Funds boosted their soybean bets by 1.1 percent to 243,389 contracts, the highest since at least June 2006. Prices will average $14.75 a bushel in the second quarter as South American output posts its biggest decline on record, Rabobank’s analysts wrote in their report. That would be the highest quarterly average ever, and the oilseed closed at $14.935 on April 27.
Investors pulled $291 million out of commodities in the week ending April 25, said Cameron Brandt, the director of research at Cambridge, Massachusetts-based EPFR Global, which tracks investment flows. Gold and precious-metals funds outflows totaled $64 million, Brandt said.
Bets on rising gold prices fell 4.2 percent to 107,600 contracts, the lowest since January 2009. Bullion gained 1.3 percent in New York last week. Open interest, or contracts outstanding, in U.S. gold futures fell to 395,389 on April 24, the lowest level since September 2009, Comex data show.
Federal Reserve Chairman Ben S. Bernanke said last week that central bankers “remain prepared to do more” if U.S. economic conditions worsen. Monetary stimulus is positive for commodities as investors seek alternative assets, said Michael Cuggino, who manages about $17 billion of assets at Permanent Portfolio Funds in San Francisco.
The S&P GSCI rose more than 80 percent from December 2008 to June 2011 as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing and held borrowing costs at a record low.
The world economy will expand 3.5 percent this year, compared with a January projection of 3.3 percent, the IMF said April 17, raising its outlook for the first time in more than a year. Goldman Sachs Group Inc.’s commodity analysts, led by Jeffrey Currie in London, said in a report April 24 they expect commodities to return 13 percent over the next 12 months.
“The fundamentals in commodities, especially on the agriculture side, are quite positive,” said Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati who helps oversee $14.7 billion of assets. “The fundamentals just cry out that food is going to be a solid investment.”
--With assistance from Joshua Zumbrun in Washington, Glenys Sim in Singapore, Elizabeth Campbell in Chicago and Caroline Salas Gage in New York. Editors: Millie Munshi, Steve Stroth