Hedge funds and other big speculators have pulled more than $5 billion from U.S. commodity markets, cutting their net long position for the first time in six weeks after sending oil, metals and crop prices to multimonth highs, trade data showed Friday.
The profit-taking in the week to September 25 was the biggest in four months by the so-called "money managers" in commodities, according to data issued by the Commodity Futures Trading Commission (CFTC) and calculated by Reuters.
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It was the first major snap in managed money net longs that had built up since early July in anticipation of stimulus measures from the Federal Reserve and the European Central Bank.
In that period, hedge funds and other speculators pumped about $30 billion into U.S. commodities, by Reuters' estimates, creating new bullish milestones in crude oil, gold, copper and soybean prices.
Reuters' calculations of the CFTC's Commitment of Traders data showed the value of the net long position held by money managers in some 22 U.S. commodity markets fell to $112.3 billion in the week to September 25, from $117.8 billion in the week ended September 18.
The figures are calculated by Reuters based on the change in net positions from a week ago, multiplied by the contract's value at the end of the period. Because most investors trade commodities on margin, the change in the value of positions is not directly equivalent to total investment.
In contract terms, the decline during the week to September 25 was 87,955 contracts, or nearly 6 percent lower from the previous week.
OIL LEADS LOSSES, GOLD SHINES
Oil accounted for much of the loss. Reuters' calculations showed a net outflow of $3.4 billion, or 36,885 contracts, in crude oil futures held by money managers on the New York Mercantile Exchange.
Speculators were also bearish on natural gas, soybeans, raw sugar, cotton and arabica coffee -- trimming net longs or adding to net shorts in these markets.
The profit-taking did not mean that money managers were done on commodities, said some analysts, who placed high hopes on an even bigger rally down the road in markets such as gold due to inflationary pressure.
Managed money's net long in U.S. gold hit near seven-month highs on bets that major central banks would keep pumping money to stimulate growth.
"Gold is being utilized as a protest by investors against governments which are failing miserably to solve their deficit and debt problems," said Jeffrey Sica, chief investment officer of SICA Wealth Management, which has over $1 billion in assets.
Gold closed lower on Friday, but the precious metal posted its biggest quarterly gain in more than two years.
The 19-commodity Thomson Reuters-Jefferies CRB index, a bellwether for the asset class, also had its best quarter since the first quarter of 2011.
Monthly data issued separately by the CFTC on Friday showed the net length across U.S. commodity markets rose by $8.8 billion in August to $209 billion.
The CFTC figures account for only a portion of the investor capital invested in commodity markets worldwide. Much of the rest are invested in over-the-counter contracts, physical exchange funds or credit notes, or via banks, which are classified differently by the CFTC.
(Editing by Jim Marshall)