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Reply #46: Speculators Reduce Bullish Holdings to Lowest Since July 2009: Commodities [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-30-11 08:57 AM
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46. Speculators Reduce Bullish Holdings to Lowest Since July 2009: Commodities

Speculators decreased wagers on rising commodity prices to the lowest since July 2009 amid concern that Europes inability to contain its debt crisis will crimp demand for raw materials as global growth slows. Money managers cut combined net-long positions across 18 U.S. futures and options by 25 percent to 562,508 contracts in the week ended Nov. 22, Commodity Futures Trading Commission data show. Thats the biggest decline in eight weeks and the lowest since July 14, 2009. Corn wagers tumbled 25 percent, the most since June 2010, and bets on lower copper prices doubled. About $4.6 trillion was wiped from the value of global equities this month. Moodys Investors Service said yesterday the rapid escalation of Europes crisis threatens all of the regions sovereign ratings. The Organization for Economic Cooperation and Development yesterday said growing doubts about the survival of the regions monetary union represents the main risk to the world economy. The events in Europe have cast doubt on global economic growth, said Walter Bucky Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. People are moving out of riskier assets. Seventeen of the 24 commodities tracked by the GSCI have dropped in November. The index is still up 0.9 percent this month. Crude oil jumped 7.1 percent, leading gainers that included hogs, feeder cattle, live cattle and coffee.

Goldman Sachs Group Inc. trimmed its forecast for commodity gains in the next 12 months to 15 percent from 20 percent in a report Nov. 14. The bank has a neutral recommendation on commodities for the next three to six months, and overweight in 12 months...

Open interest, or the number of contracts that have yet to be closed, liquidated or delivered, for commodities tracked by the GSCI has tumbled 16 percent since reaching 8.848 million contracts in February, the highest since the data began in February 2006. The figure includes 18 U.S. commodities of the 24 raw materials tracked by the gauge and is based on CFTC data...Investors put $615 million into commodity funds in the week ended Nov. 23, according to data from Cambridge, Massachusetts- based EPFR Global, which tracks money flows. Gold and precious- metals inflows contributed $1.26 billion, and non-gold and non- precious metal commodities had net outflows of $645 million, said Cameron Brandt, the director of research. Gold is a good investment to make when there are fears of a breakdown in the European Union, Brandt said. Funds trimmed their net-long position in gold for the first time in five weeks, cutting by 13 percent to 149,256 contracts, the government data show. The wagers are still up 15 percent since the end of September.

A measure of 11 U.S. farm goods showed speculators lowered bullish bets in agricultural commodities by 34 percent to 261,477, the lowest since September 2009. Investors turned bearish on soybeans for the first time since July 2010 and hold a net-short position of 8,622 contracts. Net-long positions in corn dropped by 48,543 to 149,084 contracts....People are inherently short to neutral on the commodities market, DoubleLines Sherman said. It could change, but for that we need a very strong fundamental reason out of Europe.
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