"Many institutional investors had a bad experience from 2010 to 2015 and their re-entry is likely to be slow and measured, however improving fundamentals do mean the sector is attracting attention again," said David Lilley, co-founder of Red Kite Group in London, one of the biggest commodity hedge funds.
Some computer models also suggest the rally has room to run.
Tom Dering, a New York-based portfolio manager at Chesapeake Capital, which oversees $220 million, said his firm’s algorithm is flashing that it’s time to bet on more gains.
“We’ve definitely seen the shift to the long side in commodities,” Dering said in a phone interview. “We’re long base metals for a while now, like copper. We’re starting to get signals to go long on most of the products in the grain markets that we were either short last year or neutral.”
This article was provided by Bloomberg News.