Concerns grew over the extent of hedge fund buying in grains as sales in coffee and sugar prompted Societe Generale to caution over the potential for a short-covering wave in the soft commodities.
Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities by 38,802 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The buying took the net long to 549,437 contracts, the largest in a year representing a seventh successive week of net buying.
However, the data underlined a marked disparity in funds’ betting on grains and on New York-traded soft commodities.
In grains, including the soybean complex, hedge funds lifted their net long to a 21-month high of 524,853 contracts, proving net buyers for an eighth successive week, and matching the longest shift in 11 years.
The buying provoked ideas that grains may be primed for price falls, with hedge funds having fulfilled much of their appetite for buying, and with long bets looking crowded.
Analysis group, Agritel, said the funds are now long for all products, with Chicago wheat a leaving room for technical corrections on profit taking.