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Speculative "fund" traders favoring the short side of US grain futures markets


The US government’s Commodity Futures Trading Commission (CFTC) on Monday afternoon reported managed-money corn futures’ net-long position fell about 6,300 futures and options contracts, to 181,600.


Commercials, or end-users, increased their net-short positions to 484,109 futures and options contracts on corn, from 475,536 a week earlier.

In US soybean futures, the managed-money net short position of around 37,000 futures and options contracts was down around 2,900 contracts on the week.


The latest CFTC report showed the managed money in US soft red winter wheat futures had a net-long position of around 37,000 contracts, buying about 5,600 contracts on the week.


Combined, the big speculators must reckon there is more downside price pressure coming for the US grain futures in the near term.


However, if there should be an unexpected bullish development, such as a change in the weather forecast for the US Midwest to significantly hotter and drier conditions, those speculative shorts would be "wrong-footed" and be forced to quickly liquidate their sold positions, likely driving futures prices significantly higher.


Weather conditions in the US Midwest can and do change rapidly in the summertime.

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