Hedge funds increased their bearish wagers on grain futures to the most since the early months of the pandemic as ample supplies and demand woes weigh on prices.
(Bloomberg) — Hedge funds increased their bearish wagers on grain futures to the most since the early months of the pandemic as ample supplies and demand woes weigh on prices.
The combined net-short position in corn, wheat and soybean contracts traded on the Chicago Board of Trade was the biggest since June 2020 in the week ended Tuesday, according to US Commodity Futures Trade Commission data compiled by Bloomberg.
The move shows a steep reversal in expectations after years in which disruptions caused by the Covid-19 pandemic, droughts and the war in Ukraine sent prices for the vital food staples surging. Now, ending stocks of soybeans and corn are expected to jump to the highest in years, aided by bumper crops in Brazil and the US.
A Bloomberg gauge of near-term contracts for soybeans, corn and wheat has lost more than 23% this year after touching a record high last year. The decline has helped alleviate inflationary pressures.
The big short position adds to volatility risk, as any news prompting investors to exit their bearish bets could lead to abrupt price rallies.
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