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Wall Street’s bets on commodities put to the test

Rising volatility may have farmers looking at new crop soybean sales for 2017 already
Fund buying of crude started to slow before market broke along with ag.

The “Trump Trade” that buoyed Wall Street after the election is showing plenty of cracks as markets second guess the new president amid a world filled with trouble spots and surprise. One leg of this trade could have a big impact on agriculture, regardless of the policies emanating from Washington.

Hopes for fiscal stimulus from infrastructure spending and tax cuts spurred some on Wall Street to champion commodities as a play to benefit from an untick in inflation and need for raw materials. Instead, inflation slipped in March and commodities have turned tail. The CRB Index, a bushel basket of commodities, broke to new lows for the year on Friday.

Funds appear to be having doubts about commodities, including agriculture. Here’s a look at results from the April 21 Commitment of Traders.

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