Wheat-SRW (Chicago) COT Report for the week ending December 23, 2025

Executive summary

This report covers the week ending December 23, 2025. Positioning in the SRW Wheat market is characterized by a significant and growing net short position held by Managed Money, which now stands at -72,079 contracts. This bearish speculative stance is contrasted by bullish flows from Producer/Merchants and Swap Dealers, who both increased their net long exposure. The market saw a substantial surge in open interest, increasing by over 42,000 contracts, indicating a significant influx of new positions and conviction. The provided price data is very limited but shows prices were stable to slightly higher during the end of the reporting period, suggesting speculators were adding to short positions into minor strength. The large speculative short base remains a key risk for a potential short-covering rally.

Positioning

• Managed Money (Funds): Funds hold a deeply bearish net short position of -72,079 contracts (98,571 long vs. 170,650 short). Their short positions outweigh their longs by a ratio of nearly 1.7 to 1.
• Producer/Merchant (Commercials): Commercial participants are much closer to balanced, holding a small net short position of -9,142 contracts (71,320 long vs. 80,462 short). This is a typical hedging posture, though relatively flat for this category.
• Swap Dealers: This category holds a significant net long position of +61,523 contracts (70,592 long vs. 9,069 short), largely acting as a counterparty to the Managed Money shorts.
• Historical Context: Note that no prior weeks' data was provided, so it is not possible to compare these net positions to their historical ranges (e.g., 52-week highs or lows).

Flows and week-over-week changes

This was an active week with significant position adjustments across all major categories. * Managed Money: Funds aggressively added to bearish bets. They increased short positions by a substantial +28,283 contracts while adding a more modest +5,239 contracts to the long side. This resulted in a significant increase in their net short position. * Producer/Merchant: Commercials were net buyers during the week. They added +11,793 long contracts while adding only +1,875 short contracts, signaling buying interest at current price levels. * Swap Dealers: Swaps increased their net long exposure, adding +7,191 long contracts and simultaneously cutting their short positions by -2,166 contracts.

Commercials vs speculators

The classic divergence between hedgers and speculators is clearly visible. * Speculators (Managed Money): The speculative community is positioned with strong conviction for a price decline. The heavy addition of 28,283 short contracts this week underscores this bearish sentiment. Managed Money accounts for 36.7% of the total short open interest. * Commercials (Producer/Merchant): The physical trade participants used the week to add to long hedges, likely viewing current prices as a value zone for procurement or locking in input costs. Their net buying of over 9,900 contracts stands in direct opposition to the speculative flow.

Open interest and participation

• Open Interest: Total open interest saw a massive surge, increasing by 42,062 contracts to a new total of 465,597. This large increase alongside growing speculative short positions suggests new bearish bets entered the market with conviction, rather than just a shuffling of existing positions.
• Participation & Concentration: The market involves a broad set of participants, with a total of 369 traders. Concentration is not extreme; the four largest traders by net position hold 10.3% of the short side and 10.0% of the long side. This suggests risk is not overly concentrated in the hands of a few major players.

Price context

The provided price series is extremely limited, covering only the final two days of the CFTC reporting period. * On Monday, December 22, the front-month contract closed at 515.25. * On Tuesday, December 23 (the "as-of" date), the contract closed slightly higher at 517.75. The substantial increase in Managed Money short positions occurred during a period where prices were stable-to-firm. This indicates that speculators were either fading the minor rally or initiating new shorts in anticipation of a price reversal. Conversely, Commercial buying occurred into this same minor price strength.

Risks and watchpoints

• Short Squeeze Risk: The primary risk is a short squeeze. The large and expanding Managed Money net short position of -72,079 contracts makes the market vulnerable to a sharp rally if an unexpected bullish catalyst emerges, forcing a disorderly exit from these positions.
• Speculator vs. Commercial Divergence: The growing tension between bearish speculators and buying from Commercials is a key dynamic to watch. A resolution of this divergence will likely dictate the market's next significant move.
• Follow-Through on OI Surge: The massive influx of new positions (evidenced by the +42,062 OI change) needs to be monitored. If prices begin to fall, it would validate the new shorts. If prices rise, the pressure on this large pool of fresh shorts will mount quickly.