Speculations turn bearish on corn

Large speculators took a net short position in Chicago Board of Trade corn for the first time in nearly two years, betting that early planting would lead to a huge crop this fall, regulatory data showed on Friday. Their move came a day before corn began a three-day rally that pushed prices up 5.3 percent due to rising concerns about hot and dry weather harming the crop in the Midwestern Corn Belt.
Speculators also raised their net short position in CBOT wheat and cut their bullish bet on soyabeans to a three-month low. The Commodities Futures Trading Commission's weekly commitments of traders report showed that non-commercial traders, a category that includes hedge funds, were net short 6,382 corn contracts after cutting 3,401 longs and adding 18,559 shorts to their position in the five trading days ended June 5.
It was the non-commercial trader's first net short position in corn since the week ended June 29, 2010, when they were net short 39,246 contracts in the commodity. "There are a lot of people that believe we are going to have a lot of corn this fall," said Bill Gentry, a broker with Risk Management Commodities in Lafayette Indiana. In 2010, non-commercials were only net short for one week before switching back to a long position and the current bearish bet may be short lived if soils in key growing areas of the Midwest remain dry, analysts said. The next two weeks will be critical as much of the corn crop was maturing earlier than usual due to the early planting. Final yields could be determined as the weather heats up.
Wheat prices dropped 6.6 percent in the week ended June 5. Soyabeans were 3 percent lower and corn futures were down 1.8 percent during the same time period. In soyabeans, the non-commercial traders dumped 24,212 longs and added 3,382 shorts, leaving them net long 141,838 contracts. It was their smallest net long in soyabeans since March 6, when they were net long 131,613 soya contracts.
Speculators have dialled back their bullish bet on soyabeans for five straight weeks after bidding it to a record high by early May. In CBOT wheat, non-commercial traders added 19,511 short positions and 839 longs, leaving them net short 51,671 contracts.