Soft Commodities

Archive for Soft Commodities – Page 9

Live Cattle leads Soft Commodities Speculator bets while Corn & Sugar bets fall

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 10th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Live Cattle & Cotton

The COT soft commodities markets speculator bets were lower this week as three out of the eleven softs markets we cover had higher positioning while the other eight markets had lower speculator contracts.

Leading the gains for the softs markets was Live Cattle (9,505 contracts) with Cotton (1,485 contracts) and Soybean Meal (1,142 contracts) also recording positive weeks.

The markets with the declines in speculator bets this week were Sugar (-40,779 contracts), Corn (-33,737 contracts), Coffee (-13,927 contracts), Lean Hogs (-17,857 contracts), Soybean Oil (-8,591 contracts), Soybeans (-8,311 contracts), Wheat (-7,425 contracts) and Cocoa (-617 contracts) also having lower bets on the week.

Highlighting the COT soft commodities data this week is the continued gain in the Live Cattle speculator positioning. The large speculator bets for Live Cattle gained this week for a third consecutive week and for the sixth time over the past seven weeks. Speculators bets have now pushed the overall net position standing for Live Cattle (currently at +79,994 contracts) to the highest level in the past forty-six weeks, dating back to February 2nd of 2022.

The Live Cattle futures prices have continued to trade in a sustained uptrend with prices closing higher in each of the past seven months. Recently, the Live Cattle futures front month price touched its highest level since 2015 with a high right below the $160 level.

Data Snapshot of Commodity Market Traders | Columns Legend

Jan-10-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,557,092	14	205,236	0	-225,502	100	20,266	33
Gold	481,519	16	150,535	33	-172,478	66	21,943	35
Silver	129,961	7	29,013	46	-42,925	55	13,912	40
Copper	186,383	29	10,227	44	-16,253	54	6,026	60
Palladium	8,352	12	-2,490	11	2,337	85	153	51
Platinum	72,216	43	30,702	50	-34,346	53	3,644	17
Natural Gas	1,070,386	22	-172,503	27	143,506	76	28,997	49
Brent	140,391	4	-26,209	62	22,463	35	3,746	60
Heating Oil	260,845	20	16,769	67	-35,035	34	18,266	62
Soybeans	620,659	10	140,328	55	-104,166	57	-36,162	10
Corn	1,214,817	4	233,795	60	-182,611	46	-51,184	16
Coffee	210,169	19	-14,739	2	11,310	96	3,429	47
Sugar	905,839	39	187,713	58	-232,509	36	44,796	63
Wheat	334,538	20	-39,716	0	43,529	100	-3,813	91

Strength Scores led by Soybean Meal & Live Cattle

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that Soybean Meal (100 percent) and Live Cattle (80 percent) lead the softs markets this week. Corn (60 percent), Sugar (58 percent) and Soybeans (55 percent) come in as the next highest in the weekly strength scores.

On the downside, Wheat (0 percent) and Coffee (2 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength scores are the Cotton (21 percent) and the Lean Hogs (28 percent).

Strength Statistics:
Corn (59.9 percent) vs Corn previous week (64.2 percent)
Sugar (58.5 percent) vs Sugar previous week (72.5 percent)
Coffee (1.7 percent) vs Coffee previous week (17.7 percent)
Soybeans (54.7 percent) vs Soybeans previous week (57.3 percent)
Soybean Oil (45.6 percent) vs Soybean Oil previous week (51.5 percent)
Soybean Meal (100.0 percent) vs Soybean Meal previous week (99.4 percent)
Live Cattle (79.7 percent) vs Live Cattle previous week (67.7 percent)
Lean Hogs (27.7 percent) vs Lean Hogs previous week (49.3 percent)
Cotton (20.9 percent) vs Cotton previous week (19.8 percent)
Cocoa (43.8 percent) vs Cocoa previous week (44.4 percent)
Wheat (0.2 percent) vs Wheat previous week (7.5 percent)

Live Cattle & Soybean Meal top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Live Cattle (33 percent) and Soybean Meal (27 percent) lead the past six weeks trends for soft commodities. Soybeans (17 percent), Cocoa (17 percent) and Sugar (3 percent) are the next highest positive movers in the latest trends data.

