The agriculture market last week severely underestimated U.S. corn production ahead of a highly anticipated government report, but speculators were much lighter sellers of Chicago-traded corn than was predicted amid the dramatic market reaction, reports Reuters.
The U.S. Department of Agriculture on Aug. 12 placed domestic corn production at 13.9 billion bushels, more than 5% greater than the trade was expecting. That was by far the largest miss on either side of the number in August in at least 20 years, potentially ever.
CBOT corn futures plunged the daily limit that same day and followed up with another steep drop the next day.
According to the report at Reuters, in the week ended Aug. 13, hedge funds and other money managers reduced their net long position in CBOT corn futures and options to 44,513 contracts from 79,507 in the previous week, according to data from the U.S. Commodity Futures Trading Commission.
