Hedge funds have a net long position on wheat for the first time in nearly four years, with long positions reaching a six-year high.

Hedge funds have switched to a net long position in wheat for the first time in nearly four years, betting on higher prices due to drought conditions in the United States and fertilizer and fuel shortages caused by conflicts in the Middle East. According to weekly data released by the US Commodity Futures Trading Commission on Friday, as of the week ending March 31, Chicago wheat futures long positions exceeded short positions by 8,641 contracts, reversing a net short position that had been in place since June 2022. This shift was mainly driven by a surge in long positions. According to CFTC data, long positions rose to 117,375 contracts, the highest level in over six years, while short positions fell to 108,734 contracts. The conflict between the United States and Israel with Iran has entered its sixth week, leading to severe damage to energy infrastructure in the Middle East, disrupting the transportation of fuel and fertilizer through the Strait of Hormuz.