Tuesday, January 5, 2016

Commodities: "Hedge funds bet on further ag price losses - after 'destructive' 2015"

Corn    354-0
Wheat 459-0

From Agrimoney:

Hedge funds bet on further declines in ags in 2016, even after a year termed by the Bcom as the "most destructive crash in a generation" for commodities as a whole, helped by 19% losses for grain and livestock bulls.
Managed money, a proxy for speculators, undertook a hefty selldown in the top 13 US-traded agricultural commodities in the week to December 29, to return to a net short position which has been unusual by historical standards, analysis of regulatory data overnight reveals.
The net short position, while at 8,415 lots modest in scope, represents a sharp turnaround from the net long of more than 190,000 contracts only two weeks before, the data from the Commodity Futures Trading Commission (CFTC) show.
Indeed, it follows six months of net long positions - meaning that long bets, which gain when prices rise, exceed short holdings, which profit when values fall.
'Destructive commodity crash'
The negative thinking also comes at the end of a year when commodities fell for a fifth successive year, this time by 25%, as measured by the Bloomberg Commodity Index (Bcom), which termed 2015 "the most destructive commodity crash in a generation".
As measured by Bcom, only cotton among major commodities posted a positive 2015, of 3.0%, although raw sugar futures did gain on a spot contract basis over the year, while the index does not include the likes of cocoa and palm oil, which also made headway.
Soft commodities as a whole lost 9.9%, according to Bcom, which pegged losses in livestock at 18.8% and in grains, which dropped for a third successive year, at 19.4%....