June 27 (Bloomberg) -- Commodities fell to a five-month low, extending two weeks of losses as Greek lawmakers discuss budget cuts needed to ensure a bailout loan, raising speculation of slower growth and demand for raw materials.
The Standard & Poor’s GSCI index of 24 raw materials fell 0.5 percent to 641.91 by 3:53 p.m. in London, after earlier today falling to 635.27, the lowest level since Jan. 28. Cotton was down as much as 5 percent at $1.1692, the lowest level since Dec. 1.
Greek lawmakers are debating a 78 billion-euro ($110 billion) austerity package needed before the release of a loan payment and future financing. The GSCI index is up 1.5 percent this year.
“Investors are withdrawing funds from commodities as they are afraid of a slowdown,” said John Flanagan , the president of Flanagan Trading Corp. in Fuquay-Varina, North Carolina. “People are moving away from riskier assets.”
Money managers cut their net-long positions in 18 U.S. commodities by 13 percent to 1.13 million futures and options contracts in the seven-days ended June 21, data from the Commodity Futures Trading Commission show. That’s the biggest decline since May 10.
Crude oil for August delivery declined 38 cents, or 0.4 percent, to $90.78 a barrel on the New York Mercantile Exchange. The most active contract has lost about 12 percent this month and is heading for its worst performance since May 2010 as the International Energy Agency said it’s prepared to release more stockpiles to stabilize prices, after a June 23 pledge to inject 2 million barrels a day for 30 days.
“Leading into the IEA’s decision to release stockpiles, we had a global economy that was slowing and we already had concerns over Greece,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney.
Silver for September delivery fell 68 cents to $33.95 an ounce on the Comex in New York. Copper for three-month delivery declined 3.2 cents, or 0.8 percent, to $4.083 a pound on the Comex in New York.
Wheat futures fell 1.5 percent to $6.5125 a bushel on the Chicago Board of Trade. Corn futures were little changed at $6.3175 a bushel.
--With assistance from Ann Koh in Singapore and Sharon Lindores in London. Editors: Sharon Lindores, Claudia Carpenter
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