by Agrimoney.com
Speculators' bets on rises in prices of Minneapolis wheat have risen to an all-time high, lifted by the prospect of the wet planting season cutting US, and Canadian, spring wheat production well below initial forecasts.
Speculators' net long position in Minneapolis wheat – that is, the advantage in positions which gain when prices rise over those that profit when prices dip – rose 8% to more than 27,000 contracts as of the end of May, Australia & New Zealand Bank said, following analysis of regulatory data.
Prospects for the North American harvest of the high-protein spring wheat that is traded in Minneapolis have dimmed with wet weather which, as of a week ago, had seen 68% of the crop planted, compared with an average of 95% by now.
In Canada, 73% of spring crops had been sown compared with the average of 87%.
Spring wheat sowings typically finish in mid-to-late May for most US states, and by June 3 for North Dakota, the top grower, leaving many analysts believing that seedings will not rise the 5% to 14.4m acres that farmers had planned, according to the US Department of Agriculture.
Minneapolis vs Chicago vs Kansas
The rise in speculative interest helped a rise in Minneapolis wheat to contract tops on May 26, a performance the spot July contract has since built on, hitting $10.90 a bushel on Monday, the highest since July 2008.
The record for a spot Minneapolis contract was set in February 2008, at $24.25 a bushel.
Speculators also raised their long interest in Chicago, soft red winter, wheat in the latest period, bit cut their expectations of rising prices of the hard red winter variety traded in Kansas.
"The lower total in Kansas may be the result of substantial selling of inter-market length held against the Chicago contract," Brian Henry at Benson Quinn Commodities said.
Furthermore, rains have stabilised prospects for much of the crop, which has suffered a dearth of moisture since late 2010.
Oil rush
Speculators also raised net long in Chicago corn, while remaining below record levels reached in autumn last year.
"Overall, speculators are still bullish on the grain market, with net longs in wheat and corn still elevated despite the volatility of recent months," ANZ said.
Speculators have also doubled their net long in soybean oil in two weeks, to 72,000 on ANZ calculations, and continued revivals in interest in cotton and sugar too.
ANZ has a broader definition of speculative interest than some other observers, calculating its data from "managed money", "other" and "non-reportable positions" criteria of reports published by the Commodity Futures Trading Commission, the US futures market watchdog.
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