Peak Trading Research๐จ Agriculture exodus. ๐๐ฝ๐พ๐ฑ
Crude Oil fell. Weather improved. June seasonals turned.
Funds headed for the exits.
One of the fastest hedge fund liquidations in years is underway.
Non-fundamentals matter. ๐โ
๐จ Hedge fund liquidation is accelerating. ๐๐พ๐ฑ๐ฝ
Managed Money traders dumped -221k agriculture contracts (-$7.5B) in the latest COT report ... with Chicago Wheat posting *record* outflows.
Funds have gone from buying Ags in March and April to aggressively selling in June.
Seasonals, macro, and weather are all pointing in the same direction. ๐
๐พ The ag bull story is starting to crack.
Funds sold aggressively during the latest COT week ... and dumped even more agriculture futures through Friday's close.
The pillars of the rally are weakening:
๐ Fading China trade optimism
๐ Faster U.S. planting
๐ต U.S. dollar now trending higher
๐ Bullish momentum fading
Profit-taking ... or the start of something bigger?
๐จ Funds hit the sell button last week. COT report:
๐ฝ Corn: -$1.0B
๐ Cattle: -$1.1B
๐ผ Canola: -$315mm
๐ซ Cocoa: -$519mm
Hedge funds were $36B+ net long 10 days ago ... a four-year high. Today: closer to ~$25B after heavy long liquidation and aggressive new shorts.
Still historically large. No longer extreme. ๐
Is the top in?
๐ฝ๐ซ๐ฌ BIG inflows into Corn, Soybeans, and Sugar last COT week.
Largest agriculture fund flows:
๐ฝ Corn: +$1.9B
๐ซ Soybeans: +$2.2B
๐ฌ Sugar No. 11: +$1.2B
Meanwhile:
๐ข๏ธ Brent saw massive liquidation
๐ Funds kept selling Wheat๐พ
๐ Trump-Xi + WASDE ahead
Funds are still aggressively leaning into the ag trade - longest since March 2022.
๐จ Hedge funds are now +$36.5B net long agriculture futures.
Thatโs the largest bullish ag bet in FOUR YEARS, within striking distance of the *record* +$40.1B peak from February 2022. ๐
Big catalysts ahead: ๐ฑ Trump-Xi summit, ๐ May WASDE + first new crop balance sheets, and ๐ข๏ธ Continued U.S.-Iran / Crude Oil volatility.
Crowded trades can reverse fast.
Is this the top?
๐ Risk-On, Dollar Down, Ags Up! ๐ฝ
Record-high stock markets and a weak U.S. dollar - down for seven consecutive sessions - have boosted #agriculture markets this week as investors hope for a sustained U.S.-Iran ceasefire.
Commodity prices climbed again in November. ๐ฑ๐
The Bloomberg Commodity Index - a diversified basket of agriculture, energy, and metals futures contracts - rose +2.9% ... following October's strong +4.9% gain.
