Hedge Funds Boost Bullish Agriculture Bets as Corn, Soy Yields May Slump
A field of corn grows in Kasbeer, Illinois
Daniel Acker/Bloomberg
A field of corn grows in Kasbeer, Illinois.
A field of corn grows in Kasbeer, Illinois. Photographer: Daniel Acker/Bloomberg
Speculators increased bullish bets on agricultural commodities to the highest level since early May after adverse weather eroded yield prospects for corn and soybean crops in the U.S., the world’s top grower and exporter.
Hedge funds and other speculators raised their net-long positions across 11 agricultural futures and options by 15 percent to 776,774 contracts in the week through Aug. 23, government data compiled by Bloomberg show. That’s the highest since May 6. Funds became bullish on wheat for the first time since June and wagers that soybeans will gain rose 64 percent.
“It’s really all on the supply side,” Chris Nagel, a market analyst at Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. “Investors will keep piling money into corn and beans until they see better certainty what the crop size will be.”
The hottest summer since 1955 in Iowa and Illinois may mean lower yields for corn as signs of diminished output appeared last week during the four-day, seven-state Professional Farmers of America Midwest field tour. The worst U.S. crop conditions since the dust bowl era of the 1930s are tightening domestic supplies of cotton.
Corn Gains
Corn futures for December delivery gained 4.5 cents, or 0.6 percent, to $7.715 a bushel at 10:16 a.m. on the Chicago Board of Trade, after touching $7.79, the highest since June 9. Soybeans rose as much as 1.2 percent to a six-month high of $14.41 a bushel on the CBOT. Cotton for December delivery climbed 1.22 cents, or 1.2 percent, to $1.0554 a pound on ICE Futures U.S. in New York.
A broader measure showed that funds also raised their net- long positions in 18 commodities by 9 percent to 1.11 million futures and options contracts, data from U.S. Commodity Futures Trading Commission show.
The Standard & Poor’s GSCI Spot Index of 24 raw materials gained as much as 1.2 percent to 665.54, the highest since Aug. 4. The gauge jumped 2.6 percent last week, the biggest such advance since early July.
Speculators reduced positions in gold by 7.8 percent to 201,294 contracts, the third straight decline, government data show. Holdings fell as price rose to a record $1,917.90 an ounce on Aug. 23.
Gold futures for December delivery rose $8.90, or 0.5 percent, to $1,806.20 at 11:17 a.m. on the Comex in New York.
To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
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