While money managers braced for the worst in the wake of the U.S.-China trade dispute, they weren’t aggressively selling their holdings this week. The exception was corn, which big speculators targeted for liquidation.
Here’s what funds were up to through Tuesday, July 10, when the CFTC collected data for its latest Commitment of Traders.
Side of beef
Big speculators were net sellers of ag futures this week, but the aggregate number masked buying in some contracts. The biggest gainer for the week was cattle. Big speculators boosted their net long position by 19,761 contracts on aggressive short covering.
The fast money crowd focused selling on the corn market this week. Big speculators more than doubled their bearish bet on corn, adding 37,461 contracts to their net short positions. And investors hoping to gain exposure to commodities through index funds liquidated a net 16,590 contracts from their net long position in corn.
Traders hoped a “sell the rumor, buy the fact” move in soybeans might hold after tariffs went into effect July 6. They covered 5,499 contracts of their bearish bet on beans before the USDA report, only to see the market keep tanking.
Big speculators also turned cautious in soybean oil, covering 4,183 contracts of their net short position before prices internationally sunk sharply later in the week.
Big speculators are still net long soybean meal, but they continued to wind down that bullish bet this week, selling another 5,231 contracts.
Big speculators previously liquidated much of their bearish bet on soft red winter wheat, though they’re still net short overall. They added 249 contracts to that position this week, waiting for Thursday’s USDA before covering more.
Big speculators were also cautious in hard red winter wheat, where they still hold a net long position. The added to that bullish bet a little, buying a net 824 contracts this week.
Large traders in spring wheat sold again this week, adding 1,332 contracts to their net short position in Minneapolis, which neared its most extreme level ever.
After buying crude oil aggressive for a couple of weeks, money manager took a break this week to see if the rally had legs. They trimmed 251 contracts from their net long position.