Hedge Funds Reduce Bullish Bets by Most in a Month: Commodities

Fiscal cliff looms large in position change

Hedge funds cut bullish commodity bets by the most in a month as the Federal Reserve warned the U.S. budget impasse may damage the economy, increasing concern about demand just as prices head for the first loss since 2008.

Speculators and money managers decreased net-long positions across 18 U.S. futures and options by 11 percent to 802,817 contracts in the week ended Dec. 11, U.S. Commodity Futures Trading Commission data show. Sugar holdings tumbled 68 percent, the most in five years, and those for wheat dropped to the lowest since June. Wagers on higher crude-oil prices tumbled 21 percent, the most since May.

U.S. retail sales rose less than forecast in November, climbing 0.3 percent, Commerce Department figures showed Dec. 13. Economists projected a gain of 0.5 percent, according to the median of 81 forecasts in a Bloomberg survey. Confidence among small businesses plunged last month to the lowest since March 2010, the National Federation of Independent Business’s optimism index showed Dec. 11.

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