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Price action on Thursday and Friday pointed toward the commodity trading funds wanting to reduce risk at the end of the month and ahead of the weekend. Squaring off positions involved taking profit on the longs in corn and soybeans, but covering shorts held against wheat. Speculators stepped to the sidelines by closing out some of their bets, but they did not reverse them. As we track the ebb and flow of speculative positioning, it should be advised to not fight the funds if they are going to continue to play defense in front of a robust net-long in corn while also going on the offensive in soybeans and wheat. When there are signs that the funds are not just liquidating longs but also opening new shorts, the approach for hedgers will be to follow the funds and sell ahead of a possible flip back into the type of bearish environment that dominated for most of the past two years.   Here are some observations about the current state of trader positions and what they mean for the market:   – Funds are significantly more bullish for corn than at any point over the last two years, although the net-long…

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