• About Commodity Port
  • Membership
  • Privacy Policy
  • Contact Us
Monday, March 1, 2021
Commodity Port
No Result
View All Result
  • HOME
  • ABOUT US
  • COMMPORT TRADE FINANCE
  • CURRENT PROJECTS
  • SECTOR UPDATE
    • AGRICULTURE
    • ENERGY
    • METALS
    • OIL AND GAS
    • COMMODITIES
    • MINING
  • NEWS AND EVENTS
    • OPINIONS
    • POLICIES AND REGULATIONS
    • RAISING FINANCE
    • RESOURCES
    • ENVIRONMENT
    • INFRASTRUCTURE
    • EVENTS
  • DIRECTORY
  • CONTACT US
Commodity Port
No Result
View All Result

Wall Street Is Most Bullish on Commodities in a Decade

Wall Street Is Most Bullish on Commodities in a Decade

January 18, 2021
inCommodities
Wall Street Is Most Bullish on Commodities in a Decade

Commodity investors are back in full force, with record wagers that crops, metals, and oil are set for a rally.

A weakening dollar is making materials denominated in the currency more appealing at a time when equities are on a tear and the world is on a path to recover from the coronavirus pandemic. All of that has prompted speculators to pile back into commodity markets, boosting combined bets on rising prices to the highest in at least a decade.

RelatedPosts

Keep on trucking: Building a solid supply chain for palm oil

Goldman proclaims the dawn of a new commodity supercycle

Oil falls on mounting COVID-19 cases, supply concerns

That’s a stark turnaround for a corner of the financial market that had been struggling to lure investors since the China-driven commodities super-cycle earlier this century. The backdrop is looking familiar: The Asian powerhouse is on a buying spree again and investors are looking for alternative places to put their money as central banks try to prop up economies.

“Commodities are on a winning streak right now,” said Michel Salden, head of commodities at Vontobel Asset Management. “Markets are rallying due to the combined effect of U.S. dollar weakness, the cyclical recovery from Covid-19, central bank stimuli, and increased fiscal spending on infrastructure.”

Investors are so bullish that they were holding a net-long position, or the difference between bets on rising prices and wagers they will fall, of 2.3 million futures and options contracts in the week ended Jan. 5, according to data compiled by Bloomberg. That’s the most since at least January 2011.

The calculations include 20 of the 23 raw materials in the Bloomberg Commodity Index. They exclude aluminum, zinc, and nickel, which are reported by the London Metal Exchange on a different basis.

Money managers’ bullish bets on corn are currently at the highest in almost 10 years. China is loading up on American crops, having already bought a record amount of the grain, while soybean purchases are running at the fastest pace since 1991. Sugar has also caught investors’ attention, with Alvean, the world’s largest trader of the sweetener, forecasting two years of shortages ahead.

“Even grains, that had been on a downward path since 2012, have rallied more than 45% over the last six months due to La Nina-related droughts in Latin America,” Salden said. He also highlighted China’s role in securing strategic reserves of commodities.

Oil, which is rebounding from an unprecedented crash triggered by the pandemic, has rallied to 10-month highs after Saudi Arabia’s surprising decision to unilaterally cut production by 1 million barrels a day for February and March.

The rally has also extended beyond headline crude prices and into options and signs of strength on both ends of the oil futures curve. Speculators boosted bullish bets on Brent to an 11-month high, while net-long positions in gasoline climbed to a 10-month high.

“Crude oil looks like a great play as the economy reopens, demand picks up and people build confidence around the vaccine,” said Phil Streible, chief market strategist at Blue Line Futures LLC in Chicago. “Saudi Arabia really bent overbackwardto try and help support prices.”

Bets on rising gold prices rose to a 16-week high, and platinum net-longs are at the highest since February. Investors also boosted net-long position bets on silver for the fifth week in six.

Source: Isis Almeida, Michael Roschnotti , and Andres Guerra Lu
Tags: commodity
Previous Post

Nigerian Oil Major Focuses On Condensates To Offset OPEC Cuts

Next Post

Keep on trucking: Building a solid supply chain for palm oil

Discussion about this post

Get Latest Commodity Reports and News

Commodity Port

Commodity Port is a globally focused mediator platform for physical commodities trading, the platform covers all commodity types e.g. agriculture, fisheries, energy, mining etc. read more.

Latest Update

  • Food crisis: CBN N50b intervention in commodity exchange offers ray of hope`
  • Combining old knowledge and new ideas in fishing in Kalimantan
  • How do smallholder farmers benefit from sustainable agriculture?

Our Social Media

  • About Commodity Port
  • Membership
  • Privacy Policy
  • Contact Us

© 2018 Commodity Port - All rights reserved.

No Result
View All Result
  • HOME
  • ABOUT US
  • COMMPORT TRADE FINANCE
  • CURRENT PROJECTS
  • SECTOR UPDATE
    • AGRICULTURE
    • ENERGY
    • METALS
    • OIL AND GAS
    • COMMODITIES
    • MINING
  • NEWS AND EVENTS
    • OPINIONS
    • POLICIES AND REGULATIONS
    • RAISING FINANCE
    • RESOURCES
    • ENVIRONMENT
    • INFRASTRUCTURE
    • EVENTS
  • DIRECTORY
  • CONTACT US

© 2018 Commodity Port - All rights reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.