Soybean Oil (-29 percent) leads the downside trend scores currently with Lean Hogs (-12 percent), Wheat (-6 percent) and Corn (-5 percent) following next with lower trend scores.

Strength Trend Statistics:
Corn (-4.7 percent) vs Corn previous week (2.4 percent)
Sugar (3.0 percent) vs Sugar previous week (13.9 percent)
Coffee (-0.1 percent) vs Coffee previous week (17.7 percent)
Soybeans (17.0 percent) vs Soybeans previous week (25.1 percent)
Soybean Oil (-28.7 percent) vs Soybean Oil previous week (-19.8 percent)
Soybean Meal (26.8 percent) vs Soybean Meal previous week (26.8 percent)
Live Cattle (32.5 percent) vs Live Cattle previous week (18.8 percent)
Lean Hogs (-11.8 percent) vs Lean Hogs previous week (-0.1 percent)
Cotton (1.0 percent) vs Cotton previous week (-1.0 percent)
Cocoa (17.3 percent) vs Cocoa previous week (12.4 percent)
Wheat (-6.3 percent) vs Wheat previous week (-4.7 percent)

Individual Soft Commodities Markets:

CORN Futures:

The CORN large speculator standing this week resulted in a net position of 233,795 contracts in the data reported through Tuesday. This was a weekly lowering of -33,737 contracts from the previous week which had a total of 267,532 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 59.9 percent. The commercials are Bearish with a score of 45.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 15.7 percent.

CORN Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	27.4	46.2	9.6
– Percent of Open Interest Shorts:	8.2	61.2	13.8
– Net Position:	233,795	-182,611	-51,184
– Gross Longs:	332,822	561,153	116,990
– Gross Shorts:	99,027	743,764	168,174
– Long to Short Ratio:	3.4 to 1	0.8 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	59.9	45.9	15.7
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-4.7	6.9	-8.0

SUGAR Futures:

The SUGAR large speculator standing this week resulted in a net position of 187,713 contracts in the data reported through Tuesday. This was a weekly decline of -40,779 contracts from the previous week which had a total of 228,492 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.5 percent. The commercials are Bearish with a score of 36.5 percent and the small traders (not shown in chart) are Bullish with a score of 63.2 percent.

SUGAR Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.3	44.1	9.9
– Percent of Open Interest Shorts:	9.6	69.8	5.0
– Net Position:	187,713	-232,509	44,796
– Gross Longs:	274,296	399,818	90,034
– Gross Shorts:	86,583	632,327	45,238
– Long to Short Ratio:	3.2 to 1	0.6 to 1	2.0 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	58.5	36.5	63.2
– Strength Index Reading (3 Year Range):	Bullish	Bearish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	3.0	-2.8	1.5

COFFEE Futures:

The COFFEE large speculator standing this week resulted in a net position of -14,739 contracts in the data reported through Tuesday. This was a weekly reduction of -13,927 contracts from the previous week which had a total of -812 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 1.7 percent. The commercials are Bullish-Extreme with a score of 96.2 percent and the small traders (not shown in chart) are Bearish with a score of 47.2 percent.

COFFEE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	23.2	51.8	5.5
– Percent of Open Interest Shorts:	30.2	46.4	3.9
– Net Position:	-14,739	11,310	3,429
– Gross Longs:	48,809	108,900	11,598
– Gross Shorts:	63,548	97,590	8,169
– Long to Short Ratio:	0.8 to 1	1.1 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	1.7	96.2	47.2
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-0.1	-2.6	34.7

SOYBEANS Futures:

The SOYBEANS large speculator standing this week resulted in a net position of 140,328 contracts in the data reported through Tuesday. This was a weekly reduction of -8,311 contracts from the previous week which had a total of 148,639 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 54.7 percent. The commercials are Bullish with a score of 57.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.9 percent.

