Hedge funds increased bullish commodity positions for the fourth straight week and became the most bullish on copper since December on signs of faster growth in the U.S. and China.
Speculators boosted net-long positions across 18 U.S. futures and options in the week ended Feb. 5 by 11% to 885,655 contracts, marking the longest stretch of gains in more than six months, U.S. Commodity Futures Trading Commission data show. Traders lifted bullish wagers on everything from copper to platinum, corn and soybeans.
A gauge of prices for 18 commodities most tied to economic growth, including burlap and steel, reached the highest since September 2011 at the end of January as global manufacturing gained. In China, the world’s top consumer of cotton, copper and pork, trade grew more than analysts forecast, the government said Feb. 8. Service industries in the U.S., the biggest user of crude oil and corn, expanded more than analysts predicted in January, a private survey showed Feb. 5.
“With China and the U.S. registering growth, the economically sensitive commodities will do well,” said Michael Strauss, who helps oversee about $26 billion as chief investment strategist at Commonfund in Wilton, Connecticut. “The global environment is favorable for commodities.”
Markets Rally
The Standard & Poor’s GSCI gaugeof 24 raw materials traded within 0.1% of a four-month high on Feb. 8, before ending the week little changed. The commodity gauge is up 4.4% in 2013. The MSCI All-Country World Index of equities climbed 4.6%, while the dollar rose 0.6% against a basket of six trading partners. Treasuries fell 0.8%, a Bank of America Corp. index shows. The GSCI was little changed today.
Exports from China advanced 25% in January from a year earlier and imports rose 29%, according to government data. Passenger-vehicle sales surged 49% to a monthly record, a state-backed group said Feb. 7. The average automobile contains about 50 pounds of copper and 4 grams (0.13 troy ounce) of palladium, platinum or rhodium, according to the International Copper Study Group and Johnson Matthey Plc.
The U.S. non-manufacturing index for January was at 55.2, compared with analyst estimates for a reading of 55, the Institute for Supply Management said. Readings above 50 signal expansion. The group’s employment gauge was the strongest in seven years.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.