WASHINGTON, Dec. 6 (Xinhua) -- Market speculators held net short position of soybean futures in the week ending Dec. 3.
According to a report from U.S. Commodity Futures Trading Commission on Friday, the non-commercial investors, commonly treated as market speculators, held a net short position of 26,143 soybean future contracts for the week.
Meanwhile, the commercial traders that were commonly treated as hedgers held a net long position of 28,263 contracts.
Market speculators had held net long position of soybean futures for several weeks when the U.S. and China were making progress in their trade talks. However, new headlines showed the road to a bilateral trade deal remained bumpy as negotiators from both countries looked for a way to solve disputes.
Speculators and hedgers are different types of investors. Speculators try to make a profit from the assets' price volatility, whereas hedging attempts 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 belief that it will decrease in price. In the opposite, the investors would "long" the financial asset.
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.
