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WASHINGTON (Reuters) – Funds that buy commodities futures for long-term investment do help to raise prices, with news last year that an institutional investor would be plowing billions of dollars in commodities sparking the recent bull run in crude oil, a USDA conference was told Thursday. He was adding his voice to the debate on whether managed money, including index and speculative funds, were responsible for the sharp gains in commodities prices last year. Funds turned to commodities over the past few years as they diversified their portfolios away from stocks and bonds, with their entry coinciding with prices for many commodities like oil, gold, copper, grains and cotton hitting record highs. Gregory Kuserk, deputy director for market surveillance at the Commodity Futures Trading Commission, which regulates the futures industry, said the ‘buy and hold’ strategies of index funds that build long-term positions are often transparent. He said these funds do not hold positions in the cash markets and therefore cannot squeeze the futures market to make money from the positions of other investors. read more

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