Commodity Bulls place biggest Long bets in 2 yrs


Players increased Bullish commodity bets by the most in 2 yrs as prices rebounded from a Bear market, boosted by a crop-damaging drought in the US and moves by China and Europe to drive economic growth.

Money managers raised their net-Long positions across 18 US futures and options by 33% to 963,447 contracts in the week ended 3 July, Commodity Futures Trading Commission data show.

The Standard & Poor's GSCI Index of 24 raw materials fell 0.3% since then, the measure has rallied 10%since reaching a Bear market on 21 June.

Gains were led by Corn, which climbed 33%, and Wheat, which rose 22%.

The worst Midwest drought since the 1980′s is wilting the US Corn crop, the World's biggest, prompting Goldman Sachs Group Inc. (NYSE:GS) to cut its forecast for yields.

European Central Bank President Mario Draghi Monday signaled policy makers may be open to another interest-rate cut after lowering the benchmark rate to a record last week.

Chinese officials will intensify their response to an economic slowdown, Premier Wen Jiabao said Sunday 8 July.

US Federal Reserve Bank of Chicago President Charles Evans yesterday said the US central bank should move more forcefully to lower the unemployment rate. Speaking at the same conference in Bangkok, Boston Fed President Eric Rosengren said another round of asset purchases is possible to spur growth.

The US central bank bought $2.3-T of securities in two rounds of so-called quantitative easing (QE) and held borrowing costs at a record low from December 2008 through June 2011, spurring a 92% jump in the GSCI commodity index.

The market still locked in a risk-on, risk-off battle, back and forth until there is clarity on where the economy is headed.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.