A measure of speculative positions across 11 agricultural products jumped 19 percent to 236,184 contracts, a fourth consecutive gain. Wagers on a corn rally jumped 35 percent to 61,632 futures and options. Investors boosted their net-short holding in wheat to 10,444, from 5,779 a week earlier.
The S&P GSCI Agriculture Index of eight commodities fell 1.7 percent last week, the third drop in four weeks. The gauge fell 5.5 percent this year. Global farmers will harvest the biggest grain and soybean crops ever, boosting food reserves, the U.S. government said May 10. U.S. corn inventories will double as farms recover from the worst drought since the 1930s.
“The decline in the commodity market that we’ve seen in the last several years coincides with inflation risk really being low,” said Nelson Louie, the global head of commodities at New York-based Credit Suisse Asset Management, who helps manage $10.9 billion. “Over the last several years, investors have gone into gold as market risk has become more elevated, but more recently as some of these issues have subsided, there’s been an unwinding of that trade.”