Hedge Funds Net Long Positions in CBOT Wheat contracts and CBOT Wheat Price
Latest CFTC Report
Recently there has been a significant increase in the large hedge funds long positions in CBOT Wheat as reported by the CFTC
Commitment of Traders. Viewing the black line in Figure 1 we observe the funds have increased their long positions from about 90,000 contracts last December to 165,000 contracts in the most recent report. This is the largest long positions since January 2014. We have also plotted the short positions (the red line) at about 105,000 contracts in the most recent report.
Figure 2 plots the net positions of the funds in CBOT Wheat as the difference between the longs and shorts (the green spikes) at about 60,000 net long contracts.
Figure 3 plots the net positions of the funds in CBOT Wheat (green spikes) with the CBOT Wheat prices (black line). The funds net positions track the prices showing net long positions occur during periods of price rallies. What is unusual about this current period is that the net long positions have been increasing during a period of price decreases. This suggest the large hedge funds believe prices are expected to rally soon as they have increased their net long positions during a period of decreasing prices.
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The Fundamental Analytics Team