Monday, January 30, 2017

Ag Futures: "Hedge funds hike bullish bets on ags - but is this a high water mark?"

Last Chg
Corn 358-4-4-0
Soybeans 1035-0-14-2
Wheat 416-2-4-2

From Agrimoney:

Hedge funds, despite a sell-off in cocoa, hiked bullish bets on agricultural commodities to the highest in seven months, in a move which raised some ideas that further such buying may be harder to come by.
Managed money, a proxy for speculators, hiked its net long position in futures and options in the top 13 US-traded agricultural commodities, from hogs to sugar, by 145,883 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The increase in the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – took it to 737,652 contracts, doubling so far in 2017 to its highest level since June.
And it reflected a further rise in bullish positioning in both grain and livestock complexes, contrasting with an easing in the net long in New York-traded soft commodities under the weight of a wave of selling in cocoa, in which speculators' gross short position hit a record high.
'Could prove bearish'
In US-traded grains, including the soy complex, hedge funds turned bullish at the fastest rate since April top lift their net long above 300,000 lots for the first time in six months, spurred by concerns over the dent to Argentine row crop prospects after heavy rains.
However, with Argentine weather fears now easing - MDA said that "drier weather in central crop areas is allowing wetness concerns to ease a bit" – investors flagged doubts over speculators' willingness to extend bullish bets.
On soybeans, for instance, broker Benson Quinn Commodities said that the "big increase in the fund long" as revealed by the Commodity Futures Trading Commission data "could prove bearish" for futures....MORE