Chicago: Hedge funds boosted bets on rising commodities to the highest in 15 months, driving prices into a bull market as the US drought worsened and the Federal Reserve signalled it may take more steps to spur economic growth.
Money managers’ net-long position across 18 US raw materials rose 10 per cent to 1.32 million futures and options in the week ending August 21, US Commodity Futures Trading Commission data show. Holdings doubled in two months to the highest since May 2011. Bets on corn are the most bullish in 15 months amid the worst US drought in 56 years, while wagers on gold rebounded and platinum more than doubled.
The Standard & Poor’s GSCI Spot Index of 24 raw materials ended the week up 20 per cent from a June low, the common definition of a bull market. Minutes of the Fed’s last meeting, released on August 22, showed many policymakers favoured “additional monetary accommodation” soon unless growth strengthens. Purchases of new US homes rose more than forecast in July, matching a two-year high. People’s Bank of China Governor Zhou Xiaochuan said on August 23 that stimulus measures “can’t be ruled out” in the world’s second-largest economy.
