Farm Progress

Funds love it or leave it

Big speculators dump commodities but index funds start buying.

Bryce Knorr 1, Senior Market Analyst, Farm Futures

July 21, 2018

2 Min Read

While grain markets rallied into the end of the week, big speculators were selling hot and heavy earlier. But money managers on Wall Street turned friendly, adding index fund positions to gain exposure to commodities.

Here’s what funds were up to through Tuesday, July 17, when the CFTC collected data for its latest Commitment of Traders. 


Money talks

Big speculators sold crops and livestock across the board last week, extending bearish bets by 147,609 contracts. But index fund traders did just the opposite, adding all those ag contracts, extending their net long position for the first time since April by 70,688 lots overall.


Crunch time

Big speculators sold in the latest week, at least according to the CFTC tally. That showed hedge funds adding 61,175 contracts to their bearish bets. But the specs actually started covering those short positions on Monday according to daily player sheets, helping futures turn around.


Shorting again

Big speculators returned to the short side in the latest CFTC period, adding 11,658 contracts to their net short position. As with corn, however, these hedge funds actually started covering bearish bets on Monday.


No place to hide

Vegetable oil remains weak internationally, and big speculators are one reason why. Hedge funds sold a net 26,790 contracts in soybean oil this week to extend their bearish bet to an all-time record 89,209 contracts.


Dribble down

Big speculators were selling soybean meal again this week in the CFTC report, cutting another 3,734 contracts off their net long position.


One more time

Big speculators sold 12,709 net contracts of soft red winter wheat this week, before starting to cover some of those bearish bets, helping the market rally.


Hard times

Hard red winter seemed headed for a test of contract lows last week, when hedge funds were selling again. Big speculators trimmed 5,638 contracts from the net long position as of Tuesday, when the market was already moving off those lows.


Bad record

Large traders in spring wheat set a new record for bearish bets as of Tuesday, adding another 1,761 contracts to their net short position before the market started to heal.


Running on empty

Money managers dumped nearly $2.2 billion in crude oil futures and options as of Tuesday, helping drive prices lower. But by Friday the market was churning higher again, topping $70 a barrel.

About the Author(s)

Bryce Knorr 1

Senior Market Analyst, Farm Futures

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