Hedge Funds Hold Record Short Positions in Agriculture Futures and Yield Curve

Non-commercial hedge fund traders have sold agriculture futures in eight of the past ten weeks, driven by better weather, soft demand, bearish seasonals, and a negative macro mood. As of this weekend, they are the shortest they've been since September 2019, with -679k contracts valued at -$16.3 billion. The weaker dollar supported agricultural futures despite stock markets turning lower on Friday. Funds are particularly short on soybeans, cotton, and have added a record number of bean oil shorts last week. Leveraged funds hold record short positions across the US yield curve, signaling no end to the basis trade. Farmer selling of corn and beans was more active last week. This activity comes ahead of next week's WASDE and CPI reports.