commodity investing 101

commodity investing 101

January 3rd, 2017

Hedge funds approached the end of 2016 on a bearish note in agricultural commodities, cutting bets on price rises for a fourth successive week, as they stretched to a record a selling spree in softs such as cocoa and coffee.

Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 37,457 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

The selldown reduced the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – to the lowest in two months.

And it included bearish positioning in both grains, in which hedge funds returned to a net short position, as well as in New York-traded soft commodities, which also include cotton and sugar.

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commodity investing 101

commodity investing 101

November 21st, 2016

Hedge funds turned bearish on agricultural commodities at the fastest rate in nine months, provoking hopes in grains that selling pressure may be spent for now – but spurring worries in sugar of “much lower” prices.

Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 151,096 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

That represented the biggest reduction since February in the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall.

And it came in a week in which ag bulls suffered two notable blow – the first from the rise in the dollar, following the election of Donald Trump as US president, and the second from larger-than-expected official estimates for US corn and soybean crops.

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St Elmo Steak House

St Elmo Steak House

May 23rd, 2016

Commodity hedge funds raised bets on rising agricultural commodity prices to the highest in nearly two years, provoking concerns of a sell-off in the off – particularly in sugar, in which bullish betting hit a record high.

Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by nearly 65,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

The buying took the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – nearly to 680,000 contracts, the highest since June 2014, and supporting talk around in the market of funds moving cash into ags.

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commodity investing 101

commodity investing 101

October 5th, 2015

Commodity investing funds undertook a sharp wave of short-covering as pessimism over agricultural commodity prices waned, particularly in sugar, in which they turned more positive on prospects at the fastest pace in 15 months.

Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to cotton, by 100,285 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

The shift took the net long – the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – to 125,025 contracts.

And it was fuelled by a cut in short positions, of more than 90,000 lots, amid recovering markets for many agricultural commodities, with only cattle and cocoa among main contracts showing losses during the week.

The closure of short positions was evident in a cut to 1.38m lots, from 1.42m contracts, in speculators’ open interest – the total number of live contracts they hold.

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commodity investing 101

commodity investing 101

August 5th, 2015

Commodity hedge funds, having been bloodied by buying grains as the market tumbled, followed up with widespread selling in ags, turning more bearish on soft commodities and livestock as well as the likes of corn and wheat.

Managed money, a proxy for speculators, slashed its net long position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by nearly 135,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.

The cut in the net long – the extent to which long positions, which profit when values rise, exceed short bets, which benefit when prices fall – was the second largest over the past two years.

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Commodity Futures Sink To 12-Year Low

On January 14, 2015, in Commodity Futures News Report, by Infinity Trading
commodity futures

commodity futures

January 14th, 2015

Commodity futures slumped to a 12-year low, led by the biggest plunge in copper since 2011, after a report from the World Bank fanned concerns of a global economic slowdown.

Copper tumbled 5.7 percent to $5,526 a metric ton on the London Metal Exchange as of 12:29 p.m., set for a sixth day of losses. Nickel, zinc and silver erased more than 2 percent. Oil reversed earlier declines, with West Texas Intermediate trading little changed at $45.93 a barrel. The Bloomberg Commodity Index of 22 energy, agriculture and metal products slid 0.8 percent to 100.45, the lowest since 2002.

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ICE Futures U.S. news

ICE Futures U.S. news

December 3rd, 2014

Intercontinental Exchange Inc. ICE Futures  will start its first five futures contracts to be listed and cleared in Singapore next year, including products on the Chinese currency, Brent crude and gold.

A mini contract on the European energy benchmark as well as products on the yuan, Chinese cotton and sugar will be cash-settled, while a one-kilogram gold contract will be physically settled, Atlanta-based ICE said. Trade will start on March 17, subject to regulatory approval from the Monetary Authority of Singapore, it said in a statement today.

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commodity brokers

commodity brokers

October 27th, 2014

Commodities slumped to a five-year low led by agriculture items produced by Brazil on speculation a slump in the country’s currency will fuel exports.

The Bloomberg Commodity Index dropped 0.6 percent at 11:03 a.m. in London after falling to the lowest since July 2009. Raw sugar futures fell 2.3 percent and arabica coffee declined 1.4 percent. Brazil is the biggest producer of both commodities.

Brazil President Dilma Rousseff’s re-election damped speculation for a change in policies, sending the real down 3.2 percent today, the biggest decline since 2011. The real weakened 33 percent against the dollar since Rousseff took office in January 2011. Declines in the Brazilian currency tend to encourage export sales of products traded in dollars.

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commodity brokers

commodity brokers

October 20th, 2014

Commodity Investing – Plunging oil prices spurred hedge funds to cut bullish wagers by the most in six weeks, losing confidence in the willingness of producers to constrict supply.

Money managers cut net-long positions in West Texas Intermediate by 8.1 percent in the week ended Oct. 14. Short positions jumped to the highest level in 22 months, U.S. Commodity Futures Trading Commission data show.

WTI tumbled 8.8 percent this month as U.S. production expanded to a 29-year high. That added to signs of a global supply glut just as the International Energy Agency cut its forecast for demand growth. Crude is now trading in a bear market, underpinned by speculation that OPEC members are favoring market share over prices.

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futures brokers

futures brokers

September 29th, 2014

Intercontinental Exchange Inc. (ICE) eliminated the Liffe name and incorporated cocoa, robusta coffee, white sugar and feed wheat futures and options into ICE Futures Europe, owner of the Brent crude contract.

ICE, based in Atlanta, has the dominant position in the softs markets, also owning ICE Futures U.S. in New York where arabica coffee, cocoa and raw sugar trade. ICE Futures Europe now has the biggest share of the cocoa market with 259,410 futures outstanding today compared with 209,687 contracts on ICE Futures U.S., according to data compiled by Bloomberg. ICE’s Brent oil futures have 1.4 million contracts outstanding.

“All softs contracts are now under one roof,” said Michael McDougall, a senior vice president in New York at Societe Generale SA’s Newedge Group, a member of both ICE Europe and ICE Futures U.S. “It seems to be the general trend with futures exchanges that we’re seeing a concentration. That means less competition. Whether it’s a good or bad thing, time will tell.”

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