Salient to Investors:

Hedge funds et al reduced net-long positions in gold futures and options by 40 percent last week, the biggest drop since July 31, 2007. Commodity bets across 18 US raw materials tumbled to the lowest since December 2011. Global holdings of gold ETPs fell by the most since August 2011.

James Dailey at TEAM Financial Asset Mgmt said talk about an exit strategy for the Fed has frightened people, and there’s a confluence of weak gold owners.

Adrian Day at Adrian Day Asset Mgmt said China’s demand for commodities will continue to support prices as it imports more energy, metals and grains.

SA Commodities said Brazil’s ports have 192 ships waiting to load 10.8 million tons of commodities versus 90 ships waiting to load 4.1 million tons a year ago.

Jeffrey Sica at Sica Wealth Mgmt said China can’t get enough to meet their demand for agriculture – despite sentiment around the funds selling off, the demand is still very much there.

Cameron Brandt at EPFR Global said money managers withdrew $828 million from commodity funds last week, while gold and precious-metals funds lost $870 million, the 7th straight week of net withdrawals.

Macquarie said world sugar output may exceed demand for a third consecutive year.

Donald Selkin at National Securities said the big crops indicate supply concerns will be lessened.

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