WASDE Jul 2026 – Cotton Specs at Extremes vs Supply
By The COT Data Team · Jul 10, 2026
Every month, the USDA updates its global crop supply estimates and the CFTC publishes speculator positioning data—this month, cotton speculators are positioned at multi-year extremes despite loose fundamentals in both the US and globally.
Executive Summary
The most significant fundamental-positioning divergence this month is in cotton: specs are net long 88,428 contracts (97th percentile over 2 years, 84th over 10 years) despite a US stocks-to-use ratio of 32.4%—6 percentage points above the 5-year average—and a world S/U of 64.7%, also above trend. Corn and soybean specs have added to net long positions over the past week (+36,803 and +36,180 contracts respectively), positioning that appears at odds with comfortable US supply pictures but may reflect world supply tightening (-0.9pp YoY for corn, -1.0pp for soybeans). Wheat specs remain net short, consistent with US S/U at 46.3%, well above both the 5-year average (37.5%) and the world S/U (38.1%).
📊 Methodology & Data Sources
Data Sources
- WASDE: USDA World Agricultural Supply and Demand Estimates — monthly supply/demand balance sheets
- COT: CFTC Commitment of Traders Report (Legacy Format)
- Percentiles: Dual window — 2-year (104 weeks) primary + 10-year (520 weeks) structural context
- 📊 View Interactive Dashboard → | 📥 Download COT Data
Global Backdrop
The FAO Food Price Index rose to 132.1 in February 2026 (+2 points month-over-month, +5.6 over three months), indicating broad upward pressure across global agricultural commodity prices. Nitrogen fertilizer costs continued rising (+3% over three months to an index of 501.7), maintaining input cost pressure on crop producers heading into the Northern Hemisphere growing season.
Corn: World Tightening vs Comfortable US Supply
US corn ending stocks for 2025/26 stand at 2,126.8 million bushels, translating to a stocks-to-use (S/U) ratio of 12.9%—3 percentage points above the 5-year average of 9.9% and 2.6 percentage points higher than last year. The US balance sheet looks comfortable. The WASDE has held corn estimates unchanged month-over-month and through the entire campaign to date, signalling stable fundamentals with no revision momentum in either direction.
The world S/U tells a different story: at 23.8%, global corn supplies are 2.8 percentage points below the 5-year average and have tightened by 0.9 percentage points year-over-year. The US vs world divergence is notable—US S/U is 10.9 percentage points tighter than the world figure, an unusual inversion that may reflect concentration of tightness outside major US export competitors.
Specs are positioned net long 100,980 contracts (59th percentile over 2 years, 49th over 10 years), a mid-range position structurally but one that increased by 36,803 contracts in the latest week. The positioning appears inconsistent with the comfortable US supply picture in isolation, but the world tightening narrative may explain the recent spec accumulation—traders may be viewing corn through a global lens rather than focusing solely on US carryout. The corn story this month is world supply tightening driving moderate spec longs despite a balanced US balance sheet.
Soybeans: Comfortable US Stocks, Divergent Positioning
US soybean ending stocks are projected at 349.9 million bushels, an S/U of 8.2%—1.5 percentage points above the 5-year average of 6.7% and 0.9 percentage points higher than last year. US soybean fundamentals are comfortable relative to recent history. The WASDE has remained unchanged month-over-month and throughout the 2025/26 campaign, showing no revision pressure.
World soybean S/U stands at 30.1%, 1.1 percentage points above the 5-year average, though it has tightened by 1.0 percentage point year-over-year. The US vs world divergence is extreme: US S/U is 21.9 percentage points tighter than the world figure, the largest gap of any commodity this month and suggesting that non-US producing regions (likely South America) are holding the bulk of global carryout.
Specs are net long 112,807 contracts (72nd percentile over 2 years, 68th over 10 years), an elevated position relative to both recent and structural history that increased by 36,180 contracts in the latest week. This represents a fundamental divergence: US supply is comfortable versus the 5-year average, yet specs are positioned net long at levels well above the median—world S/U tightening of 1pp YoY and potential South American production concerns may be driving the positioning despite ample US stocks.
Soybean Complex: Crush Products Aligned with Bean
Soybean meal specs are net long 62,388 contracts (80th percentile over 2 years, 48th over 10 years), an elevated position in the recent window that increased by 13,702 contracts over the week. Soybean oil specs are net long 94,666 contracts (82nd percentile over 2 years, 88th over 10 years), extreme across both timeframes and down slightly (-4,783 contracts) over the week. Both crush products show elevated spec net long positioning consistent with the broader soybean complex, suggesting the spec thesis is not isolated to the bean itself but extends across the entire value chain—potentially reflecting demand-side optimism (meal for livestock feed, oil for renewable diesel) rather than pure supply tightness.
