The latest COT report show that markets are positioning for further price rises in grains. Hedge funds, commercial traders, and individual investors are all anticipating further price gains heading into the US elections. Corn has been ripping higher and trading at 14months+ highs. Soybeans have kept rising higher encouraged by a potential Biden win. Corn hit an 11% gain in Q3 and recent corn prices has seen corn trading at a 14 month high. Wheat has been booming too and is at its best levels in five years. When you view the recent Commitment of traders reports it shows that non-commercial participants are anticipating even further rise in prices. Look at the report for Soybeans below:

The future prices tend to positively correlate with the positions of non-commercial traders. The non-commercial traders can set trends and each week over September and into October the net long contracts have been rising in soybean futures (see chart above).

So, in this environment expect buyers on dips across the gains.

In Wheat:

In Corn:

And finally in Soy beans too:

So, keep an eye on technical resistance areas as well. Watch out for breaks higher on breaches of those levels as well as buyers on the dips. An obvious caution is necessary ahead of the US elections as a Democrat sweep is increasingly being priced in. This could result in a ‘buy the rumour, sell the fact type response’ being felt in the grain futures markets on a Biden victory, so be aware of the potential for heavy volatility on the election result.