Corn 358-6 down 1-4
Wheat 457-4 down 0-6
Hedge funds hike bearish ag bets, amid 'weak macros, rising stocks'
Hedge funds have undertaken a dramatic shift bearish in their positioning on agricultural commodities, building a record net short position in hard wheat, and selling down in cotton at a record rate.Managed money, a proxy for speculators, hiked its net position in futures and options in the top 13 US-traded agricultural commodities by 176,017 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission shows.The dramatic turn bearish in positioning drove the overall net short to 187,671 contracts – the second highest on records going back to 2006.(The net short represents the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain.)And it came not just amid a dire period for broad markets, with concerns over bank solvency adding to fears of slower economic growth which have spurred still-looser monetary policy in many countries, but bearish ideas on crop supply and demand too."Weak macros and rising US inventories" affected the market, Rabobank said.Record bearish on hard wheatAdding pressure to prices, the US Department of Agriculture in its much-watched Wasde crop supply and demand report last Tuesday raised estimates for US inventories of all of the main four crops - corn, cotton, soybeans and wheat – and lifted forecasts for world stocks of most of them too.
Indeed, for wheat, the USDA hiked its estimate for world inventories of the grain at the close of 2015-16 by 6.8m tonnes to a record 238.9m tonnes, reflecting largely an upgrade to ideas on Chinese inventories, but also on US supplies.Extra stocks imply lower prices, in signalling that buyers face less pressure to pay up for supplies.And hedge funds in the week to Tuesday hiked their net short in Chicago soft red winter wheat futures and options by a historically large 32,000 contracts, while in Kansas City-traded hard red winter wheat speculators lifted their net short to a record 26,317 lots....MORE