Grain Markets Turn Bearish as Natural Gas Hits Historic Bullish Extreme
Natural Gas has reached a rare bullish extreme in its Commitments of Traders (COT) report, surpassing any previous reading in the past 336 weeks. This positioning backdrop is historically unusual and deserves attention on a medium-term horizon.
The current COT structure supports the possibility that Natural Gas can continue higher, but it should be used as positioning context rather than a precise entry trigger. The market has reached a 337-report bullish COT extreme, which means the current positioning is more stretched on the bullish side than at any point covered by the previous reports.
On the other hand, the grain markets are telling a different story. Wheat shows a bearish weekly shift as Commercial net positioning changed by a larger-than-average amount and produced a bearish COT change signal. Commercials, who had been net long throughout the past year, moved net short in wheat.
Corn is also developing a clear bearish positioning stress, with traders shifting their positions rapidly over the past two months. The soybean complex adds a sector-wide bearish signal, combining soybeans, soybean oil and soybean meal, which are all currently stretched on the bearish side.