Wheat: Net Short Positioning Aligned with Surplus
US wheat ending stocks are projected at 937.6 million bushels, an S/U of 46.3%—8.8 percentage points above the 5-year average of 37.5% and 2.9 percentage points higher than last year. The US wheat balance sheet is loose by historical standards. The WASDE has held estimates unchanged throughout the campaign, showing no revision momentum.
World wheat S/U is 38.1%, exactly in line with the 5-year average but up 2.3 percentage points year-over-year—indicating global supply is stable-to-loose. The US vs world divergence shows US S/U is 8.2 percentage points looser than the world figure, confirming the US-specific surplus.
Specs are net short -49,730 contracts (59th percentile over 2 years, 38th percentile over 10 years—a mid-range short position), increasing by 5,274 contracts (becoming less short) over the latest week. HRW wheat specs are net short -6,013 contracts (71st percentile over 2 years, 48th over 10 years), also reducing shorts by 4,326 contracts. The wheat story is straightforward: spec net short positioning is aligned with a loose US and stable-to-loose world supply picture, with recent short covering perhaps reflecting technical factors rather than fundamental shifts.
Cotton: Extreme Positioning Despite Loose Fundamentals
US cotton ending stocks are projected at 4,400 thousand bales, an S/U of 32.4%—6 percentage points above the 5-year average of 26.4% and 3 percentage points higher than last year. US cotton fundamentals are the loosest relative to historical norms of any commodity this month. The WASDE has held estimates unchanged throughout the campaign.
World cotton S/U stands at 64.7%, 2.1 percentage points above the 5-year average and up 2.7 percentage points year-over-year—indicating global supply is also loose. The US vs world divergence shows US S/U is 32.3 percentage points tighter than the world figure, the largest absolute divergence of any commodity, but both are loose in absolute terms.
Specs are net long 88,428 contracts (97th percentile over 2 years, 84th percentile over 10 years), extreme in the recent window and elevated structurally, increasing by 10,580 contracts in the latest week. This is the month's clearest fundamental divergence: US supply is 6pp above the 5-year average, world supply is 2pp above trend, yet specs are positioned at near-record net long levels. The positioning may reflect forward-looking demand optimism (global textile demand recovery post-pandemic lags) or supply concerns for the next crop year not yet reflected in current-year WASDE estimates, but it is notably inconsistent with the current fundamental backdrop.
Softs & Livestock: Positioning Snapshot
Sugar #11 specs are net short -59,273 contracts (50th percentile over 2 years, 20th over 10 years), a mid-range position recently but a structural short, increasing by 37,457 contracts (becoming less short) over the week—no extreme positioning. Coffee C specs are net long 25,623 contracts (23rd percentile over 2 years, 27th over 10 years), a below-median long position with no notable extremes. Cocoa specs are net short -12,729 contracts (24th percentile over 2 years, 9th over 10 years), a modest short position structurally with no recent extreme movement.
Live cattle specs are net long 81,668 contracts (24th percentile over 2 years, 55th over 10 years), a below-median position recently with no extremes. Lean hogs specs are net short -64,421 contracts (1st percentile over 2 years, 1st over 10 years), an extreme short position across both timeframes—the most extreme positioning in the livestock complex—decreasing by 2,150 contracts (adding to shorts) over the week. Feeder cattle specs are net long 2,526 contracts (18th percentile over 2 years, 45th over 10 years), a modest long position with commercials also long—the only commodity this month with alignment between specs and commercials.
Cross-Commodity Themes
Spec positioning this month shows divergent themes across grain and fibre markets rather than a unified risk-on or risk-off ag theme. Corn and soybeans both saw large weekly increases in net long positions (+36,803 and +36,180 contracts respectively), suggesting coordinated spec buying across the grain complex, yet wheat specs remain net short—indicating the grain buying is selective rather than broad. Cotton stands apart with extreme net long positioning (97th percentile over 2 years) despite loose fundamentals, a unique story not reflected in other markets.
The livestock complex shows stress in lean hogs (extreme net short at the 1st percentile across both windows) while cattle positioning remains unremarkable, suggesting protein market dynamics are idiosyncratic rather than macro-driven. Across the board, commercial positioning remains opposite to specs (all markets show "alignment: opposite"), confirming that hedgers are taking the other side of spec positioning rather than reinforcing directional bets—normal market functioning with no signs of one-sided commercial hedging pressure.
📍 Key Questions for Next Month
- Will cotton specs at the 97th percentile (2yr) reduce net long positions if the August WASDE holds US S/U above 30% for a fourth consecutive month?
- Will corn and soybean specs continue adding to net longs (+36,803 and +36,180 contracts this week) if world S/U estimates tighten further in the next WASDE update?
- Will lean hogs specs at the 1st percentile (extreme net short across both windows) begin covering shorts if August hog production estimates show tightening supply?
This analysis combines USDA WASDE supply/demand data with CFTC positioning data for educational purposes only. It does not constitute financial advice.
The next WASDE is expected around the 10th of next month. Check back then for the updated analysis.
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