Funds In Near Record Short Position on Corn

Fund Positions

Fund positions have caught the eye of commodity traders like Joe Vaclavik of Standard Grain. During a conversation with Clinton Griffiths on AgDay-TV, Vaclavik says funds are short roughly 260,000 contracts of corn or possibly the biggest ever. 
There's been a lot of talk that there has to be a short covering rally and the funds will have to get out at some point," says Vaclavik. "That may very well be the case."

He says history has shown that when there is a position of this size eventually it will unravel. 

"You do the math on this thing they're short just over a billion bushels of corn or maybe a billion three," says Vaclavik. "The farmer and the commercials have the inventory of six or seven times that {amount}."

Vaclavik says the funds ultimately could offset the entire short without moving the market a significant amount. 

"They could cover that whole short position," says Vaclavik. "It might be a 15 cent rally." 

He says before anything happens there has to be a fundamental reason to spark short covering. 

Watch his entire conversation with Clinton Griffiths in the video.