Business Week – Hedge funds increased bullish commodity bets for the fourth straight week and became the most bullish on copper since December on signs of faster growth in the U.S. and China.
Speculators boosted net-long positions across 18 U.S. futures and options in the week ended Feb. 5 by 11 percent to 885,655 contracts, marking the longest stretch of gains in more than six months, U.S. Commodity Futures Trading Commission data show. Traders lifted bullish wagers on everything from copper to platinum, corn and soybeans.
A gauge of prices for 18 commodities most tied to economic growth, including burlap and steel, reached the highest since September 2011 at the end of January as global manufacturing gained. In China, the world’s top consumer of cotton, copper and pork, trade grew more than analysts forecast, the government said Feb. 8. Service industries in the U.S., the biggest user of crude oil and corn, expanded more than analysts predicted in January, a private survey showed Feb. 5.
“With China and the U.S. registering growth, the economically sensitive commodities will do well,” said Michael Strauss, who helps oversee about $26 billion as chief investment strategist at Commonfund in Wilton, Connecticut. “The global environment is favorable for commodities.”