Speculators reduce commodity wagers as annual advance erased

Economic growth a concern

Fiscal Cliff

The U.S. may tumble into a recession next year if Congress fails to avert the so-called fiscal cliff of automatic spending cuts and tax rises, International Monetary Fund Managing Director Christine Lagarde said in an interview with CBS Oct. 1.

Goodyear Tire & Rubber Co., the largest U.S. tiremaker, said Oct. 26 third-quarter profit was below analysts’ estimates, hurt by lower sales in Europe. Chief Executive Officer Richard Kramer said in an earnings conference call with analysts that the Akron, Ohio-based company faced “underlying uncertainty in the global economy.”

Investors lowered wagers on a crude-oil rally by 17 percent to 138,340 contracts, the lowest since July 31, CFTC data show. Futures declined 4.2 percent in New York last week, the biggest drop since Sept. 21.

Farm Goods

Bullish bets on sugar dropped 17 percent to 45,966 contracts, a four-week low. Prices slipped 4.3 percent last week. Investors increased their net-short position in coffee by 23 percent to 16,060 contracts, the most bearish since Sept. 11. Prices fell for a fourth week, the longest slump since June 15.

A measure of net-longs for 11 U.S. farm goods rose 11 percent to 684,229 contracts, CFTC data show. That’s the first increase in seven weeks and the biggest gain since July 10.

Cotton holdings increased more than 10-fold to 21,666 contracts, from 2,045 contracts a week earlier. Futures tumbled 5.8 percent in New York last week, capping the biggest slide since June 1. Cotlook Ltd., the publisher of a benchmark cotton index, boosted its estimate for a global surplus by 16 percent, citing higher output in China and India, the top producers.

“The recent selloff in commodities is more a reflection of concerns about slower growth prospects,” said Nelson Louie, the global head of commodities at New York-based Credit Suisse Asset Management, who helps manage $11 billion. “With the rally in commoditiesearlier immediately after the stimulus announcement, you would expect to have some de-risking that takes place.”

Bloomberg News

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