18.08.201402:59:00UTC+00Hedge funds bet on longest bear run for soybeans

Soybeans have entered the longest bear run since 2006 with the help of hedge funds betting that better crop conditions will lead to a record harvest in the US, the largest grower of the crop.

Over the past five weeks, funds managers have been taking bearish positions to mark the most in eight years. Data from the US Commodity Futures Trading Commission shows that net bearish positions hit 11,704 in futures and options during the week that ended on August 12th compared to 14,613 from the previous week.

Futures for the commodity crop with a delivery date in November on the Chicago market declined by 3% last week, the largest drop in more than a month. It traded noontime in Singapore at a price per bushel of $10.5175.

On August 12th, the US Department of Agriculture increased its forecast for the domestic crop of soybeans from last month’s prediction of 3.8 billion bushels to 3.816 billion.  Government officials say that sufficient rain and cool weather are providing ideal conditions for crop growth that could push yields up to 45.4 bushels per acre. Production levels are seen to improve by 16% which will result in stockpiles reaching 430 million bushels..

Senior investment strategist Rob Haworth says that, “We’re going to need weather to turn and some other sort of problem for investors to get interested again, and for the price trend to change.” Prices for soybeans have fallen by 19% so far in 2014 to post the second largest drop among the 22 raw materials monitored by the Bloomberg Commodity Index.

Domestic corn production is forecast to rise to 14.032 billion bushels to mark the US’ second consecutive record harvest. Yields for corn is expected to be at 167.4 bushels per acre.