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Markets

Fund Activity in 2010

At the start of 2010 the various investment funds held overall long (bought) positions in both CBOT maize and CBOT soyabeans.  Holding a long position is generally a tactic used to make money when prices are rising and expected to carry on rising.  As the price fell in response to bearish fundamentals (see this week's market report), the funds began selling the contracts they held in order to minimise their losses. 

As at the 5th January 2010, the investment funds held a net +25.6% of open interest in CBOT maize and a net +20.7% of open interest in soyabeans.  However, by last week 26th January, the funds had reduced their long positions to hold a net +12.1% of open interest in CBOT maize and a net +8.6% of open interest in CBOT soyabeans.

For CBOT wheat the situation was slightly different, the funds held an overall short (sold) position for the majority of 2009 and this continued into 2010.  At the start of 2010 (5th January), the funds held a net - 5.7% of open interest.  However, over the past three weeks the further increased their short position to hold a net -12.1% of open interest as at 26th January.

N.B.  Open interest is the measure of activity in the market as it refers to contracts not yet closed out or reached delivery month.  A positive net percentage of open interest represents an overall long (bought) position and a negative net percentage of open interest shows an overall short (sold) position.