AgricultureThe total net long across the six major grains contract dropped to a three-month low at 430k contracts with the main driver being corn, which despite trading unchanged on the week saw speculators dump 61k contracts, the biggest one-week clear-out of longs since August 2019. The wheat net short extended to a 27-month high at 47k contracts with soybeans and soymeal also suffering setbacks. Going against the trend we saw another small increase in the soybean oil long to 110k contracts, a 21-month high.
In softs, the 7% rally in sugar help drive a record 89k contract jump in the net long to 166k contracts. The Arabica coffee net short jumped by 1/3 and after four weeks of selling it reached a 28-month high at 19k contracts. Cocoa meanwhile flipped back to a net long while the cotton long received a 24% boost.
In forex, flows turned decisively against the dollar, a day before Fed Chair Powell delivered his hawkish comments which only managed to trigger some temporary dollar strength. Before this reporting week, the Greenback had increasingly been losing steam against several of the nine IMM forex futures tracked in this report. The bulk of the net dollar selling had up until recently been mostly against the euro which since late August has seen €19 billion of net buying, reversing the net position from a 48k lots short to a 106k long. This past week buying accelerated with the net long jumping 41% to a 17 month high. Combined with an aggressive 24% reduction in the JPY net short and a 250% jump in the MXN net long, the combined dollar long ended up being reduced by 59% to just $5 billion, the weakest belief in a stronger dollar since August last year.