Hedge Funds Up Bets On Commodities

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.”


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.