Funds Buying Corn to Silver to Soy as Commodities Tank

The rout that drove commodities to a nine-month low is proving irresistible to speculators anticipating that even slowing economic growth will cause shortages of raw materials, according to BusinessWeek. Oil has risen 8 percent since plunging 25 percent in the two weeks to Aug. 9. Copper has rebounded 4.6 percent after sliding 16 percent. The Standard & Poor’s GSCI Enhanced Commodity Index rose 4.2 percent since bottoming almost two weeks ago. Goldman expects the gauge to gain 20 percent in 12 months, led by energy and industrial metals.

While mounting concern about the economy wiped more than $8 trillion off the value of global equities in four weeks, Commodity Futures Trading Commission data show hedge funds and other speculators increased bullish commodity bets by 2.5 percent in the week ended Aug. 16, the most in a month. Traders still expect production shortfalls in copper, corn and oil as emerging economies expand. Wagers on corn, silver and soybeans rose and those on oil were little changed….

Find out more at http://www.businessweek.com/news/2011-08-22/hedge-funds-buying-corn-to-silver-to-soy-as-commodities-tumble.html