WASHINGTON, Sept. 13 (Xinhua) — Data from U.S. Commodity Futures Trading Commission on Friday showed that market speculators held a net short position of soybean futures this week as trade uncertainties shadowed the outlook of the U.S. soybean industry.
Non-commercial investors, commonly treated as market speculators, held a net short position of 46,627 soybean futures contracts for the week ending Tuesday. Meanwhile, commercial traders that are commonly treated as hedgers still held a net long position of 55,163 contracts.
Speculators and hedgers are different types of investors. Speculators try to make a profit from 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” a financial asset like currencies or commodities, they hold a bearish view on the asset and believe that it will decrease in price.
After the White House imposed new tariffs on Chinese imports, market analysts expected soybean price to face more downward pressure.
The soybean futures, traded at 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.
LINK ORIGINAL: Xinhuanet