Funds Back Out of Commodities

Bloomberg, via Ritholtz:

Investors cut wagers on a rally in commodities by the most since November as signs of improving U.S. growth reduced demand for gold and rains in South America added to signs that crop harvests will be bigger.
Hedge funds and other large speculators reduced net-long positions across 18 U.S. futures and options in the week ended Feb. 12 by 15 percent to 757,060 contracts, the largest decline since Nov. 13, U.S. Commodity Futures Trading Commission data show. Bets on higher gold prices fell to the lowest since December 2008, while a measure for 11 farm goods slumped the most since November 2011..... Combined soybean production in Argentina and Brazil will increase to a record and rising output of corn will help replenish global inventories after drought last year sent prices of both crops to a record.
“As confidence is building in an economic recovery that’s sustainable globally, you could lose a bid to gold,” said James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $325 billion of assets. “Agricultural commodities to me are going to have a pullback year as weather normalizes.”

That sounds like it could be bad news for farmers paying $400 an acre in cash rent, or buying farm ground for $9000 an acre.  If the western corn belt has good crops this year, things could get really ugly.