Hedge fund managers are optimistic about the commodity markets. They accumulated more long positions by October 18th in 18 futures and options contacts. The commodities with the biggest jump in contracts were heating oil, gasoline, coffee and soybeans. The Standard & Poor's GSCI has been extremely volatile the last two months. It is up 9.2% this month and was down 12% last month. Managers are predicting that the emerging markets countries and the US will continue to grow.
Crude oil is up 15% in October. Corn is up 9.9%. Coffee has been up 22% for the year.
Nelson Louie, Global Head of Commodities at Credit Suisse Asset Management, said that the recent fluctuations in the markets were a result of traders deciding to increase or decrease their exposure to commodities based on the macroeconomic concerns. Once they are resolved, then supply and demand should drive commodity prices.
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