Speculators swap bearish bets to sugar, from wheat

Speculators turned more bearish on sugar prices in Europe, but trimmed pessimism over wheat, mirroring sentiment evident in positioning on US-traded agricultural commodities.

Speculators switched from a net long of 619 lots in London-traded white sugar, as of December 20, to a net short position of 78 on December 28 - meaning they held more bets that profit when prices fall than gain when values rise.

The data, released by exchange operator NYSE Liffe, echoed a more downbeat stance held by speculators in New York raw sugar.

While they retained a net long position in New York sugar as of December 27, they had cut it by nearly 2,000 lots over the week to 43,792 contracts, data from the US Commodity Futures Trading Commission showed.

The sell-downs came amid a decline in sentiment towards sugar values, amid ideas of European, Russian and India supplies coming onstream to resolve a longstanding market deficit, although prices showed a small rebound during the week.

Grain reaction 

In London-traded feed wheat, speculators trimmed their net short position by 43 lots to 11 lots during the week, NYSE Liffe said.

Speculators' net long position in London crops and (previous week)

Cocoa: 1,547 lots, (765 lots)

Feed wheat: -11 lots, (-54 lots)

White sugar: -78 lots, (619 lots)

Robusta coffee: -9,860 lots, (-8,534 lots)

Source: NYSE Liffe. Data for December 28, and (December 20)

This, again, mirrored a trend seen in the US, where speculators cut their net short position in Chicago wheat, the world benchmark, by 12,636 lots to less than 30,000 lots, the CFTC data, released late on Friday, showed.

The change reflected a boost to bulls provided by dry weather in southern South America, which has cut hopes for production of corn, wheat's fellow grain, besides soybeans.

In Chicago corn, managed money, a proxy for speculators, increased its net long position by more than 22,000 to a four week high.

'Bullish impetus'

Chicago soybeans witnessed an increase of more than 21,000 lots, to 23,683 contracts, in speculators' net long position.

Speculators' net long position in US-traded crops and (previous week)

Chicago corn: 148,653 lots, (122,461 lots)

New York raw sugar: 43,792 lots, (45,764 lots)

Chicago soybeans: 23,683 lots, (2,575 lots) 

Chicago wheat: -29,252 lots, (-41,888 lots)

Source: CFTC. Data for December 27, and (December 20)

This revival came on "the back of both general strength in agri-commodities as well as South American weather concerns giving the market bullish impetus", Rabobank said on Tuesday.

Overall, managed money increased its net long position in agricultural commodities by 75,137 contracts to 293,566 contracts, an increase from a two-year low the previous week, on Rabobank calculations

"As funds' appetite for risk increased and they entered back into the market in preparation for the coming year," the bank said.

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