How We Traded Wheat Short & CTA Positioning Update

The Commodity Report #195

Mar 03, 2025

How We Traded Wheat Short

Wheat prices saw a small revival over the last month. From the rect bottom the forward futures contract recovered almost 15%. During last week new selling pressure started to effect the market and led prices down again.

Why I’m telling you that? Because it was a picture book example of our strategy framework: Going with the overall market trend and use temporarily buying pressure by speculators to fade the reaction in favor of the overall trend.

Our CoT-data-framework highlighted this recent opportunity for some time now and with no real fundamental soil we knew that a trend reversal probably isn’t in the card just yet.

*note: we’re short wheat since 15.10.24 and added a position on Wednesday (26.02.25)

CTA Positioning Update

CTAs have bought industrial metals in size this month, and are now net long the 4 commodity cohorts according to the latest CTA flow data by UBS research. Going forward the investment bank expects further CTAs' risk reduction in the energy sector - potentially providing further downside potential for futures. Moreover the bank currently sees the following trades in the market:

'Contrarian' trades: bullish Sugar, Soybean Meal, Zinc, Lead and Nickel, bearish Energy, Lean Hogs and Platinum
'Go with momentum' trades: bullish Robusta Coffee, Lme Tin and Lme Copper, bearish Low Sulphur Gasoil

In Other News…

This graphic breaks down the market value of the entire global mining industry, as of Jan. 16, 2025.

This week, look out for the following:

ISM Manufacturing PMI on Monday
ISM Services PMI on Wednesday
Job Market Report on Friday

Research Service

If you’re an institutional investor, check out our research products for commodity-related futures or equities here.

Till next Monday, Lukas

If you have any questions in the meantime, please feel free to contact me via X or Mail.

Disclaimer: All information, views, and opinions provided herein are for informational purposes only and should not be construed or relied upon as investment advice, an offer to sell, or a solicitation for any form of investment. The information contained in this website is the most recent information available to us (except otherwise noted); however, all of the information herein is subject to change without notice. Certain information included in this website is based on data obtained from sources considered to be reliable; however, no representation is made with respect to the accuracy or completeness of such data. All opinions, estimates, and forward-looking statements, including any market forecasts or projections, involved.

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