A race against the dollar. Speculative funds counter-attack commodity markets

Economic Observer reporter Li Ping international commodity prices are continuing to move higher with speculative funding.　　June 4, New York crude oil futures prices reached 69.22 U.S. dollars, compared with February 34 U.S. dollars per barrel price, the rise has been more than one times.　　On the same day, Goldman Sachs expects oil prices to reach $85 a barrel this year. 6 months ago, Goldman Sachs estimated that the international crude oil price for 2009 was only $45 per barrel.　　JPMorgan and Merrill Lynch at the time even thought that oil prices could dip to $25 trillion.　　Speculative funds, including the three US financial institutions, are pouring into commodity markets to avoid the potential risks of a weaker dollar and inflation, according to a new report by the Shanghai Research and Development Center for Jinshi Futures. The CFTC, the US Commodity Futures Trading Commission, had a record value of $916 billion trillion in June 2008, after a record low of $306 billion trillion on March 10, 2009.　　But as of May 19, 2009 this week, the CFTC's total market capitalisation has rebounded to $355 billion trillion. In the same period, international and domestic commodity futures prices rebounded sharply.　　Commodity futures, which are dominated by energy, precious metals and agricultural products, continued to strengthen in the two-month period, averaging more than 30% per cent. "Global commodity prices are facing huge upward pressure.　　"Stone Futures General manager assistant, Shanghai Research and Development Center General Manager Dong Shuzhi to this newspaper."　　Hot commodities Most of the speculative money is entering the commodity market. This is reflected in the CFTC statistics as an increase in the total value of non-commercial net bull positions. Commodity investment and non-commercial investment are two main investment modes of commodity futures market. Commodity investment is also hedging, mainly by spot enterprises.　　Its position is relatively stable, will not cause a substantial fluctuation in commodity prices. Non-commercial investment is the main means of profit of all kinds of speculative funds in the commodity market.　　Hedge funds and index funds, large and small, form the main force of global speculative capital, and their distribution in the commodity market can even influence the movements of commodity prices.　　Fancy an investment goal, these speculative funds will borrow the concept of speculation, first put the market to the trough, the opportunity to buy after a large number of constantly sing, in this low buy high selling process to achieve profitability. In the previous round of commodity market bull, speculative funds mostly followed the operation of the idea.　　Speculation on speculative funds is recognized as one of the main drivers of the 2008 oil and food price boom. However, as the economic crisis intensified at the end of 2008, a large number of speculative funds immediately chose to withdraw from the commodity market often "on the one hand, some speculative institutions in the financial crisis also suffered from capital thirst, on the one hand, the market is generally seen empty.　　In short, most of the speculative capital from the end of last year to the beginning of this year withdrew from the commodity market, "said one analyst at China Valley Futures." But since March, these speculative funds have returned. The Jinshi Futures research team has systematically analyzed the changes in futures market positions and positions, and found, since March, a large number of speculative funds have poured into the commodity market often "first energy, then precious metals and agricultural products, the total value of non-commercial net bull positions increased rapidly."　　"Dong Shuzhi said.　　In the energy sector, in October 2008, the global market for non-commercial net bull positions was set at a record low of $6.4 billion trillion, but it has recovered slowly from early 2009 and has hit a new high of $8.6 billion a year by May 19. International crude oil prices also rose from a low of $34 at the beginning of the year to the current 70 dollar level, the growth rate of more than 100%. "Non-commercial capital positions often guide the price movements of energy commodities." "Dong Shuzhi said.　　They expect the price of crude oil to sustain the rally, fuelled by these speculative funds.　　Speculative funding for the agricultural market is also very strong, from the beginning of February to the end of May, the agricultural market in the monthly increase of 7.5 billion U.S. dollars, the momentum of the 06-07-year bull market in the average monthly growth rate of about 809 billion U.S. dollars.　　