Funds turned bearish during the past week as they moved to a net short position in all grains and oilseed futures contracts.
The last holdouts were canola, soybean and soybean oil futures, which moved to small net short positions during the week. Managed money funds maintained their bearish positions in corn and wheat.
Funds sold off their canola position by selling a net of 7,762 contracts (153,440 tonnes) during the week. This pushed the net fund position in canola to short 4,101 contracts (82,000 tonnes) and compares to fund position in mid-July of 141,907 contracts net long.
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The fund sell-off picked up after the announcement of Chinese tariffs, but it still took until this past week to accumulate a significant short position.
This is yet another bearish sign for canola as funds add to their short.
Managed money funds also turned bearish on soybean and soybean oil futures. Funds sold a net of 31,589 contracts (158 million bushels) of soybean contracts last week. This brought the net fund position to 29,302 contracts (147 million bu.) net short soybeans.
Soybean oil futures also garnered the attention of fund selling as they established a net short of 898 contracts. During the week, funds were net sellers of 22,286 soybean oil contracts. This is the first time since mid-April that funds are short soybean oil futures.
Funds are maintaining a bearish stance in corn and wheat markets.
They were net sellers of corn 14,624 contracts (73 million bu.) during the week, which pushed the net position to 94,675 contracts net short corn (473 million bu.).
The corn market has seen funds purchase back their net short position from the peak in mid-July. Funds have been short corn markets through the entire calendar year.
Wheat markets continued to see a sell-off with the three U.S. exchanges seeing a change of 11,401 contracts net short. The fund net wheat position is 174,592 contracts net short in all three exchanges. Funds were also net short 26,353 spring wheat contracts (132 million bu.) on Sept. 23.
The fund positions are an indication of the general bearish sentiment in agricultural markets.
The main culprit has been the expectation of record crops in the U.S. corn belt. When combined with Chinese tariffs on Canadian and U.S. grains and oilseeds, this has created a very negative sentiment for futures markets.
