Commodity index net length rises to post-2008 high

NEW YORK (BestGrowthStock) – Net long index investment into commodity markets expanded by $5.7 billion to $187.4 billion in October, the highest since many major markets peaked in mid-2008, regulatory data showed on Wednesday.

But the Commodity Futures Trading Commission’s monthly report on index positions also showed short index holdings alone rose by a sizable $7.5 billion to $67.3 billion, the highest since the agency began collecting data nearly three years ago, as many investors sought more active strategies.

Long holdings alone rose to almost $255 billion, nearly the same as the end of June 2008, just as oil prices were about to touch a record high $147 a barrel and corn $7 a bushel.

The 3 percent increase in net index fund length — which does not measure inflows or outflows, only notional value — came during a month when the biggest of the indices, Standards & Poor’s GSCI index (.SPGSCI: ), rose by 3.3 percent.

The CFTC began tracking the amount of index investment in futures markets in late 2007 amid criticism that the influence of financial investors was distorting commodity markets, although many analysts have said such buy-and-hold inflows typically cause only short-term price appreciation.

(Editing by Sofina Mirza-Reid)

Commodity index net length rises to post-2008 high