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Money Managers Bet Against Corn Price Gains

Bets against rising corn prices jumped to the highest in almost a month in the week that ended Feb. 16, according to the Commodity Futures Trading Commission. 

Money managers were net-short by 137,563 contracts, an increase of 34%, the CFTC said in its weekly commitment of traders report today. That’s the biggest net-short position, or bet that prices will fall, since Jan. 19, commission data show.  

Speculative investors also increased their net-short positions in soft-red winter wheat by 4.6%. 

Net-shorts in corn increased as demand remains soft amid a global glut. World production is seen at the third-highest ever while stockpiles are expected to be a record, according to the U.S. Department of Agriculture. 

Investors, however, decreased their bets against soybeans and hard-red winter wheat. Net-short positions in soybeans fell 40% to 33,072 contracts, while bets on lower hard-red winter varieties declined by 8.6% last week, according to the CFTC. 

Money managers likely decreased net-short positions in beans on reports that Brazil is having trouble getting shipments out of its ports due to a backlog of demand and rainfall in some areas of the country. That may force buyers to turn to the U.S., which is a more reliable trading partner.

The weekly commitment of traders report from the Commodity Futures Trading Commission shows trader positions in futures markets. 

The report provides positions held by commercial traders, or those using futures to hedge their physical assets, noncommercial traders, or money managers, also called large speculators, and nonreportables, or small speculators. 

A net-long position indicates more traders are betting on higher prices, while a net-short position means more are betting futures will decline.

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