AIRLINK 187.70 Decreased By ▼ -8.95 (-4.55%)
BOP 10.12 Decreased By ▼ -0.02 (-0.2%)
CNERGY 6.52 Decreased By ▼ -0.17 (-2.54%)
FCCL 33.60 Increased By ▲ 0.58 (1.76%)
FFL 16.55 Decreased By ▼ -0.10 (-0.6%)
FLYNG 23.80 Increased By ▲ 1.35 (6.01%)
HUBC 125.40 Decreased By ▼ -1.89 (-1.48%)
HUMNL 13.84 Decreased By ▼ -0.06 (-0.43%)
KEL 4.80 Increased By ▲ 0.04 (0.84%)
KOSM 6.52 Increased By ▲ 0.15 (2.35%)
MLCF 42.88 Increased By ▲ 0.66 (1.56%)
OGDC 211.70 Decreased By ▼ -1.33 (-0.62%)
PACE 7.37 Increased By ▲ 0.36 (5.14%)
PAEL 41.40 Increased By ▲ 0.53 (1.3%)
PIAHCLA 17.35 Increased By ▲ 0.53 (3.15%)
PIBTL 8.39 Increased By ▲ 0.10 (1.21%)
POWER 9.00 Increased By ▲ 0.18 (2.04%)
PPL 183.61 Increased By ▲ 0.04 (0.02%)
PRL 37.50 Decreased By ▼ -0.77 (-2.01%)
PTC 23.99 Decreased By ▼ -0.08 (-0.33%)
SEARL 94.20 Decreased By ▼ -0.91 (-0.96%)
SILK 1.00 No Change ▼ 0.00 (0%)
SSGC 39.45 Decreased By ▼ -0.86 (-2.13%)
SYM 17.90 Decreased By ▼ -0.31 (-1.7%)
TELE 8.67 Decreased By ▼ -0.06 (-0.69%)
TPLP 12.45 Increased By ▲ 0.24 (1.97%)
TRG 63.00 Decreased By ▼ -1.36 (-2.11%)
WAVESAPP 10.45 Increased By ▲ 0.01 (0.1%)
WTL 1.77 Decreased By ▼ -0.02 (-1.12%)
YOUW 3.97 Decreased By ▼ -0.03 (-0.75%)
BR100 11,699 Decreased By -24.2 (-0.21%)
BR30 35,250 Decreased By -109.4 (-0.31%)
KSE100 112,752 Increased By 113.8 (0.1%)
KSE30 35,469 Increased By 10.7 (0.03%)

Commercial soya processors may have been hit hardest by the recent surge in soyameal prices, but non-commercials or large speculators may suffer the most if there is a sudden and protracted setback, judging by the latest assessment of trader positioning.
According to the Commitments of Traders report released by the Commodity Futures Trading Commission, commercial traders had been sitting on record short exposure to the soyameal market in recent weeks as they anticipated a swell in soyabean supplies from the ongoing record-large US harvest would generate a steep rise in fresh meal production.
Yet harvest delays coupled with limited rail space for meal shipments caught meal suppliers in a bind, and forced a scramble for spot supplies that drove meal prices more than 20 percent higher during the month of October. But commercial traders were not the only buyers. Non-commercials also joined the fray, and boosted their own long exposure to the market from around 103,000 contracts at the start of the month to a record 118,274 contracts as of the last reporting date in October.
This allowed fast-money traders to participate in the steep meal market rally, and put them in a good position to profit from any additional meal price surges in the weeks ahead. But this record-large long position also leaves speculators vulnerable to any sudden reversals in meal market momentum, which remains the scenario most favoured by the commercial contingent, judging by the continuing climb in commercial short-sided futures exposure.
Should the commercial community be proved wrong in their expectations for an imminent rise in meal production and an improvement in the flow of supplies, then another round of spot market panic will likely ensue that should reward long-biased speculators handsomely.

Copyright Reuters, 2014

Comments

Comments are closed.