by Agrimoney.com
Investors continued to pile into sugar, and lifted long bets on livestock too, even while slashing their exposure to corn and soybeans to their lowest in about a year.
Large funds cut their net long position in Chicago corn futures to 214,400 contracts as of last Tuesday – down more than 20% in a week and the lowest figure since last summer, official data showed.
Net length measures the advantage of long bets on futures contracts, which gain in a rising market, with the short positions which profit when prices fall.
And with informal data showing sales continued last week - potentially at an even faster rate - funds' net long exposure to corn may have halved in a fortnight.
Assuming daily data last week are correct, large funds "will have come out of another 25+% of their length bringing the total down to around 160,000 contracts", Jon Michalscheck said.
Speculators quit
The decline highlights the extent of the exodus of investors from farm commodity markets in the face of a deteriorating macroeconomic backdrop and improved prospects for many crops too, given a change in much of the northern hemisphere to better weather.
For soybeans, the net length fell by more than one-third to 35,400 lots over the week, compared with figures of some 150,000 contracts earlier in the year.
For Chicago wheat, non-commercial investors increased their – traditional – net short position to the highest for some seven months, meaning more funds were betting on prices falling than rising.
Speculators fuelled the sell-off, with their net long position across the 14 main US crop futures markets falling, in weight equivalent, by 15m tonnes to 53m tonnes, according to Australia & New Zealand Bank.
Back in favour
However, sugar defied the sell-off, seeing net longs by non-commercial investors rise by roughly one-quarter to 95,000 lots, one of the highest levels of the year.
"Speculators continued to increase their exposure to sugar, rising 11,000 to 176,000 contracts," noted ANZ, which uses a broader interpretation of speculator than some other houses in examining investor positioning data from the Commodity Futures Trading Commission, the US regulator.
Sugar prices have proved relatively firm amidst this month's slide in farm commodities markets, amidst concerns for output from top producer Brazil, although they opened weaker in both London and New York on Monday.
Similarly, non-commercial investors also increased net long exposure in Chicago live cattle, whose price has bounced since data showed a slide in US feedlot inventories, and in lean hogs.
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