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May 28, 2012 4:00 AM GMT+0800 Speculators raised bullish bets on commodities before signs ofEurope s deepening debt crisis and slowing Chinese growth droveprices lower for a fourth consecutive week, the longest slump sinceSeptember. Money managers boosted net-long positions across 18 U.S. futuresand options by 9.5 percent to 675,362 contracts in the week endedMay 22, government data show. The Standard & Poor s GSCI SpotIndex of 24 raw materials reached a five-month low on May 23. Agauge of net positions for 11 U.S. farm goods surged 21 percent,the most since February, before agriculture prices tracked byS&P posted the biggest weekly loss in eight months. The euro dropped to the lowest since July 2010 on May 25 afterCatalonia s president repeated his call for Spain s centralgovernment to help regions access funding and S&P cut thecredit ratings for five of the country s banks. China s biggestlenders may fall short of loan targets for the first time in atleast seven years, three bank officials said, and the nation sState Council refrained from backing Premier Wen Jiabao s push toexpand credit. It s bit a surprising to see so much on the long side, becausethe trend is down in commodities, said Walter Bucky Hellwig,who helps manage $17 billion of assets at BB&T WealthManagement in Birmingham, Alabama. We re probably not going tosee an extended rally until we get some type of monetary easing.Buying now is an aggressive move. You re betting on a short-termpop from some sort of resolution in Europe. Agriculture Gauge The S&P GSCI index fell 1.4 percent last week and is down 9.4percent in May, heading for the biggest mostly loss sinceSeptember. The S&P agriculture gauge tumbled 4.8 percent lastweek. The MSCI All-Country World Index of equities rose 0.7percent, and Treasures slid 0.2 percent, a Bank of America Corp.index shows. The dollar rose 1.4 percent against a basket of sixcurrencies, rallying for a fourth week. Twenty of the 24 raw materials tracked by S&P dropped lastweek. Corn tumbled 9 percent, the most in a year, and cocoa slumped7.2 percent, the biggest loss in 2012. A political impasse in Greece, where voters rejected austeritymeasures in elections on May 6, has raised concern that country mayleave the euro. Spain s government is analyzing with allcaution requests from regional governments to help them regainaccess to capital markets, Deputy Prime Minister Soraya Saenz deSantamaria said May 25. Catalonia is one of 17 semi-autonomousregions in the country. Europe s crisis risks deepening, damaging the world economy, theParis-based Organization for Economic Cooperation and Developmentsaid in a report May 22. Aggressive Stimulus China s Wen, in comments posted on the government s website May20, said the nation should put stabilizing growth in a moreimportant position and increase lending to support construction.More aggressive stimulus measures will spur Chinese economicexpansion and boost copper prices in the second half of the year,Morgan Stanley analysts led by New York-based Hussein Allidina saidin a report May 21. Copper inventories monitored by Shanghai s exchange fell for aseventh straight week to the lowest since January. China is theworld s biggest consumer of industrial metals. Novelis Inc., thetop global producer of rolled aluminum, said last week thatdoubling its output capacity may not be enough to meet risingdemand from car makers. Where investors struggle at the moment is that they can see inthe medium- to long-term it s still a bull story, said JonathanWhitehead, the global head of commodities markets at SocieteGenerale SA. Most of the reasons why commodities spent the 2000sgoing up are still there -- growing demand and increasing supplyissues. $1.18 Billion Investors pulled $1.18 billion from commodity funds in the weekended May 23, the fifth consecutive drop and the most this year,according to Brad Durham, a managing director at Cambridge,Massachusetts-based EPFR Global, which tracks money flows. Gold andprecious metals outflows totaled $631.7 million, also the biggestexit this year, he said. Money managers boosted corn wagers by 30 percent to 109,022 futuresand options contracts, the Commodity Futures Trading Commissionsaid. That s the biggest jump since July 2010. Last week s 9percent tumble in Chicago prices extended this year s decline to11 percent. Speculators are bullish on wheat for the first time sinceSeptember. Funds went from a short position, or betting on pricedeclines, of 50,057 futures and options to a long holding of 7,026in the week ended May 22, the CFTC data show. The gain of 57,083contracts was larger than for any of the 18 raw materials trackedby Bloomberg. Prices fell 2.2 percent last week. Export Sales Slowing growth in China, the world s biggest pork consumer, iseroding demand for grains used in livestock feed. In the week endedMay 17, U.S. corn export-sales for delivery before Aug. 31, 2013,plunged 44 percent from a week earlier, the Department ofAgriculture said May 24. Gold wagers dropped for a third week to 77,318 contracts, extendinga slump to the lowest since December 2008. Funds are bearish oncopper prices for the first time since January, going to anet-short position of 2,808 contracts as of May 22, from net-longholdings of 4,833 a week earlier. Nine of 18 analysts surveyed by Bloomberg expect the metal to dropthis week and three were neutral. Traders were bearish for a secondweek, the first consecutive negative outlook since early April. There s been a down shift in demand for a lot of commoditieswith the concerns over growth in China and Europe, said JackAblin, the Chicago-based chief investment officer of BMO HarrisPrivate Bank, which oversees about $60 billion of assets. Thereare generally a lot of headwinds. We re underweight in commoditiesand may go to zero. The e-commerce company in China offers quality products such as Electric Guitar Instruments , Musical Instrument Amplifier, and more. For more , please visit Woodwind Musical Instruments today!
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