Hedge funds have shifted to a net long position in wheat for the first time in nearly four years, reflecting growing confidence in higher prices amid geopolitical tensions and adverse weather conditions, according to a report by Bloomberg.
The report cites data from the US Commodity Futures Trading Commission (CFTC) for the week ending 31 March as showing that bullish positions in Chicago wheat futures exceeded bearish bets by 8,641 contracts. This marks a reversal from a sustained net-short stance that had been in place since mid-2022.
The change in sentiment was largely driven by a sharp increase in long positions, which climbed to 117,375 contracts—the highest level in over six years. At the same time, short positions declined to 108,734 contracts.
Market participants are increasingly focused on supply-side risks. Ongoing conflict in the Middle East, particularly involving Iran, has disrupted key energy infrastructure and constrained the movement of fuel and fertiliser through the Strait of Hormuz, a critical artery for global trade.
These disruptions are prompting farmers worldwide to secure essential inputs more aggressively, while some are adjusting crop choices to reduce reliance on fertilisers. Concerns over food security have intensified as a result, shifting sentiment in agricultural markets that had previously been weighed down by strong supply levels.
Wheat prices responded by climbing to a one-year high in March before easing slightly.
In addition, dry conditions across the US Plains have raised concerns about crop yields in one of the country’s most important wheat-producing regions.
