Money managers added $264 million to gold funds in the week ended Sept. 11, according to Simon Ringrose, the managing director of sales for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Total inflows for commodity funds were $582 million, according to EPFR.
Bullish bets on crude oil fell 5.2% to 290,058 contracts, the lowest since July 9, the CFTC data show. West Texas Intermediate slid 2.1% to $108.21 a barrel last week, the biggest drop since July 26, as Syrian tensions eased. The nation borders Iraq and is near Iran, countries that together hold almost a fifth of the output capacity from the Organization of Petroleum Exporting Countries, according to data compiled by Bloomberg.
Investors cut bullish copper holdings by 76% to 2,007 contracts. Futures slid 1.8% in New York last week. Supply will outpace demand by 150,000 metric tons this year, and the surplus will expand to 620,000 tons in 2014, Societe Generale said in a Sept. 13 report.
A measure of net-long positions across 11 agricultural products gained 7.5% to 300,032 futures and options. The S&P’s Agriculture Index of eight commodities tumbled 17% this year, heading for the worst annual decline since 2008.
Money managers expanded their net-short position in corn to 64,686 contracts, from 64,506 a week earlier. Investors have bet on lower price since June as the U.S. government forecasts a record domestic crop. The net-bearish holding in wheat reached 47,008 futures and options, from 38,390.
The U.S. corn harvest, the world’s largest, will expand 28% from a year earlier, helping to send global inventories to a 12-year high, the Department of Agriculture said Sept. 12. The USDA raised its estimate for global wheat production 0.5% from last month to a record 708.89 million tons.
The S&P GSCI gauge surged 92% from the end of 2008 through June 2011 as the Fed’s unprecedented money printing helped revive economic growth and demand for metals, grains and energy. The Bloomberg Dollar Index fell 11%.
“Supply is going to be really robust, and we don’t see any disruption as the harvest will be especially strong,” said Jim Russell, a senior equity strategist at U.S. Bank Wealth Management, which manages about $112 billion. “The Fed tapering, if it moves forward as anticipated, will strengthen the value of the U.S. dollar, and that should create a little bit of price weakness for all commodities.”