Hedge funds cut positions to ’09 low as Goldman says buy

Metal Stockpiles

China’s inventories of steel reinforcement-bar jumped 86% this year, according to data from Shanghai Steelhome Information. The country’s copper imports tumbled 38% from a year earlier to 298,102 tons in February, the lowest in 20 months, custom figures showed March 8. Global supplies of the metal will outpace demand by 56,000 tons this year, Barclays estimates. Zinc will have a surplus of 273,000 tons, and aluminum of 1.82 million tons, the bank forecasts.

Bullish gold wagers dropped 27% to 39,631 futures and options, the lowest since July 2007, the CFTC data show. The holdings are down 61% this year. Those for silver tumbled 47% to 6,118 contracts, the biggest slump since June, and platinum wagers fell 8.7% to 30,705.

Crude-oil wagers slid 4.4% to 167,498 contracts, the lowest since Jan. 1. The net-long position in heating oil tumbled 61%.

Farm Bets

A measure of speculative positions across 11 agricultural products from wheat to coffee to cattle fell 3.4% to 140,580, the lowest in almost four years.

Wagers on a decline for coffee increased to 24,671 contracts, and were at a record bearish outlook of 28,454 in the week ended Feb. 19, the CFTC data show. Supply will outpace demand by 6.73 million bags this season, each weighing 60 kilograms, from a 1.08 million-bag shortfall in the previous season, Rabobank forecasts.

“In the past couple of years everyone had been enthusiastic about commodities being the diversifying risk trade, and that seems to have changed,” said Frances Hudson, who helps manage about $263.9 billion of assets as a strategist at Standard Life Investments in London. “Also, the dollar has been playing a huge role as it has jumped against other currencies. Investors have been disappointed by the broad commodity performance and have continued to withdraw.”

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