Records Set, Streaks Snapped
USDA Report Reaction: Corn Yield Cut, Beans Increase, Key Levels to Watch w/ Oliver & Jason
Below is an excerpt from our weekly Seasonal Tendency and Commitment of Traders Chart Pack. To get the FULL Chart Pack, use the link at the bottom of this article!
Soybeans (ZS) — 12.96½, –13¼ cents on the week
Net long 257,258 (100th pct) · +22,338 wk/wk · Longs 293,215 (+22,765) · Shorts 35,957 (+427)
Soybeans are now entirely a long-side market. Of the 22,338-contract change in the net, 22,765 came from new longs — more than the whole move, because the short side actually grew by 427. There was no covering this week, for the simple reason that there is nothing meaningful left to cover. Gross shorts stand at 35,957 against gross longs of 293,215, better than eight longs for every short, and the net of 257,258 clears the May 2012 record of 240,937.
This is the most one-sided book in the complex and the asymmetry this report has flagged has only sharpened. In a liquidation, gross shorts are the natural bid underneath the market, and at 35,957 there is very little of one. The same thin short base that let this advance run without much resistance offers almost nothing on the way back. Escalator up, elevator down.
Below: 20 year look at soybean NET position
Below: 20-year look at soybean LONGS only
Soybean Seasonality
Beans near $12.96 sit above every rolling average on the chart, with the 5-year near $12.10 and the 8-, 10-, and 15-year lines running roughly $10.80 to $11.50. The 2026 line has spent most of the contract window above the longer averages and separated from the 5- year in August. All of the composites decline from here into October, which is the part of the calendar that matters for the next section.
Thursday Afternoon, We Sent a Seasonal Trend Alert
We put out a seasonal trend alert on November soybeans on Thursday afternoon, and it is worth being precise about what it was — because the easy misreading is that we were calling the funds wrong.
We weren't, and that is not the trade. A 257,258-contract net long is not a mistake. It is a position held by participants with real information, and the fundamentals underneath it — routine flash sales to China, a firm oil complex, genuine weather concerns — are still in place.
The alert was about something narrower and more mechanical: what the distribution of outcomes looks like when three separate conditions arrive in the same week. First, positioning at the very top of its recorded range, which means the incremental buyer is hard to find and there is almost no short base to buy a break. Second, a technically extended market — RSI near 74.65, price stretched far above every major moving average, ATR expanded to roughly 23 cents. Third, a calendar window, September 12 to 27, that has been a seasonally weak stretch for November soybeans in 10 of the last 14 years.
None of those is a signal on its own. Overbought markets are overbought because they are strong, crowded markets can stay crowded, and fourteen observations is a small sample that shows a tendency rather than proving one. Together, though, they describe an asymmetry: the market is priced for good news, so the bar for a bullish surprise is high, while the room for a disappointment is wide open. Crowding in an overbought market during a seasonally soft window does not tell you where price is going. It tells you which direction has more room, and how violent that direction could be if it engages. That asymmetry is what makes a counter-trend idea worth high conviction — not a forecast, and not a bet against the funds.
It also dictates how the idea gets expressed. Conviction in an asymmetry is not conviction in a direction, and a short futures position in market that's trading in a 23 cent average daily range. The illustrative structure in the alert was a November put spread, where the maximum risk is the debit paid and it is known before you enter.
November beans closed 35¾ cents lower on Friday. That is the first session of a window that runs to September 27, not a result, and the piece said as much before the fact.
WHAT THIS MEANS
If you have unpriced bushels: This is the most one-sided book in the complex, and a market that has rallied hard into a seasonally soft window is giving you the pricing opportunity. The question is whether you use it. Rallies into crowded positioning are where floors should get established, not where exposure gets added — and a defined-risk structure against unpriced bushels is a budgeted cost, not a bet against your own view.
If you're trading it on paper: Gross shorts at 35,957 are the smallest short base in the grain complex. That is who bids underneath you if this turns, and there is very little of it. The asymmetry cuts both ways depending on which side you are on, which is exactly why the expression matters as much as the idea.
Thursday's alert went out before the move, not after it.
The seasonal back test, fund positioning, and trend comparison tools behind it are available to Blue Line clients — and the brokers who wrote it are the ones who answer the phone. Call 312-278-0500 and ask for the trade desk, or open an account in 10–15 minutes at BlueLineFutures.com.
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