Hedge Funds Cut Bullish Bets on Commodities From Soy to Copper
(Bloomberg) -- Hedge funds slashed net-long bets on commodities from soybeans to corn to copper, taking cues from a raft of bearish factors that led to a price collapse in commodities last week.
Metals saw dual blows to demand as China made anti-inflation moves and the Federal Reserve signaled earlier-than-expected rate hikes. In crops, new weather forecasts for rain took a toll.
Bullish soybeans bets dropped to the lowest in 10 months in the week ended June 15, while net-long wagers on corn fell to the lowest in about six months, U.S. Commodity Futures Trading Commission data showed Monday. Long positions on Comex copper slumped to the lowest in about a year.
In agriculture, grain and oilseed futures notched the worst rout in a dozen years last week. Recent rainfall over parched U.S. farmland sent crop prices plummeting, but the prospect of ongoing drought is keeping markets on edge. That’s a reversal from earlier this year, when crops rallied on tight supplies and unprecedented Chinese demand for farm imports.
“The weather forecasts are extremely volatile this year,” said Charlie Sernatinger, head of global grain futures at ED&F Man Capital Markets Inc.
Copper had its worst week since the start of the pandemic due to the dimming outlook for demand. Prices slumped 8.6% last week in London. Previously, the metal had been pumped up by the prospect of a flood of stimulus spending focused on renewables and electric vehicles.
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