Skip to main content

Rough Rice(ZRX23)
CBOT

Today's Change
Delayed Last Update

Greed is Good for Funds Short Corn Futures

Pinion Risk Management - Fri Mar 1, 1:23PM CST

The commitment of Traders report from last Friday February 23rd revealed that managed money was short 340,732 contracts of corn.  This was a new record short position for the funds passing the old record of 322,215 contracts set back in late April of 2019.  The following Monday the corn market made new lows and reversed higher falling just short of closing above the previous trading day’s highs.  Monday’s move higher also consisted of a steep decline in open interest, generally meaning that more short positions were exiting then new longs were being added, i.e. short covering from the fund position. 

Funds and traders generally exit winning trades for two reasons, fear of losing profits after a fundamental shift in the marketplace or greed creating a want to book profits and perhaps get back in again at a better price later.  This week of trade would suggest that greed is winning the week. 

May corn Futures on Monday put in a low of $4.09 and rallied $.23 to Thursday’s high of $4.32.  A nice rally in a quick amount of time with little to no fundamental news. Today, Friday March 1st, 2 days after First Notice Day (FND), May futures were down $.07 and back to $4.22 by noon.  For now, it seems that greed is good, and the pigs are still getting fed with no slaughter of hogs in sight. 

However, while the decline in open interest seems mostly due to short covering there was surely an amount of March longs that threw in the towel and exited without rolling to May.  Fewer old longs could make the exit door for the shorts even smaller if/when the time comes new longs decide to enter the market.

Have a comment or question? Please reach out to derrick.hermesch@pinionglobal.com or call at 785-338-9605

Information contained herein is believed to be reliable, but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors. All information, including this specific material, used and distributed by Paragon Investments LLC (PI) shall be construed as a 


On the date of publication, Derrick Hermesch did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

More from The Globe