Hedge funds flip to net shorts in cotton, soybeans, wheat

Hedge funds swung to betting on price falls in cotton, soybeans and wheat, amid ideas of easier supplies, as they cut bullish positioning in agricultural commodities to the weakest in three months. Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from coffee to cattle, by more than 43,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator. The reduction in the net long position – the extent to which long holdings, which profit when values rise, exceed short bets, which benefit when prices fall – represented a third successive week of decline. The selldown, which took the net long to its lowest since October, has been attributed to factors including the strengthening dollar, which reduces the competitiveness of dollar-denominated assets, but also to reduced supply concerns, which has allowed the removal of some risk premium. Slower exports For Chicago wheat, in which hedge funds returned to a net short for the first time in seven weeks, price declines have reflected a slowdown in US exports – at 14.4m tonnes so far in 2014-15 down one-third year on year … continue reading

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Source: CTRM Center

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