Funds trim gold positions on stimulus speculation

Copper Wagers

Investors trimmed their short holding in copper to 14,660 contracts, from 26,924, the CFTC said. Prices jumped 4.2% last week. The increase is an “opportunity to short sell,” Barclays Plc said in an Aug. 9 report.

Funds are holding a net-short bet of 9,713 contracts across 11 agricultural products, compared with a net-long holding of 57,552 a week earlier, the CFTC figures show. That’s the first bearish outlook since the data begins in 2006. The S&P GSCI Agriculture Index of eight commodities dropped 19% since the start of January.

Investors are holding a record net-short position in corn of 113,072 contracts. Prices in Chicago dropped 2.3% last week, reaching a 35-month low on Aug. 9. Increased seeding and improved soil moisture may boost production in the U.S., the world’s biggest grower and exporter, to a record in the year that starts Sept. 1, according to the Department of Agriculture.

Food Declines

Bullish soybean holdings are at the lowest since February 2012, and investors are betting on declines for wheat, coffee, sugar and soybean oil. Global food costs have dropped 13% since reaching a record in February 2011, according to data from the United Nations’ Food & Agriculture Organization in Rome.

“When it comes to the food commodities, there’s been a drastic increase in supply, especially for corn,” said Jeff Sica, who helps oversee more than $1 billion of assets as the president of Sica Wealth Management in Morristown, New Jersey. “The only way we’re going to see an increase in commodities is if we see an increase in quantitative easing. Unless that happens, commodities are going to have a hard time improving.”

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