COT Report Shows Funds Heavy On Corn Spreads
Feb 03, 2012
This afternoon's COT Report showed managed money heavily invested in corn spreads, with nearly double the positions of both the "swap dealer" and "other reportable" portion. You can see from the chart below that spread trading among the funds has increased two-fold since August, and this week's COT report showed they are adding on new spread positions at an increasing rate.
Intra-commodity spreads, especially the old crop / new crop corn spread seem to be a hot topic right now, so it is not surprising to see this explosion in fund spreading. With this large quantity of managed money spreads in the market, traders should keep in mind what will happen to these spreads when funds "un-wind" their positions.
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THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
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