Hedge funds raised bets on rising agricultural commodity prices to the highest in nearly two years, provoking concerns of a sell-off in the offing – particularly in sugar, in which bullish betting hit a record high.
Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by nearly 65,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The buying took the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – nearly to 680,000 contracts, the highest since June 2014, and supporting talk around in the market of funds moving cash into ags.
As Agrimoney.com noted last week, many brokers have reported that the prospect of US interest rate rises, and potentially higher inflation, has prompted many investors to switch out of equities into commodities.
‘General supply concerns’
However, the extent of the hedge fund net long, in raising questions over how much appetite funds have left for betting on ag price rises, raised market concerns on Monday of profit-taking by investors, in anticipation of a potential wave of position-closing by speculators.
(Source – http://www.agrimoney.com/news/hedge-funds-spree-of-bullish-bets-on-ags-spurs-fears-of-sell-off–9577.html)