(Bloomberg) — Hedge funds reduced bullish positions on commodities for a second consecutive week as the Federal Reserve signaled it may refrain from more monetary stimulus, increasing concern that growth will slow and curb demand for raw materials.<\/p>\n
Money managers lowered net-long positions across 18 U.S. futures and options by 2.8% to 1.1 million contracts in the week ended April 3, data from the Commodity Futures Trading Commission show. Positions on higher corn prices fell to the lowest since February, while those on hogs dropped by the most since May. Speculators cut wagers on costlier crude oil for a third week, and are now the least bullish in two months.<\/p>\n
Minutes from the March 13 Fed policy meeting released April 3 showed policy makers will probably hold off on increasing monetary accommodation unless the U.S. economic expansion falters. The Standard & Poor\u2019s GSCI gauge of 24 commodities rose more than 80% from December 2008 to June 2011 as the central bank set rates at a record low and bought $2.3 trillion of debt in two rounds of quantitative easing. The U.S. economy will accelerate this quarter and the next, economist estimates compiled by Bloomberg show.<\/p>\n
\u201cThe market is addicted to stimulus,\u201d said Jeffrey Sica, the Morristown, New Jersey-based president of SICA Wealth Management who helps oversee $1 billion of assets. \u201cThis market has risen because of the liquidity push and the market will decline when it\u2019s deprived of liquidity.\u201d<\/p>\n