By Chanyaporn Chanjaroen
May 26 (Bloomberg) -- Hedge funds are making the biggest bet in nine months that commodity prices will rise as the global economy rebounds from its steepest slump since World War II.
The CHART OF THE DAY shows an index of the net long position in U.S. commodity futures, or bets prices will rise, held by hedge funds and other large speculators. The index, consisting of 20 raw materials monitored by the U.S. Commodity Futures Trading Commission, rose to its highest since August.
The gain “indicates further willingness for investors to take on asset classes which they were earlier cautious of,” said Kevin Norrish, an analyst at Barclays Capital in London. The index plunged from a peak of 1.37 million in February last year to as little as 86,220 in December.
Sugar and corn had the largest net-long positions by the week ended May 19, while investors held the largest net-short positions in natural gas and copper.
“Agricultural products are not going to be as vulnerable to the current economic retrenchment as things like metals or oil,” Norrish said.
The Reuters/Jefferies CRB index of 19 raw materials rose 6.3 percent this year, after a 36 percent decline in 2008.
(To save a copy of the chart, click here.)
To contact the reporter on this story: Chanyaporn Chanjaroen in London at
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