From November 08 to January 09, agricultural positions were in the bottom stage, with the value of the total positions of 7 major commodities slightly fluctuating around USD 55 billion, to $78 billion in May. Among them, the power of speculative funds can not be underestimated. At the beginning of February, the value of non commercial net long positions was only 3 billion US dollars, but now it has increased to 13.5 billion U.S. dollars and doubled 4 times times. "It is clear that the fund is the main force driving this wave of agricultural products. China's booming demand and the resurgence of global liquidity are the main reasons for the fund's much-hyped agricultural products.　　"Dong Shuzhi said.　　And as oil prices remain above $60 trillion and hit a peak of $80 trillion, Dong Shuzhi predicts that the concept of biofuels will revive and that the agricultural market will be driven by a second phase of growth in the biofuels concept. In contrast, the outlook for metal markets seems to be dim. May 19, the CFTC data show that the non-ferrous metal plate Long Fund 18,400 hands, short funds 37,300 hands, net bulls about 19,000 hands. This suggests that speculative funds are still shorting non-ferrous metals often, however, it is noteworthy that, since the beginning of the year, the fund has increased by 8,400 hands, and the fund bears only increased by 7,500 hands.　　It is also thought to be a signal of a reversal of the bear bull situation in the metal market.　　Race against the dollar despite the global economy still facing great uncertainty, but the optimism has permeated the whole commodity market is often under the support of these speculative funds, commodity prices are constantly hitting new highs, investment banks and advisory bodies began another round of long singing more games.　　But the vast majority of people interviewed have expressed caution enough. The head of a domestic futures company privately told reporters that she was worried: "It is clear that the current rise in the market lacks the support of the fundamentals." The demand does not come, rely on the money speculation alone, how long can the rise last? "She believes that the massive expansion of strategic oil reserves and speculative speculation in each country, is the main source of this round of oil price riseBecause。 "But the problem is that there is no corresponding increase in demand in the terminal market from related sectors such as transportation and industrial manufacturing, and the sustainability of this round of crude oil prices is questionable." "International speculators once tried to hype the concept of Chinese demand, pushing up iron ore prices." But the lies were soon uncovered, and large quantities of iron ore were not marketable in the Chinese ports.　　"Our yards are full of iron ore and are now in a quandary," said one person to the 1 Hebei Caofeidian port. In agricultural products, demand elasticity is higher than in the 2008, the concept of international speculative money speculation is mainly food crisis and biofuels. But now global food inventories are back on the line, and in addition to biofuels, agricultural demand is unlikely to grow significantly in the short term. "In this sense, if the price of oil does not go, there is limited room for food prices."　　Said the head of the futures company. "We are cautiously optimistic about the future of international and domestic grain prices." "The head of a large domestic grain and oil processing group said to reporters.　　He believes that the current rise in food prices are mainly restorative, the size of the increase depends on the consumer's psychological affordability. "Now speculative money into the commodity market, mainly as a safe haven, to avoid the depreciation of the dollar and inflation and other potential risks, in fact, in the depreciation of the race against the dollar." Faizhonghai, general manager of China Valley Futures Company, told reporters.　　Almost all industry insiders also hold this view.　　The economic stimulus package injected huge amounts of liquidity into financial institutions and the real economy, leaving people in deep economic downturns worried about inflation. With inflation and the depreciation of the dollar expected to be strong, cash for the king has become an unwise act.　　Global speculative funds have to consider entering the safe haven of commodities. An industry analyst has analyzed the mentality of these speculative funds: commodities will benefit regardless of whether the economy recovers rapidly. "If the economy is bottoming out, it will benefit from the stimulus package and the recovery of production and consumption, and it will become a hedge against risk when it is feared that the central bank's infusion of large sums of money could lead to inflation; "It is this" double insurance "that makes the global speculative capital change the portfolio and increase the bargaining chip in the commodity market. Dong Shuzhi predicts that the second half of the year will continue to pour into the commodity market, and will maintain strong shocks or slow upward patterns.