(Agrimoney) – Grain investors were wrong footed in the run up to the Wasde report, but softs traders got in ahead of a bull run in coffee and sugar.
Data from the US Commodity Futures Trading Commission regulator showed that in the week to last Tuesday, grains investors turned bullish in a rash of short covering.
But Friday’s Wasde report from the US Department of Agriculture, surprised investors with some bearish news for corn and wheat, leaving speculators out of pocket.
Bullish moves
The CFTC data showed managed money, a proxy for speculators, slashing its short-sold positions grains, taking up the largest net-long position for 5 weeks.
Investors increased their net long position in corn by 50,316 lots, the fastest since July 2015, to their largest net long since August of this year.
And a rash of short covering in wheat, the largest since June of this year, increased the size of the overall net long on that commodity to its highest level since August.
Bearish data
But the Friday’s Wasde release proved negative for corn and wheat, promising ample global stocks.
Between Tuesday and Friday’s post-Wasde close, December Chicago wheat futures fell by 3.2%, while December corn fell by 2.5%, leaving grain speculators out of pocket.
Investors increased slashed their net short in soybeans as well, albeit at a slower rate than the previous week, with bearish bets on the oilseed now at their lowest level since the start of September.
And althought the Wasde data proved mildly bullish for soybeans on the day, between Tuesday and Friday, the November contract for soybeans still ended up slightly down.
Short covering in softs
But investors got in ahead of a bull run on sugar and arabica coffee.
Hedge funds have turned bullish on sugar at the fastest rate in over a year.
Investors engaged in a rash of short covering over the week to October 6, pushing their net positive position to 88,009, the largest since last summer.
Investor’s net positive position increased by 54,644 lots, the biggest one-week bull run since July 2014.
Currency bounce
And investors slashed their negative bets on arabica coffee as well.
The managed money net short in coffee fell by 6,689 lots, the fastest positive swing since August.
Arabica coffee and sugar are benefiting from a bounce in the currency of Brazil, the world’s biggest exporter of both those commodities.
December arabica futures rallied 2.7% between Tuesday and the end of the week, while raw sugar futures for March 2016 rose by 5.2% over the same period.
