As we have highlighted over the past week, one of the best performing asset classes in trecent days has been rice. And judging by the just released CFTC Commitment of Trader data, the speculators are waking up to the possibility that rice has along way to go higher. The Non-Commercial Net Speculative positions in Rough Rice (per CBOT), have jumped to 5,811 in the week ending February 1, and are now the highest they have been in over a year. They are also double where they were less than 4 weeks ago. Of course, with increasingly more popular speculative positions, the concern that profit taking rallies will appear should be widely anticipated. We expect at least one-two broad selloffs in rice in the coming days, following which distribution the path for continued moves higher in the grain should be wide open.
Other CFTC data indicated that bullish sentiment in other grain and soft food commodities continues to rise:
In Treasurys, specs continue to expect aggressive steepening in the 2s10s region, as both 2 and 5 year net non-commercial contracts have jumped to near-highs, while the 10 Year specs continue selling off, and as now back to August levels.
Lastly, and possibly most importantly, net long bets in the US Dollar just hit another multi year low, just as both the EUR and GBP appear poised to take out prior mega-bullish positions. We continue to expect this trend to revert and major profit taking in the EUR complex, coupled with a short-covering technical push in the USD, to bring the EURUSD much lower (all this completely independent of fundamentals which keep getting worse for all currencies involved).