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Fast money blindsided

Commodity bearish feel more pain

The hot money on Wall Street got burned this week, again learning about volatility in commodities.

Here’s what funds were up to through Tuesday, October 8, when the CFTC collected data for its latest Commitment of Traders released Friday.

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Exodus again

Big speculators trimmed bearish bets against agriculture for the fourth straight week, heading to the sidelines before Oct. 10 USDA reports. But after covering 37,525 net short positions they were still short a net 236,551 contracts. And after three months of selling, investors owning commodities through index funds finally started buying again too.

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Under water

Bearish speculators raced to buy back more of their short positions in corn early in the week, cutting bearish bets by 24,715 contracts. They sold again heavily after the USDA report, only to reverse course on Friday following hopes for a trade deal with China. These hedge funds likely are still short around 125,000 contracts now.

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Getting closer

Big speculators continued to buy back bearish bets against soybeans early this week, covering a net 7.360 positions. They’re likely close to even after buying in the wake of the bullish USDA reports.

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Bullish again

After doing a little selling in soybean oil earlier this month, big speculators started buying again this week, extending their small net long position by 5,395 contracts.

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Waiting for news

Big speculators slowed short covering in soybean meal ahead of the USDA reports, through they did buy back another 2,397 contracts from their bearish bets.

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Selling again

Big speculators were smaller sellers in soft red winter wheat ahead of the USDA reports, halting modest short covering and adding 1,203 contracts to their net short position.

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Following suit

Big speculators in hard red winter wheat followed a similar trajectory to SRW, adding back 2,102 contracts to their net short position this week.

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Storm warning

Large traders bought back more of their bearish bets in spring wheat ahead of this week’s unusual snow storm, cutting net short positions by 1,353 contracts.

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War clouds

Crude oil futures spiked higher two weeks ago when Saudi oil fields were attacked. Prices collapsed afterward on fears of a slowing world economy, prompting money managers to dump another $2.1 billion worth of futures and options. Then an Iranian oil tanker was attacked, sending prices higher Friday.

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