Commodities Hedge Funds
Hedge Funds Continue Retreat from Commodities
Hedge funds have been reducing bullish bets on commodities for going on three months, according to data from the Commodities Futures Trading Commission. Hedge funds are in the midst of the longest retreat for the sector since the financial crisis, suggesting fears over a global recession brought on by Europe's debt woes and sluggish U.S. economic growth.
Money managers reduced net-long positions across 18 U.S. futures and options by 8.1 percent to 620,715 contracts in the week ended May 29, extending the monthly decline to 26 percent, Commodity Futures Trading Commission data show. Speculators are now the most bearish since the start of year on copper, oil, heating oil, corn, gold and silver. The Standard & Poor’s GSCI Spot Index of 24 raw materials slumped 13 percent in May.
The euro fell to a 23-month low against the dollar June 1 after the European Central Bank rejected a plan to recapitalize Bankia group, Spain’s third-largest lender. The region’s manufacturing fell to a three-year low, and unemployment reached a record 11 percent, reports showed. Europe accounts for 18 percent of copper and wheat demand.
The U.S., the world’s biggest oil and natural-gas consumer, said last week that employers added the fewest workers in a year in May.
“Commodities are continuing to take a beating in light of global macro uncertainties,” said Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel Nicolaus & Co., which oversees more than $115 billion. Europe has “thrown a wet blanket on speculators’ desire to hold risk,” he said. Source
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