Soybean market sees significantly weaker speculative activities in U.S.

Market speculators still held a net short position of soybean futures this week amid trade uncertainties between the United States and China, but the speculative activities significantly weakened, according to a report released Friday.

For the week ending Tuesday, the non-commercial investors, commonly treated as market speculators, held a net short position of 9,796 soybean future contracts. The figure was significantly lower than last week's 46,627 contracts, said the report from the U.S. Commodity Futures Trading Commission.

Meanwhile, the commercial traders that were commonly treated as hedgers still held a net long position of 18,033 contracts.

Speculators and hedgers are different types of investors. Speculators try to make a profit from the 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" some kind of financial asset like currencies or commodities, they hold a bearish view on the asset and believe that its price will decrease.

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.

(CGTN)