As a grower, you are naturally ‘net long’. You are going to grow a commodity that will at some point in time be sold; you have a supply (long) of a commodity. Conversely, if you are a consumer of grain, you are generally ‘net short’, you need to buy a commodity.
A speculator can be either long or short. Speculators trade the market based upon their viewpoint. They have no interest in the physical production or consumption of the commodity; they just want to make money from a position.
The commitment of traders report is a valuable piece of data to keep an eye on. It provides an overview of the position of market participants. At its basic, above zero means the market is overall bullish, below zero overall bearish.
In recent weeks, we have seen a reduction in the bullish sentiment in the overall wheat market (Kansas, Minneapolis and Chicago combined). At its recent peak, the net long (or bought) position was above 85k contracts. The most recent data has the net long at 45k contracts.
This means that there are fewer speculators ‘betting’ on a higher price.
If we break down the wheat contracts, we can see that the bulk of the fall has been in the Chicago and Kansas contracts. The Minneapolis contract has largely remained flat. The Minneapolis spring wheat contract is the one most impacted by the Northern US/Canada drought.