From Agrimoney:
Hedge funds were driven by worsening weather for grains to undertake, by far, their biggest swing positive in positioning in agricultural commodities on record, official data later will reveal.
The Commodity Futures Trading Commission, the US regulator, is poised later on Monday to reveal that managed money, a proxy for speculators, slashed its negative positioning in futures and options in the top 13 US-traded agricultural commodities, turning net long for the first time in nearly three months.
Net long means that long positions, which profit when values rise, exceed short holdings, which benefit when values fall.
Indeed, from holding a net short of 27,560 lots on June 23, hedge funds turned to a net long of 342,857 contracts as of June 30, the date as of which the updated data, seen by sources including Rabobank, will be accurate.
That overall swing of 371,417 lots would represent by far the biggest turn bullish in hedge fund positioning on records going back to 2006 – far exceeding the previous high of 208,019 contracts set in July 2010, amid a rally in grains fuelled by concerns over dryness in the European Union and the former Soviet Union.
'Ongoing global weather concerns'Weather fears were behind the latest swing positive in positioning too, with Midwest rains holding up the harvest of US soft red winter wheat, the type traded in Chicago, besides undermining the condition of corn and soybean crops.Meanwhile, dryness has been undermining hopes for grain crops in Australia, the European Union, Argentina and Canada, where many analysts have also cut expectations for canola output.In Chicago wheat, the CFTC data will show hedge funds eradicating a net short of 52,716 lots in favour of a net long of 14,106 contracts, according to sources, including Rabobank, which have seen the statistics....MORE
