This year ends with a peek at the latest numbers from the CFTC’s Commitment of Traders (COT) report. The chart below shows the net reported positions of the four different reporting groups. The producer/merchant/processor/user (PMPU) group is the commercial sector of the markets. However, the large speculative funds known as Pools is the sector of most concern. Note that the size of its short in Chicago wheat and corn futures remains record or near-record large. The Pools position in soybeans has shifted from a modest long three or four weeks ago to a small net short position at year-end, and this could be one of the keys to how the soy complex reacts in early 2018.

Weather in Argentina will be one of the key factors in the directi...