SOYBEANS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	30.3	48.7	6.9
– Percent of Open Interest Shorts:	7.7	65.5	12.8
– Net Position:	140,328	-104,166	-36,162
– Gross Longs:	187,837	302,217	42,977
– Gross Shorts:	47,509	406,383	79,139
– Long to Short Ratio:	4.0 to 1	0.7 to 1	0.5 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	54.7	57.0	9.9
– Strength Index Reading (3 Year Range):	Bullish	Bullish	Bearish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	17.0	-13.8	-17.8

SOYBEAN OIL Futures:

The SOYBEAN OIL large speculator standing this week resulted in a net position of 62,099 contracts in the data reported through Tuesday. This was a weekly decrease of -8,591 contracts from the previous week which had a total of 70,690 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 45.6 percent. The commercials are Bullish with a score of 55.3 percent and the small traders (not shown in chart) are Bearish with a score of 48.0 percent.

SOYBEAN OIL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	24.5	49.1	8.9
– Percent of Open Interest Shorts:	7.8	68.2	6.4
– Net Position:	62,099	-71,356	9,257
– Gross Longs:	91,252	183,263	33,103
– Gross Shorts:	29,153	254,619	23,846
– Long to Short Ratio:	3.1 to 1	0.7 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	45.6	55.3	48.0
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-28.7	28.6	-14.1

SOYBEAN MEAL Futures:

The SOYBEAN MEAL large speculator standing this week resulted in a net position of 157,710 contracts in the data reported through Tuesday. This was a weekly boost of 1,142 contracts from the previous week which had a total of 156,568 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 100.0 percent. The commercials are Bearish-Extreme with a score of 0.0 percent and the small traders (not shown in chart) are Bullish with a score of 51.4 percent.

SOYBEAN MEAL Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	42.0	31.9	11.9
– Percent of Open Interest Shorts:	3.4	76.0	6.3
– Net Position:	157,710	-180,580	22,870
– Gross Longs:	171,785	130,280	48,473
– Gross Shorts:	14,075	310,860	25,603
– Long to Short Ratio:	12.2 to 1	0.4 to 1	1.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	100.0	0.0	51.4
– Strength Index Reading (3 Year Range):	Bullish-Extreme	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	26.8	-27.4	15.3

LIVE CATTLE Futures:

The LIVE CATTLE large speculator standing this week resulted in a net position of 79,994 contracts in the data reported through Tuesday. This was a weekly advance of 9,505 contracts from the previous week which had a total of 70,489 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 79.7 percent. The commercials are Bearish-Extreme with a score of 13.3 percent and the small traders (not shown in chart) are Bullish with a score of 64.9 percent.

LIVE CATTLE Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	41.0	27.5	10.5
– Percent of Open Interest Shorts:	16.1	50.1	12.7
– Net Position:	79,994	-72,962	-7,032
– Gross Longs:	132,029	88,511	33,907
– Gross Shorts:	52,035	161,473	40,939
– Long to Short Ratio:	2.5 to 1	0.5 to 1	0.8 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	79.7	13.3	64.9
– Strength Index Reading (3 Year Range):	Bullish	Bearish-Extreme	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	32.5	-28.0	-21.6

LEAN HOGS Futures:

The LEAN HOGS large speculator standing this week resulted in a net position of 25,769 contracts in the data reported through Tuesday. This was a weekly fall of -17,857 contracts from the previous week which had a total of 43,626 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 27.7 percent. The commercials are Bullish with a score of 73.8 percent and the small traders (not shown in chart) are Bullish with a score of 72.1 percent.

LEAN HOGS Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	34.3	36.9	10.0
– Percent of Open Interest Shorts:	20.7	47.1	13.3
– Net Position:	25,769	-19,358	-6,411
– Gross Longs:	65,146	70,042	18,949
– Gross Shorts:	39,377	89,400	25,360
– Long to Short Ratio:	1.7 to 1	0.8 to 1	0.7 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	27.7	73.8	72.1
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-11.8	7.6	21.4

COTTON Futures:

The COTTON large speculator standing this week resulted in a net position of 17,944 contracts in the data reported through Tuesday. This was a weekly increase of 1,485 contracts from the previous week which had a total of 16,459 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 20.9 percent. The commercials are Bullish with a score of 79.0 percent and the small traders (not shown in chart) are Bearish with a score of 23.2 percent.

