ETFS – Agriculture ETPs See Largest Inflows in 18 Weeks as Prices Decline

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The Greek government survived its latest test, with its revamped austerity package passing on a slim majority. While it appears that July and August debt payments will  … 

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            now be able to be made with the help of the IMF and EU, social unrest is escalating and the medium-term outlook remains bleak. The boost in sentiment from the Greek package and rise in the US ISM, caused investors to increase long positions in agriculture, energy and industrial metals and cut holdings of gold. This week US payroll numbers on Friday will provide crucial clues to whether the “soft patch” in growth is truly over.

            ETFS Agriculture ETPs see largest inflows in 18 weeks on the  back of sharp price declines.  Investors appear to view the  recent decline in key agriculture prices as an opportunity to boost exposure to the sector, adding $32mn into ETF Securities long agriculture ETPs. ETFS Agriculture (AIGA) received over $22mn last week, the largest net weekly inflows in 18 weeks. Wheat ETPs also aw strong inflows on the back of large price declines, with investors adding a total of $15mn into ETFS Leveraged Wheat (LWEA) and ETFS Wheat (WEAT). Last week’s USDA WASDE report indicated better than expected planting and inventories for corn and wheat, driving prices sharply lower. 

            Physically-backed gold ETCs see first net outflows  in five weeks, silver ETPs continue to see gradual inflows.
            The Greek parliament managed to squeeze its austerity budget  through last week, paving the way for new bailout funds sufficient to get the country through its July and August debt payments. The improved sentiment from this and the bounce in the US ISM prompted some investors to reduce their long gold positions, with ETF Securities seeing net outflows of $35.1mn from its gold ETPs over the week. This compares to around $200mn of inflows in the first three weeks of June. Physically-backed silver ETPs continue to  see modest but consistent weekly inflows, with $73mn received over the past seven weeks, a rebound from the COMEX margin hike-driven rout of May.

            Investors boost long positions natural gas ETCs as  prices decline.
            Natural gas remains a firm favourite for investors, despite choppy trading and an abundance of supply in US gas markets. Investors added over $40mn to natural gas exposures last week, with ETFS Leveraged Natural gas receiving the majority – $34.6mn. Natural gas storage levels are hovering near the middle of the fiveyear range and are expected to trend higher on a seasonal basis. Ongoing uncertainty over IEA supplies in oil markets appears to be driving investors to look elsewhere within the energy space for opportunities. Oil ETCs experienced moderate outflows of $8.5mn as oil prices trended higher on the back of a weaker USD. 

            Source: ETFWorld – ETF Securities Commodity ETP Weekly


            – Valuesabove100% indicatean above average turnover compared to either the prior 30 trading days or the prior 260 trading days.

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