08/12/2024 As Markets Continue to Dial In “Bearish” WASDE Numbers, Odds Improve for a “Neutral” Report at Worst

On the Grains Grains are mostly lower in overnight trade thus far, with new crop corn and soybeans even making new lows. The immediate weather outlook appears mostly benign. Friday’s Commitments of Traders report released after the close showed that through last Tuesday, funds were indeed beginning to lighten up on their huge net short positions in corn, soybeans, and winter wheat (but continuing to add to their net short in spring wheat.) We’re not seeing much impact in futures, because the short-covering by funds is being absorbed by the continued “give-up” selling of old crop by farmers in excess of ongoing commercial demand. That requires merchants to hedge the difference. In the COT report that was most dramatic in corn. Even though funds covered more than 52,000 contracts of their net short position, the merchant hedger segment went from net long more than 27,000 contracts to net short more than 11,000 in a single week, essentially net selling of nearly 39,000 contracts. We’ll get weekly export inspections at 10am this morning but they pale in significance to the August WASDE numbers that come out at 11am. There are multiple “wildcards” up and down the balance sheets on both production…