U.S. corn stockpiles at the start of last month were the biggest in 28 years, adding to signs of a glut that’s driven global food costs to the lowest since 2010. Hedge funds have been net-short on agriculture from cotton to wheat for three weeks, the longest since the government data started in 2006.
American farmers reaped record corn harvests for two straight seasons, filling stores and sending prices tumbling more than 20 percent in the past year. Global soybean production reached an all-time high, and the U.S. government expects domestic growers will plant the most acres ever this spring. Inventories of wheat and sugar also surged.
“The real negative remains supply, and that’s the case with all the grains,” Paul Christopher, the St. Louis-based co- head of real-asset strategy for the Wells Fargo Investment Institute, which oversees $1.6 trillion, said in an April 2 phone interview. “The only real hope is for some global cuts in production. I wouldn’t be buying corn here.”
Combined positions across 11 agricultural products was a net-bearish holding of 94,714 contracts as of March 31, U.S. Commodity Futures Trading Commission data published three days later show.