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Market speculators switch to net long position of soybean futures

2019-09-28 12:55

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WASHINGTON, Sept. 27 (Xinhua) -- Market speculators switched to a net long position of soybean futures this week, according to a report from the U.S. Commodity Futures Trading Commission on Friday.

For the week ending Tuesday, non-commercial investors, commonly treated as market speculators, held a net long position of 1,235 soybean futures contracts.

As trade tensions between the United States and China saw a possibility of easing, speculators have switched to a net long position in the past week.

Meanwhile, commercial traders who are commonly treated as hedgers also held a net long position of 5,253 contracts.

Speculators and hedgers are different types of investors. Speculators try to make a profit from the assets' price volatility, whereas hedgers attempt to reduce or "hedge" the amount of risk created by price volatility during the holding period of the assets.

When investors "short" some kind of financial asset like currencies or commodities, they hold a bearish view on the asset and believe that its price will decrease.

The soybean futures, traded at the Chicago Board of Trade, are derivative financial contracts that obligate the parties to transact an underlying asset at a predetermined future date and price. The underlying asset of each contract includes 5,000 bushels of soybeans.
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