Hedge funds get bullish on corn and natural gas

Hedge funds and other big speculators raised their bullish bets on U.S. commodities for the first time in five weeks, piling mostly into natural gas and corn due to favourable supply-and-demand situations, trade data showed Mar. 15.

Natural gas saw close to $2 billion worth of new net long contracts by the so-called money managers during the week to March 12, according to Reuters’ calculations of the data released by the Commodity Futures Trading Commission (CFTC).

Corn had almost $1 billion in fresh inflow, the CFTC’s weekly report on commodity trader positions showed. The report is compiled at the close of each Tuesday and issued on Fridays.

The broadly optimistic mood among hedge funds and speculators during the week to March 12 raised the net long managed money across 22 commodity markets to more than $59 billion from around $54 billion at the close of March 5.

The rise of about $5 billion was the first in five weeks, and came after the net long money had fallen to a 15-month low, Reuters’ records of the CFTC reports showed.

Nearly $30 billion in net managed long money was wiped out over the past month as hedge funds and other non-commercial investors cut their commodity holdings on fear about the global economic recovery. Some of that money went into equities as the key Dow index for U.S. stocks hit record highs.

The net long managed money in corn rose by nearly $920 million.

The key second-month corn contract on the Chicago Board of Trade rallied in four of the five sessions during the week to March 12, reaching a near five-week high of $7.17-3/4 a bushel.

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