COTTON Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	28.8	49.6	6.7
– Percent of Open Interest Shorts:	19.9	59.5	5.7
– Net Position:	17,944	-19,936	1,992
– Gross Longs:	58,104	99,886	13,474
– Gross Shorts:	40,160	119,822	11,482
– Long to Short Ratio:	1.4 to 1	0.8 to 1	1.2 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	20.9	79.0	23.2
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	1.0	-1.2	2.6

COCOA Futures:

The COCOA large speculator standing this week resulted in a net position of 27,221 contracts in the data reported through Tuesday. This was a weekly decrease of -617 contracts from the previous week which had a total of 27,838 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 43.8 percent. The commercials are Bullish with a score of 56.6 percent and the small traders (not shown in chart) are Bearish with a score of 36.3 percent.

COCOA Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	31.6	44.4	4.6
– Percent of Open Interest Shorts:	22.5	54.9	3.2
– Net Position:	27,221	-31,199	3,978
– Gross Longs:	94,218	132,109	13,616
– Gross Shorts:	66,997	163,308	9,638
– Long to Short Ratio:	1.4 to 1	0.8 to 1	1.4 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	43.8	56.6	36.3
– Strength Index Reading (3 Year Range):	Bearish	Bullish	Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	17.3	-17.7	3.6

WHEAT Futures:

The WHEAT large speculator standing this week resulted in a net position of -39,716 contracts in the data reported through Tuesday. This was a weekly lowering of -7,425 contracts from the previous week which had a total of -32,291 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.2 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 90.6 percent.

WHEAT Futures Statistics	SPECULATORS	COMMERCIALS	SMALL TRADERS
– Percent of Open Interest Longs:	26.0	42.1	10.0
– Percent of Open Interest Shorts:	37.9	29.1	11.2
– Net Position:	-39,716	43,529	-3,813
– Gross Longs:	87,085	140,763	33,599
– Gross Shorts:	126,801	97,234	37,412
– Long to Short Ratio:	0.7 to 1	1.4 to 1	0.9 to 1
NET POSITION TREND:
– Strength Index Score (3 Year Range Pct):	0.2	100.0	90.6
– Strength Index Reading (3 Year Range):	Bearish-Extreme	Bullish-Extreme	Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index:	-6.3	7.6	-0.5

Article By InvestMacro – Receive our weekly COT Newsletter

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting). See CFTC criteria here.

13 Jan

Global economy 2023: why there will still be plenty of pressure on food prices in the year ahead

By John Hammond, University of Reading and Yiorgos Gadanakis, University of Reading

Welcome to this special report on the food industry, the fourth instalment in our series on where the global economy is heading in 2023. It follows recent articles on inflation, energy and the cost of living.

Shortly after Russia invaded Ukraine, the closely watched food price index of the UN Food and Agriculture Organization (FAO) reached its highest recorded level, stoking consumer prices across the world. In the UK, for example, the prices of many everyday items increased way ahead of inflation, with bread and eggs both up 18% in the year to December, and milk up 30%.

Such rises threatened food security, particularly in low and middle-income countries that rely heavily on Ukraine and Russia for grains and plant oils. That included many countries in Africa and Asia, which took 95% of Ukraine’s wheat exports in 2021 (roughly a tenth of the world supply).

Global food price inflation

This prompted much talk in the media about the potential for famine. Yet nearly a year after the invasion, the FAO food price index has returned to pre-invasion levels.

So why has pressure on prices reduced, and what are the prospects for the year ahead?

What happened in practice

You can’t look at food in isolation from COVID. Many people in the energy and food industries were either too ill to work or prevented from doing so because of pandemic restrictions, which squeezed supplies. When the world opened up and demand began to rise, food and energy prices went up too.

This made people particularly vulnerable to events in Ukraine. Once the war began, food-price inflation peaked because the markets were uncertain about whether production and exports would be hit, and how global supply chains would adapt.

Ukraine’s grain exports resumed after a UN deal was brokered in July to create a humanitarian corridor through the Black Sea. It also helped that the wheat harvest was larger than expected, even if large areas around the front line remain unharvested. Much of Ukraine’s corn has not been harvested either, for the additional reason that the drying process is energy intensive and farmers struggled to afford the raised prices. Overall, Ukraine’s grain exports were down in 2022 by about 30% year on year.

Russia is normally an even bigger exporter of wheat than Ukraine, supplying about 15% of world demand. It’s harder to see what has happened to these supplies because the Russians stopped providing data, but certainly Moscow’s policy of only dealing with “friendly” countries will have affected availability for many countries too.

