Gold positions cut by most since ’07 as sugar bears grow

China Imports

China’s demand for commodities will continue to support prices as the country imports more energy, metals and grains, according to Adrian Day, who manages about $170 million of assets as the president of Adrian Day Asset Management in Annapolis, Maryland.

China bought 410,000 metric tons of soybeans from the U.S., the Department of Agriculture said on Feb. 22. The Asian nation has a “structural shortage” of grain because demand continues to rise, Minister of Agriculture Han Changfu said in a statement posted on the central government website on Feb. 21. Imports of copper rose 2.9% in January from December, customs data showed Feb. 8.

In Brazil, a record backlog at the Port of Santos may delay shipments of soybeans, corn, wheat, rice and sugar to China. The country’s ports have 192 ships waiting to load 10.8 million tons of commodities, compared with 90 ships waiting to load 4.1 million tons a year earlier, researcher SA Commodities said Feb. 22.

Agriculture Demand

“I track a lot of shipping into China, and they can’t get enough to meet their demand for agriculture,” said Jeffrey Sica, who helps oversee more than $1 billion of assets as the president and chief investment officer of Sica Wealth Management LLC in Morristown, New Jersey. “There’s this whole sentiment around the funds selling off, but the demand is still very much there.”

Money managers took $828 million from commodity funds in the week ended Feb. 20, said Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Outflows from gold and precious-metals funds totaled $870 million, the seventh straight week of net withdrawals, the longest stretch since first quarter of 2011, he said.

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