Copper closed below its 200-day moving average every day since Feb. 28. The decline in prices is an opportunity to buy and the record bearish position of speculators means there’s a potential for a short squeeze, Australia & New Zealand Banking Group Ltd. said in a report this week. A short squeeze refers to the forced covering of bets on losses as a market moves higher.
In other commodities, three of nine people surveyed expect raw sugar to rise and the same amount predicted a drop. The commodity slid 9.5 percent to 17.66 cents a pound on ICE Futures U.S. in New York this year.
Fifteen of 21 people surveyed anticipate higher corn prices next week and five said the grain will drop, while 14 of 21 said soybeans will climb and four expect lower prices. Fourteen of 19 traders predicted gains in wheat and two were bearish. Corn fell 0.4 percent to $6.9525 a bushel in Chicago this year as soybeans retreated 0.3 percent to $14.0475 a bushel. Wheat declined 12 percent to $6.8775 a bushel.
Seventeen of 32 traders and analysts surveyed said gold would rise next week, nine were bearish and six predicted little change. Bullion fell 4.7 percent to $1,596.55 an ounce in London this year after advancing the previous 12 years, the longest run of gains in at least nine decades.
Natural gas and cotton are among this year’s best performers in the S&P GSCI gauge of raw materials, while lead and zinc are among the worst. The LMEX index of industrial metals is down 5.6 percent this year and set for the first back- to-back monthly decline since 2011. The measure slid 9.2 percent in 2012’s second quarter and is 5.4 percent above the two-year low set in August.
“Base metals are still all about China, with Europe in the deep freezer and the pick-up in U.S. housing activity not really having a great impact,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “I see a potential repeat of last year with some second-quarter weakness testing the lows from the second quarter last year but that should probably be it before a recovery begins after the summer.”