Countries that rely heavily on Ukrainian/Russian grains have been forced to shop elsewhere. For example Yemen and Egypt have imported more grain from India and the EU, paying higher prices than usual.

Several additional pressures on farmers have further squeezed the global food supply. Fertiliser prices have rocketed in the past two years. Russia, an important global supplier, has been stockpiling for domestic use. Elsewhere, heightened energy prices have squeezed output. In the UK, the largest nitrogen-fertiliser facility suspended production during 2022. Average fertiliser prices for UK farmers are now 18% higher than the winter before the Ukraine invasion, and 66% higher than two years ago.

Extreme weather in summer 2022 was another problem, including heatwaves and drought in northern Europe, America and China, flooding in Pakistan and drought in Argentina. Irrigation has become more difficult in areas that depend on it, while in Europe drought conditions have reduced the supply of crops for animal feed and harvest of grass for silage. Meat and vegetable prices have both gone up as a result.

According to the UN’s World Food Programme, the overall effect of inflation, war and extreme weather has been that many people around the world have had their access to food restricted. The number of people facing severe food insecurity is up 20% since the war began.

The outlook

Wholesale gas and oil prices have at least declined from their 2022 highs, which will benefit the entire food supply chain. This is one reason why inflation eased slightly in the autumn in many countries.

Oil and gas prices

This will have taken some of the heat out of the global food price index. Cereals, meats and particularly vegetable oil prices all fell towards the end of the year, though sugar and dairy prices went in the opposite direction. Overall food price inflation remains historically high.

For the year ahead, the area of crops planted in Ukraine is estimated to be 17% down on 2022. Farmers in other countries are planting more wheat and maize to compensate, though the overall supply will still be pressured by higher farming costs and potentially more extreme weather.

Fertiliser prices will probably stay high as supplies remain restricted. Farmers in wealthier countries may keep applying normal quantities to their crops, like on previous periods of raised prices. But in poorer countries they may cut back, threatening yields and quality and exposing smallholder communities to greater food insecurity.

In sum, many staples will likely remain in tight supply in 2023, meaning price pressures continue. Retailers will be forced to either absorb the costs or pass them on to consumers. Governments will have to consider how to both support struggling consumers but also farmers to maximise what they produce.

At the international level, there needs to be an urgent fertiliser supply agreement to minimise disruptions, prioritising access for vulnerable communities in developing countries. Longer term, farming needs to reduce its dependency on fertilisers by developing agricultural practices that optimise the cycling of nutrients.

This includes more efficient use of manures and extracting nutrients from sewage, and using more legume crops in rotations to take advantage of the fact that they enhance nutrients in the soil. There also needs to be more precision farming techniques to target resources within fields to where they will be used most efficiently.

These practices are well adopted in western countries, but other parts of the world lag behind – particularly developing countries. Fertilisers will always be part of the farming system, but we’ll make food production more sustainable if we can get these things right.

This article is part of Global Economy 2023, our series about the challenges facing the world in the year ahead. You might also like our Global Economy Newsletter, which you can subscribe to here.

John Hammond, Professor of Crop Science, University of Reading and Yiorgos Gadanakis, Associate Professor of Agricultural Business Management, University of Reading

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Opinions Soft Commodities

07 Jan

Weekly COT Soft Commodities Speculator bets led by Corn & Soybeans

By InvestMacro

Here are the latest charts and statistics for the Commitment of Traders (COT) reports data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday January 3rd and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.

Weekly Speculator Changes led by Corn & Soybeans

The COT soft commodities markets speculator bets were higher this week as seven out of the eleven softs markets we cover had higher positioning while the other four markets had lower speculator contracts.

Leading the gains for the softs markets was Corn (32,399 contracts) with Soybeans (15,120 contracts), Soybean Meal (9,695 contracts), Wheat (3,998 contracts), Live Cattle (3,288 contracts), Coffee (1,892 contracts) and Soybean Oil (1,376 contracts) also showing positive weeks.

The markets with the declines in speculator bets this week were Sugar (-17,938 contracts), Cocoa (-3,065 contracts), Cotton (-3,250 contracts) and Lean Hogs (-1,087 contracts) also registering lower bets on the week.

