The volatility in agricultural commodities has disappeared – kind of. Ag commodities are back in their “happy place” of abundance and oversupply, waiting for a weather event. One might expect that the spec funds, aka Managed Money (MM), have left for greener ($) pastures. This is not the case. The data shows they never left. They have however, changed the way they bet.
The change over the last five years has been their propensity to bet on the short side. Take a look at the data – graphs below – the growth in the short side bet is obvious. The graphs show the combined open interest for managed money long and short. The first graph totals all open interest for CME corn, soybeans, soy meal, soy oil, wheat, and KC wheat.