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Funds go 'long' grains

07/18/2011 @ 8:10am

CHICAGO (Dow Jones)--Money managers rebuilt bullish corn positions last week, reflective of the price gains that occurred after futures rallied on crop threats and fears of smaller supplies, according to data issued Friday by the U.S. Commodity Futures Trading Commission.

Large managed funds, including hedge funds, increased net long position in corn futures and options traded at the Chicago Board of Trade by 13% to 216,070 contracts in the week ended Tuesday. The net position is the difference between the numbers of long contracts, or bets prices will rise, and short contracts, or bets prices will fall. Traders in the category added 15,761 long positions and cut short positions by 9,489 contracts.

Funds increased their bullish bets during the period after crop threats and strong Chinese demand returned trader focus to the market's tight supply outlook. Corn prices climbed 7% during the week ended Tuesday July 12.

Money managers maintained the same mindset in other agricultural markets during the CFTC's most recent reporting period. They increased their net long position in soybean futures traded at the CBOT by 40% to 79,925 contracts in the week ended Tuesday and moved to a net short position in wheat of 9,706 contracts from a net short position of 15,297 the previous week, according to CFTC data.

In live cattle, money managers increased their net long position by 17% to 80,402 contracts. They boosted their net long position in lean hogs to 38,693 contracts from 32,426 contracts a week earlier as futures prices climbed.

-By Andrew Johnson Jr, Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com

(END) Dow Jones Newswires

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