Speculators who had built massive short positions in recent months were caught leaning the wrong way after the U.S. Department of Agriculture cut its corn and soy harvest and wheat planting estimates, in reports released on Tuesday.
Speculators, looking to lock in profits on their bets for market declines, keyed in on the lowered harvest estimates as well as the six-year low in winter wheat plantings.
The USDA reported that corn and soybean supplies as of Dec. 1 were still at record highs despite the lowered harvest estimates. Wheat stocks as of Dec. 1 stood at their highest since 2010.
The USDA also forecast that already-ample supplies of all three commodities will remain robust throughout the marketing year due to murky export demand and plentiful global stocks.
Read more: St. Louis Post-Dispatch