By Debarati Roy
Hedge funds increased commodity bets to the highest in almost five months on signs that a rescue plan for Greece and faster U.S. growth will buoy demand as supplies shrink for everything from soybeans to copper.
Money managers boosted net-long position across 18 U.S. futures and options by 2.9 percent to 956,313 contracts in the week ended Feb. 14, the most since Sept. 20, government data show. Soybean wagers jumped 29 percent to a five-month high. Silver holdings rose for a seventh straight week, the longest advance in almost three years.
The Standard & Poor’s GSCI Spot Index of 24 commodities reached a six-month high on Feb. 17 as euro-area leaders expressed confidence that an agreement on a Greek bailout can be reached. Reports last week on U.S. housing and manufacturing beat analysts’ forecasts, and claims for jobless benefits dropped to a four-year low. Investments (.CMDOI) in raw-material futures have jumped 13 percent this year, exchange data show.
“We are seeing confidence return to the market,” said James Paulsen, 53, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $330 billion of assets. “The U.S. is doing well. Europe is trying to resolve its issues. Going forward, we will see commodities move up significantly.”
Cocoa, Natural Gas
The S&P GSCI gauge rose 2.2 percent last week. The MSCI index of equities ended the week 1.5 percent higher, and the yield on 10-year Treasuries rose 1.6 basis points, or 0.016 percentage point, according to Bloomberg Bond Trader prices... read more.
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