Funds Make Wrong-Way Bets Before Price Slump: Commodities
By Joe Richter - May 28, 2012 1:13 PM ET
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Twenty of the 24 raw materials tracked by S&P dropped last week. Corn tumbled 9 percent, the most in a year, and cocoa slumped 7.2 percent, the biggest loss in 2012. Natural gas fell 3 percent today.
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Export Sales
Slowing growth in China, the world’s biggest pork consumer, is eroding demand for grains used in livestock feed. In the week ended May 17, U.S. corn export-sales for delivery before Aug. 31, 2013, plunged 44 percent from a week earlier, the Department of Agriculture said May 24.
Gold wagers dropped for a third week to 77,318 contracts, extending a slump to the lowest since December 2008. Funds are bearish on copper prices for the first time since January, going to a net-short position of 2,808 contracts as of May 22, from net-long holdings of 4,833 a week earlier.
Nine of 18 analysts surveyed by Bloomberg expect the metal to drop this week and three were neutral. Traders were bearish for a second week, the first consecutive negative outlook since early April.
“There’s been a down shift in demand for a lot of commodities with the concerns over growth in China and Europe,” said Jack Ablin, the Chicago-based chief investment officer of BMO Harris Private Bank, which oversees about $60 billion of assets. “There are generally a lot of headwinds. We’re underweight in commodities and may go to zero.”
To contact the reporter on this story: Joe Richter in New York at jrichter1@bloomberg.net
http://www.bloomberg.com/news/2012-05-27/funds-may-wrong-way-bets-before-price-slump-commodities.html
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