In mid-July, I wrote an article about how the Commitment of Traders report on corn futures and how large speculators were net short for the first time in seven and half years.

Large speculators have been net short in six of the last seven weeks, with several weeks showing a net short position of over 50,000 contracts.

In mid-July, corn was in a downswing and was having a hard time moving above its 20-day moving average.

However, in the last few weeks, corn has rallied and we have seen a bullish crossover of the 10-day and 20-day moving averages. Yet we still see large speculators net short.

Shifting our attention to soybeans, the large speculators were net long 56,687 contracts two weeks ago. Now that might sound like a relatively bullish skew, but that is the least bullish the group has been since the beginning of 2012.

Over the last two weeks, soybeans have rallied almost 9 percent and this has caused the large speculators to shift gears. The group is now net long 105,395 contracts, but that isn’t all that much when you consider that over the past few years, the turning points have come when the group was net long over 250,000 contracts.

Both corn and soybeans have rallied sharply over the last two weeks, but the sentiment hasn’t shifted nearly as much as I would have thought. This suggests to me that both of these grains have more room to the upside.