Funds increased bullish bets on agricultural commodities by the most in more than a year on signs of tightening supplies amid adverse weather conditions.
In the week ended Aug. 30, speculators raised their net- long positions in 11 commodities by 18 percent to 915,341 futures and options contracts, government data compiled by Bloomberg show. That was the biggest gain since Aug. 3, 2010. Holdings in wheat more than tripled, bullish corn bets reached an 11-week high, and soybean positions jumped to the highest since November 2010. Corn prices have jumped 70 percent in the past year and soybeans have gained 43 percent. The hottest July since 1955 means that U.S. production of both crops may miss government estimates, according to researcher and broker INTL FCStone Inc. The costliest drought in Texas history has hampered U.S. supplies of cotton, while dry weather in the U.S. Great Plains may curb planting of winter wheat. “You still have some pretty explosive supply and demand situations” for U.S. crops, said James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania. “There was a liquidation that went on because of the financial panic, and now some people are waking up and saying things are still pretty extreme in terms of the risks if there are supply disruptions.” http://www.bloomberg.com/news/2011-09-04/funds-increase-bullish-agriculture-bets-on-explosive-supply-constraints.html '+'
