Hedge funds became more bearish on grains than New York-traded soft commodities as concerns waned over dryness damage to corn output – while hurricane worries prompted a surge in betting on cotton price rises.
Managed money, a proxy for speculators, expanded its net short position in futures and options in the top 13 US-traded agricultural commodities, from wheat to coffee, by 2,566 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
However, the relatively small gain in the net short – the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain – disguised contrasting movement between the three ag complexes.
While hedge funds raised their net short in grains by nearly 19,000 lots, while selling down in Chicago-traded livestock for an eighth successive week, the longest such spree in two years, they were net buyers of nearly 24,000 lots in the four-main New York soft commodities – arabica coffee, cocoa, cotton and raw sugar.
(Source – http://www.agrimoney.com/news/hedge-funds-turn-more-bearish-on-grains-than-soft-commodities–11005.html)