Date: Feb 25, 2011
Hedge funds are leading an exodus from agricultural markets, slashing bullish bets in the U.S. from almost the highest levels on record after grain prices slumped, money managers said.
The 7.9 percent plunge in wheat since Feb. 18 and a decline in corn and soybeans means speculators probably kept cutting positions this week, said Nic Johnson, who helps manage about $30 billion in commodities at Pacific Investment Management Co. in Newport Beach, California. Speculators reduced bets on rising wheat prices by 23 percent in the week ended Feb. 15, Commodity Futures Trading Commission data show. Bullish bets on soybeans fell 18 percent and those for corn slid 3.4 percent. [.....]. Agricultural “products had a great run, but now the opportunity appears to be in oil and gold,” said Walter “Bucky” Hellwig, who oversees $17 billion at BB&T Wealth Management in Birmingham, Alabama. “If I am the hedge fund manager, I’m getting killed on the long grain positions.”
My comment: it seems that what we are seeing now is an opportunistic shift to oil positions as Libya's production is frozen and uncertainty prevails on many fronts. This may well be sort lived, particularly as regards corn as US stock-to-use levels have reach a historically low point of 5%.
Link: http://www.bloomberg.com/news/2011-02-25/hedge-funds-cutting-food-price-bets-as-grain-prices-take-harrowing-fall-.html
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