Tuesday, 22 July 2014
Last updated 29 min ago
Oct 17 2011 | 9:04am ET
Money managers are betting on higher commodity prices for the first time in five weeks.
Data from the Commodity Futures Trading Commission shows speculators’ combined net-long positions across 18 U.S. futures and options rose 0.2% to 656,691 contracts for the week ending October 11.
The Standard & Poor's GSCI Index of 24 commodities rose 5.2% last week, its biggest jump since December.
According to Bloomberg, hedge funds had cut their bets by 49% in the previous four weeks.
Of the 24 futures tracked by the S&P GSCI, 21 rose last week, including sugar (up 11%), soybeans, crude oil (which reached a three-week high) and cattle futures. Cotton, nickel and aluminum fell.
Speculators showed themselves most bullish on energy last week, with a 39% gain in heating oil, a 23% gain in gasoline and a 7.8% gain in crude oil, according to the CFTC. Funds continued their love affair with gold, boosting their bets by 3.4% and upping those on silver 1.3%.
On the other hand, speculators dialed back their bets on corn, soybeans and coffee, despite rising prices for those crops and bearish bets on copper were up 80% from a week earlier, leaving investors with a net-short position of 9,489 contracts.
Investors redeemed $275 million from commodity funds in the week ended Oct. 12, the lowest amount in three weeks, according to Cambridge, Massachusetts-based EPFR Global, while funds focusing on gold and precious metals attracted $72 million.
Cameron Brandt, research director at EPFR, told Bloomberg the outflow was “a fairly small one, which sort of suggests a slowing down while people wait to see if this latest burst of optimism has any legs.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…