Futures Industry News
Hedge funds reduce positions even as commodities climb
Dec 27, 2011 03:51 PM
While the commodities market has seen a noted recovery over the past week, hedge funds have not seen much benefit from the rally, according to Bloomberg.
In week ended December 20, data from the Commodity Futures Trading Commission illustrates that positions in 18 of the most important U.S. futures and options markets fell to 454,512 contracts.
That represents a 15 percent decline from the start of the week and the lowest point since March of 2009. All told, market analyst EPFR Global estimates that around $490 million were removed from commodities markets in week ended December 21.
"Going into 2012, there's a very, very high probability that we can see some fairly hefty declines in the commodity markets," Stephen Hammers, chief investment officer at Compass EMP Alternative Strategies Fund, which manages roughly $500-million-worth of assets, told Bloomberg.
However, Bloomberg reported on December 20 that the Standard & Poor's GSCI Index, which tracks 24 key commodities, was primed for its largest rise since October, rising 2.5 percent to 634.69 by 1:07 p.m. that day. By 2:43 p.m., December 27, the GSCI had reached 645.88, up 1.76 percent from the week before.
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