does give us some concern. From a marketing perspective, know that WHEN the market turns south, regardless of what price level the sell off starts from, you can expect a fast and furious sell off. In the near term, noting that many of these longs were established in the last two weeks, there is a heightened risk for position evening and a minor correction this week ahead of the USDA report, which may well determine the longer term spec behavior and corn price movement.
Soybeans
Interestingly, this weeks net buying from large speculators was due almost entirely to new long position building, very little short covering. Specs now hold 211,636 outright longs, surpassed recently only for a three week period in November/December of 2025. Futures sold off roughly $1 down to $10.50 November 26 futures, during that long position unwind before beginning their march higher to today’s price of $13+.
Similarly to corn, large spec length and commercial short positions present the risk of a sharp sell off. Unlike corn, their net position is not nearly as extreme, having held larger net long positions 9 times (at a quick glance) since 2012.
Bottom line, while this shows the market is susceptible to a sharp sell off, there is also significant room for specs to expand their net long exposure and continue pushing prices higher.
Soybean Meal and Oil
A massive week of net buying, +45,022 contracts in a weeks time. This was surpassed only one time, the largest weekly buying on record of +56,871 in March of 2020. In two months large specs have gone from net neutral, to long 120,000 contracts. An incredible move in a short period of time, driving futures higher into new contract highs in the process. Their largest net long in history is 136,029 contracts, a level that they could have bumped against late this past week. Commercials are already at a new record net short.
This is the exact scenario we watch for, the “rubber band” ready to snap and collapse futures along with the speculative unwind. We would advise meal buyers to be patient.
Not as much excitement in the soybean oil complex. Large spec long exposure remains elevated, but they appear to lack conviction in their market outlook for the last several weeks and months. This leans bearish in our view, but not enough so to drive any decision making.
Wheat
Three straight weeks of large spec buying, in both SRW and HRW, puts large specs at their smallest net short position since late 2021. Since 2006, the specs average net position is short ~50,000 contracts in SRW, they currently sit short nearly 20,000 contracts. It’s hard to make heads or tails of this report. If we had to “stand” on a position based on this report alone, we’d probably just turn and walk out of the room. For now, specs are buying and prices are surging. Our guess, emphasis on guess, is that this move will be over in the next 1-3 weeks.
Cotton
Holy moly. Specs are now long over 100k contracts after 5 consecutive weeks of net buying. They’ve exceeded this length only 4 times since 2016, and were last this long back in late 2021. Given that this data is current through Tuesday, and futures collapsed on Wednesday and Thursday, we think this move may be over.
Again, the COT report informs our outlook, not our timing. Because specs were already so long this market, and we were concerned there could be an aggressive unwinding of this position we worked trailing stops in cotton over the last two weeks, entering the market with a short 20% position in December at 90.50 Wednesday night. Next weeks COT release will surely show large spec long liquidation, and we do see continued downside for prices.
Rice
Start below in 2024. Look at the blue line. Then look at the red line. We’ve previously questioned the correlation between large specs and prices for rice, but I think we can put that concern away for a bit. Large specs continue to buy this market and futures continue to rally. They are still adding new longs, still liquidating shorts. Now sitting in “no-man’s land”, their overall exposure doesn’t provide us any indication a change in trend is underway or even approaching. They could of course turn into sellers, but all we know right now is they seem to like buying rice.
Lean Hogs
Is the bottom finally in? After setting a few new record net short positions, specs were finally net buyers in the week ended Tuesday. Given this, and October futures’ near key reversal up on 8/28, we feel confident the bottom is in this market. This is as supportive of a COT setup you can get for a futures market. Expect higher prices ahead.
Cattle Complex
Large speculator selling continue to pressure both the fat and feeder complex.
In the case of live cattle, new short selling have really accelerated, doing more of the heavy lifting than long liquidation over the last 6 weeks. That tells us that specs see a longer term selloff in the cards. If you glance at the red line below to pick a downside target, that gets real scary real quick. However, given the
In the case of feeders, specs were actually net buyers this week coming off of what we would call a historically large net short position.
Both markets have chopped around now for about a week and a half, building what could be a base as the market decides which direction to move next. You could argue both markets are due for a bounce, and that speculative money is well positioned to aid in that. We feel more confident feeders are bottoming, and made small feeder buyer recommendations this week. More weakness if live cattle next week may have us back in the market as hedgers.
