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Investors Most Bullish Hard-Red Winter Wheat in Two Years as Acres Plunge to Lowest Since 1909

Winter Wheat Acres Fall to Second-Lowest on Record, USDA Says

Money managers held the biggest net-long position in hard-red winter wheat in more than two years this week on forecasts that growers slashed total winter acreage to the lowest in 107 years.

Investors held 23,212 net-long futures contracts in the grain as of Tuesday, the largest such position since the last week of December 2014, according to the Commodity Futures Trading Commission.

Growers likely cut acres of hard-red winter wheat, grown mostly in the southern Plains, by 12% last fall, the Department of Agriculture said in a report yesterday. Planted area is estimated at 23.3 million acres.

In Kansas, the biggest grower of winter wheat in the U.S., farmers seeded 7.4 million acres with hard-red winter wheat, down 13% from the prior year. In Oklahoma and Texas, tied as the second-largest producers, acreage fell 10% to 4.5 million in each state, according to the USDA.

Total winter wheat area was reported at 32.4 million acres, down 10% from 2016 and 18% from 2015, the second-lowest acreage in history behind only 1909, according to the government. Seeding began in early September and was at or ahead of the five-year average through mid-November when planting was finished.

Declining acres and a hard freeze last month, along with threatening weather so far in 2017, likely have speculators on edge, said Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas.

“We’re going to bring acres down a lot,” he said. “It’s not going to change the world supply situation, but maybe this is the beginning of things falling more into place.”

Money managers reduced their net-short positions, or bets that prices would decline, in corn for a second straight week to the lowest level in almost a month. Speculative investors were net-short by 77,478 contracts as of January 10, the lowest level in four weeks, according to the CFTC. That’s down from 94,034 the prior week.

Soybean investors were net-long 99,478 contracts as of Tuesday, little changed from 98,254 contracts seven days earlier, the CFTC said. Net-shorts in soft-red winter wheat fell to 96,583 contracts last week, down from 114,619 the prior week.

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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