Bull positions tumble most in 16 weeks as prices slump

Speculators cut bullish positions by the most in 16 weeks as commodities capped the first monthly loss since May on mounting concern that central bank stimulus measures won’t be enough to halt slowing economic growth.

Money managers reduced net-long positions across 18 U.S. futures and options by 5 percent to 1.24 million contracts in the week ended Sept. 25, the biggest slump since June 5, Commodity Futures Trading Commission data show. Crude-oil bets fell the most since May, and cotton holdings reached a six-week low. Bullish wagers on soybeans retreated for a third week, the longest streak since June.

The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 5.1 percent since reaching a five-month high Sept. 14, the day after the Federal Reserve announced a third round of debt buying. U.S. consumer spending stalled in August, and confidence among American shoppers climbed less than expected last month. Demonstrators clashed with police in Madrid last week to protest budget cuts, stoking concern that Europe’s leaders won’t be able to do enough to curb budget deficits.

“The question is: Will stimulus be enough, and will it fix it?” said John Kinsey, who helps manage about C$1 billion ($1.02 billion) at Caldwell Investment Management Ltd. in Toronto. “Europe is still in a mess. In the U.S., the economic numbers are still weak. We’re probably still cautious.”

Prices Drop

The S&P GSCI dropped 1.4 percent last month, while the MSCI All-Country World Index of equities climbed 2.9 percent. The dollar fell 1.6 percent against a basket of six major trading partners. Treasuries slid 0.3 percent, a Bank of America Corp. index shows. The GSCI gauge was 0.3 percent lower today.

The number of contracts outstanding across the 24 commodities tracked by S&P fell to a three-week low on Sept. 26. Soybeans tumbled 8.9 percent in September, the biggest loss among the gauge’s members and the first monthly drop since May. Cotton fell 8.6 percent.

The U.S., the world’s biggest economy, grew at a 1.3 percent pace in the second quarter, down from a previously estimated 1.7 percent, figures from the Commerce Department showed Sept. 27. The Institute for Supply-Management-Chicago Inc. said its business barometer fell to 49.7 this month from 53 in August. A reading of 50 is the dividing line between expansion and contraction.

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