Headlines:
- Hedge funds reverse bullish softs-bearish grains betting on ags
Hedge funds reversed, in spades, their trend of placing bullish bets on soft commodities and bearish ones one grains, as Chicago wheat saw a rare buying spree, while sugar suffered its worst sell down in six months. Managed money, a proxy for speculators, raised by 3,587 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator. However, as in the previous week, the modest change in the headline number for the net long – – the extent to which long positions, which benefit when prices rise, outnumber short bets, which profit when values fall – disguised strong underlying trends. This time, it was a switch out of soft commodities – with hedge funds, unusually, net sellers of all four major New York-traded contracts – while grains saw a round of short closing which is believed to have continued late last week, spurring price gains.
Summary:
Corn continued higher overnight and in early trading but that strength of the move died off by the end of the trading day. Short covering from Friday had a little bit of follow through today but tapered off leaving Corn with only a gain of 0.25 at 254.50 when the dust settled today. The weather was not as wet a projected going into the weekend which left the Corn crop progress at close to 50% when the report was released. Last week’s figure was at 35%. Soybean futures were very strong today closing near at the top of the day’s trading range. November Beans is poised to test the 1000 mark given that it is rolling off of being oversold and is not yet overbought. The commitment of traders report suggest that speculative money is growing a bit bullish in that they added 10k contracts to their net long positions. November Beans put up 16.25 cents today and the January contract added 16.50 of its own. After closing above overhead resistance Wheat ticked higher on the heels of Corn and Soybean strength. The December contract was only up 2.25 cents when the day finished but it trajectory is looking promising in terms of moving up into the mid-November time line. The USDA crop ratings for Corn and Soybean was at 74% in the good to excellent category. That was up 1% for Corn and unchanged for Beans. Soybean is 62% harvested.
