Hedge Funds Wheat

Hedge Funds Wheat

Hedge Funds Add Bullish Bets on Wheat Amid Shortage

Hedge funds are raising bullish wheat bets to a high not seen since 2007. As global supplies of wheat are dwindling and there are concerns that food inflation will increase in the coming months.  Extreme weather is one of the main causes of lower supplies, with floods in Australia and Canada and a drought in Russia.
Hedge funds increased their bullish bets on wheat to the highest in more than three years amid shrinking global supplies and mounting concern that food inflation will accelerate.

In the week ended Feb. 8 on the Chicago Board of Trade, the funds and money managers increased net-long positions, or wagers on rising prices, by 19 percent to 51,787 contracts, the highest since August 2007, government data showed on Feb. 11. On Feb. 9, wheat prices reached a 29-month peak of $8.9325 a bushel.

Last week, the U.S. Department of Agriculture lowered its forecast for global inventories. Futures have jumped 77 percent in the past year after drought slashed crops in Russia and floods in Canada and Australia reduced output. Surging food costs have triggered riots in North Africa and the Middle East. Egypt’s Hosni Mubarak ceded power on Feb. 11.

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