Amid the atmosphere of strong demand for U.S. wheat exports and the decrease in sugar output from Brazil, hedge funds took their positioning in agricultural commodities to its highest in ten months. The shift in attitude is largest due to changes in the forecasts concerning the global sugar sector. Demand seems to be stronger than initially thought, prompting many to cut in half their forecasts for global sugar surplus to 2 million to 3 million tons. The recent fire in Brazil’s Santos port which destroyed tons of sugar and sugar terminals has also shifted projections for the industry. Wheat is also being viewed more positively with weather damage in Argentina, Brazil, China and Russia. Cattle futures are also at a 19 month high based on concerns of short supply and Cargill’s recent announcement that it is banning all Zilmax-fed cattle from its supply chain.
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