As Corn Prices Hit a 34 Month Low Managed Money is at Record Net Short in Corn

Alright everybody to the same side of the boat!
After touching $4.56 the December contract has reversed and is up a fraction at $4.6125.
First up, Bloomberg:

Corn Falls to Lowest Since 2010 on U.S. Record Outlook

Corn extended a decline to a 34-month low as cool weather and moist soil increase yield prospects in the U.S., the world’s biggest grower and exporter. Wheat dropped to the lowest since June 2012, and soybeans fell.

Near-to-below-normal temperatures in the Midwest in the first half of August will favor corn pollination, while moisture will stay favorable in southern and eastern areas, DTN wrote in a forecast today. Farmers may harvest a record 13.95 billion bushels, 29 percent more than last year, when drought hurt crops, U.S. Department of Agriculture data show.

“We have another week of cool temperatures ahead, and some rains are going to hit the Corn Belt now through Wednesday,” Rich Nelson, the chief strategist at Allendale Inc. in McHenry, Illinois, said by telephone. “We do want some warmth to show up, maybe starting in late August or September, but that’s taking a back seat to this cool weather.”

Corn futures for December delivery fell 0.7 percent to settle at $4.605 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.56, the lowest for a most-active contract since Oct. 4, 2010. The grain retreated 6.3 percent in July, the sixth straight drop and the worst run since 1996.

Production will top the USDA’s forecast, rising to 14.269 billion bushels in 2013, researcher Doane Advisory Services Co. in St. Louis said Aug. 2. Doane’s August corn estimate last year was among the most-accurate....MORE

And from Agrimoney:
Hedge funds most gloomy ever on ag price prospects

Hedge funds have turned their least optimistic ever on prospects for agricultural commodity prices, slashing exposure to rising soybean futures, and hiking their net short position in corn to a record high.

Managed money, a proxy for speculators, slashed its net long position in futures and options in the major US-traded agricultural commodities by nearly 48,000 contracts to 58,489 lots, Agrimoney.com analysis of regulatory data shows.

This net long – the level to which long positions, which benefit when prices rise, outnumber short bets, which profit when values fall – is the lowest since records began seven years ago.

And it reflects, rather than waning interest in agricultural commodities, growing pessimism over prices, which for grains and oilseeds, and many soft commodities too, are being depressed by expectations of much-improved supplies.

Bearish on corn

Such expectations are particularly strong in corn, for which benign Midwest weather during peak pollination over the last three weeks has prompted a turn upward in the tide of US yield expectations, from the likes of FCStone, Macquarie and Commodity Weather Group.

Corn prices have fallen to their lowest since 2010, a fact that Commerzbank on Monday noted was "reflected in the market positioning of short-term-oriented market participants".

As of last Tuesday, managed money held a net short in corn of 108,089 lots, the most bearish positioning on the grain on record, reflecting a jump above 300,000 in the gross short position for the first time.

The net short is equivalent, in crop terms, to more than 500m bushels, or some 13.7m tonnes....MORE