The output of agricultural products reached a record and funds were evacuated on a large scale

With record agricultural production and improved prospects for meat supply, US agricultural futures prices plummeted, bringing an abrupt end to the flood of money into US agricultural futures.

The data showed that in the first five months of this year, inflows into agricultural markets far exceeded those in precious metals and crude oil markets, and then the situation took a sharp turn for the worse, with a net outflow of $57.7 million from the agricultural exchange listed products (ETP) market by the end of August, down 2.9 per cent. Over the same period, there was a net inflow of capital from energy, precious metals and industrial metals, increasing the scale of investment in the entire raw materials market by 341 million US dollars, or 0.5 per cent.

From the perspective of the international futures market, coffee, live cattle and pork futures have become the stars in the commodity futures market so far this year, while cotton, soybeans, corn and wheat have recently fallen into a bear market. Since April, the speculative position on bullish agricultural products has plummeted by 78%, as American agricultural products will have a bumper harvest this year and production will hit a record. Data show that global food costs have fallen for four months in a row.

Agricultural analysts say this year will be a bumper harvest for US agricultural products, and there is growing evidence to confirm this, and there should be no surprises.

The most recent rise in the agricultural market was at the end of April, when rain delayed the planting of crops, fuelling a rise in agricultural prices and a net inflow of $45.8 million into products listed on the US agricultural exchange. The precious metals exchange-listed fund (ETF) has a net outflow of $380 million, an outflow of $12.7 million from the energy market and an inflow of $48.6 million from the industrial product market.

Favorable weather after April will lead to a record corn harvest of 14.032 billion bushels in the United States this year, and soybean production is expected to reach 3.816 billion bushels, according to the USDA. The U.S. Department of Agriculture said last week that crop growth conditions in the United States this year were the best in at least 20 years. CBOT corn and soyabean futures recently hit four-year lows, down more than 30 per cent since this year's highs.

Expectations of a decline in feed prices have also limited increases in the futures prices of live cattle and pork. Although livestock prices are rising, there has been a net outflow of funds from the linked ETP products. According to statistics, by the end of August, the net outflow of funds reached 10.2 million US dollars, while at the end of May, the variety had a net inflow of 3.2 million US dollars.

In early August, net long positions held by money fund managers in 11 agricultural futures and options contracts soared to 1.1 million positions, the highest since 2010, according to the Commodity Futures Trading Commission. Most of their long orders have been cut, leaving only 248300 hands. Speculators are also bearish on the market prospects for soybeans, cotton and white sugar.

The international agricultural index has fallen 21% since the beginning of may, while the commodity index, including 22 raw materials, is down 9.1%, while the MSCI world index is up 4.1% and the Bloomberg treasury bond index is up 2.1%.

While the futures prices of most agricultural products fell, some metal prices rose. Copper futures rose for four months and aluminium prices rose 17 per cent as inventories fell to their lowest level since 2008. Geopolitical tensions also pushed gold futures up 5.2 per cent to around $1265. ETF positions in precious metals have rebounded since May, with net inflows of $123 million as of August 29. Industrial metals ETF has a net inflow of $105 million, while energy funds have a net inflow of $25.3 million.