Bets on Wheat Rally Climb to Highest Since September
Hedge Funds Boost Bets on Wheat Rally
Carla Gottgens/Bloomberg
Record rains in Australia, the world’s fourth-largest wheat exporter, have delayed harvests , hampered grain transportation and reduced the quality of crops.
Record rains in Australia, the world’s fourth-largest wheat exporter, have delayed harvests , hampered grain transportation and reduced the quality of crops. Photographer: Carla Gottgens/Bloomberg
Hedge funds increased their bullish bets on wheat to the highest since September as adverse weather from Australia to Argentina threatens to damage crops and tighten global grain supplies.
The funds and other large speculators held net-long positions, or wagers on rising prices, that totaled 38,938 contracts as of Jan. 4, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. The holdings increased 6.6 percent from a week earlier to the highest since the week ended Sept. 21.
Wheat futures on the Chicago Board of Trade have surged 12 percent since Nov. 30, when hedge funds last held net-short positions. Record rains in Australia, the world’s fourth-largest wheat exporter, have delayed harvests, hampered grain transportation and reduced the quality of crops. Soybeans and corn also have rallied, jumping to 29-month highs on Jan. 3.
“You’ve had some weather concerns in Australia, and as much as anything, wheat has followed the rally in corn higher,” said Dan Cekander, the director of grain research for Newedge USA LLC in Chicago.
Wheat futures for March delivery rose 2.5 cents, or 0.3 percent, to $7.765 a bushel in Chicago by 11:21 a.m. London time. Prices touched $8.25 on Jan. 3, a five-month high, after surging 47 percent in 2010 as drought slashed output in Russia and dry weather threatened winter crops in the U.S. Great Plains.
Wheat has climbed in tandem with corn, which jumped 10 percent since the end of November on speculation that dry weather in South America will harm crops. Wheat and corn compete as a livestock feed and for acreage in the U.S., the largest exporter of both crops. Corn futures were last up 4.5 cents, or 0.8 percent, at $5.995 a bushel on the CBOT.
Hedge funds were net-long 373,999 corn contracts as of Jan. 4, down 5.7 percent from the previous week, when net-longs were at an eight-week high, CFTC data show. Hedge funds haven’t been net short in corn since April.
To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
Rate this Page