Market Morsel: What are the speculators doing?

Grain | 16th March 2021 | By Andrew Whitelaw

Market Morsel

Market Morsel: What at the speculators doing?

Where is the ‘smart’ money on grain?

I am a little sarcastic when I use the term smart money for speculators. The speculators in the market are as often wrong as they are right.

The commitment of traders (COT) report is a valuable tool for understanding how different actors in the grain trade view the market. The main category of interest is managed money, which is considered a proxy for speculators.

If management money is long, i.e. have bought contracts, they are bullish on the market, making money if the market continues to rise. Conversely, if they are short, then they are bearish as they will make money on a falling market.

A more detailed explanation is available here. A series of charts below provide some insights into the COT report and, therefore, the speculator’s thoughts.

Chart 1: This shows the seasonality of the view of speculators. This is a combined view of three different wheat contracts (Chicago, Kansas & Minneapolis). The view has been strongly bullish, with speculators having held a long (bought) position for almost half a year. In 2021, it has remained at quite a consistent level.

Chart 2: This shows the commitment of traders reports broken down into each wheat contract from the start of 2019.

Chart 3: This chart* shows a summary position of all agricultural commodities from 2010 to the present. This indicates that, overall, speculators have a very positive view of the agricultural market in general.

The speculator view of the ag markets is favourable at present. It is essential to be aware that this sentiment can change quickly as they ‘take profits’. If this occurs, then we can see very quick corrections.

NB, It is important to understand the COT report is released on a Friday using data as per Tuesday.

*This chart includes wheat, corn, oats, sugar, coffee, cocoa, cotton, soybeans (incl meal and oil), ethanol, cattle, hogs, dairy.


  • Wheat
  • CBOT Wheat