commodity investing 101

commodity investing 101

June 6th, 2016

Speculators lifted bullish positioning on agricultural commodities to the highest in nearly two years, as algorithmic funds flooded in, into sugar at least, – while coffee and wheat caught out investors making bearish bets.

Managed money, a proxy for speculators, raised by more than 64,000 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator.

The increase took the net long – the extent to which long positions, which benefit when prices rise, outnumber short bets, which profit when values fall – to 681,515 contracts, the highest since June 2014.

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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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December 28th, 2012

Rubber futures will likely extend a bull market next year as monetary and fiscal stimulus from Japan to China and the U.S. will accelerate a global recovery and boost raw-material demand.

Rubber futures in Tokyo, a global benchmark, will climb 14 percent to 344 yen a kilogram ($3,981 a metric ton) by March, according to the median estimate from seven analysts surveyed by Bloomberg, who correctly predicted in September that the price would climb to 300 yen by the end of 2012. The threshold was crossed yesterday for the first time since May.

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December 27th, 2012

Silver futures for March delivery advanced 1.1 percent to $30.365 an ounce. Earlier, the price dropped as much as 1.1 percent.

Gold futures rebounded after U.S. Senate Majority Leader Harry Reid said that the budget dispute probably won’t be resolved before Jan. 1, boosting demand for the metal as a haven.

Republicans won’t cooperate, said Reid, a Nevada Democrat. The impasse leaves the U.S. closer to more than $600 billion in automatic tax increases and spending cuts set to begin in 2013. Earlier, gold fell as much as 0.5 percent.

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December 27th, 2012

Heating oil advanced on forecasts for colder weather in the U.S. Northeast and for a decline in distillate inventories from the lowest seasonal level in 12 years.

Heating Oil futures rose as the National Weather Service’s Climate Prediction Center predicted below-normal temperatures in the Northeast from Jan. 1 to Jan. 9. The Energy Department will probably report tomorrow that heating oil and diesel supplies declined 1 million barrels last week to 116 million, according to the median estimate of nine analysts in a survey by Bloomberg.

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December 27th, 2012

S&P 500 Futures – U.S. stocks fell, after a three-day drop for the Standard & Poor’s 500 Index, as consumer confidence declined more than forecast and lawmakers returned to Washington to resume budget talks.

Marvell Technology Group Ltd. fell 3.6 percent after being downgraded by JMP Securities LLC. BCD Semiconductor Manufacturing Ltd. (BCDS) almost doubled after Diodes Inc. agreed to buy the company for $151 million.

The S&P 500 fell 0.2 percent to 1,417.62 at 10:09 a.m. in New York. The Dow Jones Industrial Average lost 13.69 points, or 0.1 percent, to 13,100.90 today. Trading in S&P 500 companies was 36 percent below the 30-day average at this time of day.

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December 26th, 2012

Lumber futures jumped to the highest in seven years after U.S. home prices climbed more than forecast in October, adding to signs of stabilization for the housing market.

The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain. The average rate of housing starts from September through November was the strongest since the three months ended August 2008, the Commerce Department said last week.

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December 27th, 2012

Rubber futures rallied above the 300-yen level for the first time since May as Japan’s currency dropped to a 27-month low on prospects for additional stimulus driven by Prime Minister Shinzo Abe’s new government.

Rubber for delivery in June advanced 1.6 percent to 300.7 yen a kilogram ($3,507 a metric ton) on the Tokyo Commodity Exchange, the highest settlement for the most-active contract since May 8. Futures have gained 14 percent this year.

The yen slid to the lowest level against the dollar since September 2010 on expectations that the new government will push for more cash infusions to bolster the economy. A weaker Japanese currency makes yen-denominated contracts cheaper for holders of other currencies, and helps exporters such as Toyota Motor Corp. (7203) boost sales overseas.

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December 26th, 2012

Cotton futures rose to a nine-week high as exports surged from the U.S., the world’s biggest shipper. Sugar and coffee advanced, while cocoa and orange juice fell.

In the four weeks that ended Dec. 13, U.S. export sales of upland cotton soared sixfold from a year earlier, Department of Agriculture data showed on Dec. 20. Cotlook Ltd., the publisher of a benchmark price index, raised its forecast for global consumption, citing increases in countries including India.

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