Data Snapshot of Commodity Market Traders | Columns Legend

Jan-03-2023	OI	OI-Index	Spec-Net	Spec-Index	Com-Net	COM-Index	Smalls-Net	Smalls-Index
WTI Crude	1,459,936	6	227,607	4	-249,040	97	21,433	35
Gold	449,393	7	141,666	30	-159,974	70	18,308	26
Silver	131,990	9	30,934	48	-44,211	53	13,277	37
Copper	164,594	13	-4,675	33	-163	67	4,838	53
Palladium	8,456	12	-2,542	10	2,422	87	120	49
Platinum	69,687	38	30,503	50	-33,157	54	2,654	4
Natural Gas	1,031,182	15	-169,813	28	142,142	76	27,671	46
Brent	139,687	4	-26,514	61	23,081	36	3,433	56
Heating Oil	252,205	17	16,613	67	-34,031	35	17,418	59
Soybeans	603,609	7	148,639	57	-111,329	55	-37,310	8
Corn	1,221,434	4	267,532	64	-217,117	41	-50,415	16
Coffee	187,767	3	-812	18	-641	83	1,453	20
Sugar	940,021	45	228,492	72	-273,497	25	45,005	63
Wheat	331,577	19	-32,291	7	37,636	94	-5,345	83

Strength Scores led by Soybean Meal & Sugar

COT Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is Extreme-Bullish and below 20 is Extreme-Bearish) showed that Soybean Meal (100 percent) and Sugar (72 percent) lead the softs markets this week. Live Cattle (68 percent), Corn (64 percent) and Soybeans (57 percent) come in as the next highest in the weekly strength scores.

On the downside, Wheat (7 percent), Coffee (18 percent) and Cotton (19.8 percent) come in at the lowest strength levels currently and are in Extreme-Bearish territory (below 20 percent). The next lowest strength score was Cocoa (44 percent).

Strength Statistics:
Corn (64.2 percent) vs Corn previous week (60.1 percent)
Sugar (72.5 percent) vs Sugar previous week (78.7 percent)
Coffee (17.7 percent) vs Coffee previous week (15.5 percent)
Soybeans (57.3 percent) vs Soybeans previous week (52.5 percent)
Soybean Oil (51.5 percent) vs Soybean Oil previous week (50.6 percent)
Soybean Meal (100.0 percent) vs Soybean Meal previous week (95.3 percent)
Live Cattle (67.7 percent) vs Live Cattle previous week (63.6 percent)
Lean Hogs (49.3 percent) vs Lean Hogs previous week (37.4 percent)
Cotton (19.8 percent) vs Cotton previous week (22.3 percent)
Cocoa (44.4 percent) vs Cocoa previous week (47.4 percent)
Wheat (7.5 percent) vs Wheat previous week (2.9 percent)

Soybean Meal & Soybeans top the 6-Week Strength Trends

COT Strength Score Trends (or move index, calculates the 6-week changes in strength scores) showed that Soybean Meal (27 percent) and Soybeans (25 percent) lead the past six weeks trends for soft commodities. Live Cattle (19 percent), Coffee (18 percent) and Sugar (14 percent) are the next highest positive movers in the latest trends data.

Soybean Oil (-20 percent) leads the downside trend scores currently with Wheat (-5 percent) and Cotton (-1 percent) following next with lower trend scores.

Strength Trend Statistics:
Corn (2.4 percent) vs Corn previous week (-2.3 percent)
Sugar (13.9 percent) vs Sugar previous week (31.0 percent)
Coffee (17.7 percent) vs Coffee previous week (13.2 percent)
Soybeans (25.1 percent) vs Soybeans previous week (18.1 percent)
Soybean Oil (-19.8 percent) vs Soybean Oil previous week (-24.7 percent)
Soybean Meal (27.0 percent) vs Soybean Meal previous week (20.5 percent)
Live Cattle (18.8 percent) vs Live Cattle previous week (24.2 percent)
Lean Hogs (-0.1 percent) vs Lean Hogs previous week (-8.5 percent)
Cotton (-1.0 percent) vs Cotton previous week (-0.3 percent)
Cocoa (12.4 percent) vs Cocoa previous week (5.0 percent)
Wheat (-4.7 percent) vs Wheat previous week (-19.4 percent)