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Hedge Funds Federal Reserve Commodities

Hedge Funds Federal Reserve 

Hedge Funds Cut Commodities Bets Upon Fed Signal

Some hedge funds have gathered from a recent signal that the Federal Reserve may not offer much in the way of economic stimulus that growth will show and consequently demand for raw materials will slow too.  This led hedge funds to pull back commodity bets
Money managers lowered net-long positions across 18 U.S. futures and options by 2.8 percent to 1.1 million contracts in the week ended April 3, data from the Commodity Futures Trading Commission show. Bets on higher corn prices fell to the lowest since February, while those on hogs dropped by the most since May. Speculators cut wagers on costlier crude oil for a third week, and are now the least bullish in two months. 
Minutes from the March 13 Fed policy meeting released April 3 showed policy makers will probably hold off on increasing monetary accommodation unless the U.S. economic expansion falters. The Standard & Poor's GSCI gauge of 24 commodities rose more than 80 percent from December 2008 to June 2011 as the central bank set rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. The U.S. economy will accelerate this quarter and the next, economist estimates compiled by Bloomberg show. 
"The market is addicted to stimulus," said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management who helps oversee $1 billion of assets. "This market has risen because of the liquidity push and the market will decline when it's deprived of liquidity."
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Link to This Resource: Hedge Funds Federal Reserve Commodities

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