Hedge funds and index funds, looking to diversify their positions in agricultural commodities, helped push record open interest in corn futures at Chicago Board of Trade (CBoT) in February.
CBoT corn open interest stood at 1.06m contracts on 22 February, just shy of its record set on 10 February, and leading long-time followers to speculate that hedge funds and commodity index funds were taking larger, long-term positions in the ag sector.
A report from brokers ADM suggested that in agricultural products, "fundamentals will take a back seat to the driving force of the funds?. The evidence of this can be plainly seen in the open interest for corn."
It added that...