Monday, March 17, 2014

Futures: Hedge Funds Most Bullish on Agricultural Commodities In Three Years

From Agrimoney:
Hedge funds turned their most bullish on agricultural commodities for three years, as they flocked to bet on higher grain prices amid the mounting tensions over Ukraine, and raised the stakes on the sugar rally too.
Managed money, a proxy for speculators, raised its net long position in futures and options in the top 13 US-traded agricultural commodities, by more than 133,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator.
The increase took the net long in these commodities, from cotton to cattle, above 1.0m contracts for the first time since March 2011.
And the gain was fuelled by a dash to bet on higher grain prices amid concerns over the Ukraine, a major exporter of corn and wheat, besides fears over US weather, deemed too dry in many areas for winter wheat emerging from dormancy, and too cold to enable speedy corn germination.
'Significant structural changes'
In Chicago corn, hedge funds raised their net long position by more than 51,000 contracts to 209,561 lots, the highest since December 2012, when the hangover from the drought-hit US harvest was still supporting prices.
Managed money has now lifted its net long position in corn by more than 175,000 contracts in a month, the second-biggest for any four-week period, behind only that seen in July 2010 when Russian drought sent grain prices soaring.
In Chicago wheat, hedge funds turned net long for the first time since October, fuelling the rally which has sent prices to the four-month highs.
The CFTC report "drives home the significant structural changes taking place in the wheat market", Jonathan Watters at Benson Quinn Commodities said....MORE
The news was greeted by the most across the board declines we've seen in a while:
Symbol Last Chg
Corn 478-0-8-0
Soybeans 1377-0-11-4
Wheat 674-0-13-2
Cocoa 2984-8
Coffee 193.30-5.10