Just as managed futures were starting to gain back some steam (see week in review here) with “risk on” long positions in energies, metals, stock indices, and currencies;  Goldman Sachs goes and messes everything up with comments that they are exiting their long commodity trade…. (sure would be nice to be their prop desk and trade ahead of their comments, as there is no ‘insider trading’ in commodities)

We’re seeing losses almost across the board, with wheat, corn, palladium, soybeans, soybean oil and crude oil leading the charge downward, and only flight to quality instruments (plus pork bellies and cocoa, oddly enough, positive on the day) higher. None quite closed limit down, though corn played with the idea several times before rallying back.

We’ve been wondering when a correction would come to surging commodity prices for awhile now (check out our most recent post on it here), and continue to believe that an extended sell off for commodities would be good for managed futures.

But for now, the slump seems to have caught the bulk of the programs we follow off guard, with most either retaining some of the long positions they had before the March sell off, or new long positions entered into on the subsequent rebound off the March lows.

Of the CTAs we follow, spread trader Emil Van Essen is short back dated corn and crude spreads; systematic multi-market program Blue Fin Capital is short crude; and short-term multi-market Accela Short term is short wheat… and that’s it. You can be sure they’re hoping the correction sticks around long enough to be of benefit to them.