Speculators increased their bullish commodity wagers for the first time since November as signs of accelerating growth in China and the U.S. drove prices higher for a fourth consecutive week.

Hedge funds and other money managers raised their net-long positions across 18 U.S. futures and options by 2.4 percent to 691,832 contracts in the week ended Dec. 31, the first gain since Nov. 27, U.S. Commodity Futures Trading Commission data show.

Cotton holdings climbed to the highest since September 2011, and those for sugar reached a nine-week high. Gold wagers rose for the first time in three weeks.

The Standard & Poor’s GSCI gauge of 24 raw materials rebounded 3.8 percent since reaching a three-month low on Nov. 5. China’s manufacturing unexpectedly expanded at the fastest pace in 19 months in December, a private survey showed Dec. 31. The U.S. added more jobs than forecast last month, capping a third year of rising payrolls, the government said Jan. 4.

“In 2012, we had a lot of liquidating by hedge funds, but there’s an incentive to reverse that because of growth in emerging markets and especially China,” said Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management in Seattle, which oversees about $111 billion of assets. “It’s going to be a good year for commodities.”

Commodities Rally
The final reading of a Chinese Purchasing Managers’ Index was 51.5 in December, figures from HSBC Holdings Plc and Markit Economics showed. That compares with 50.5 in November, and the median forecast of 14 economists surveyed by Bloomberg was for a reading of 50.9. A level above 50 indicates expansion. China will accelerate for at least the next six months, the median of estimates from 33 economists compiled by Bloomberg show.

U.S. payrolls rose by 155,000 workers last month, topping analysts’ projection of 152,000, the Labor Department said. For all of 2012, the economy created 1.84 million jobs, matching the gain in 2011 in the best back-to-back growth since 2005-2006. Service industries, which make up almost 90 percent of the economy, expanded at the fastest pace in 10 months, an index from the Institute for Supply Management showed Jan. 4.

The “acute phase” of the global economic slowdown may be ending, boosting prospects for commodities, Credit Suisse Group AG analysts led by New York-based Ric Deverell wrote in a report Jan. 3.

Spending Cuts
An end to central-bank stimulus would probably mean lower commodity prices, said Stanley Crouch, who helps oversee $2 billion of assets as chief investment officer at New York-based Aegis Capital Corp.

Several Federal Reserve officials said it would “probably be appropriate to slow or stop” the central bank’s $85 billion monthly bond-buying program sometime this year, according to minutes of December policy meeting released Jan. 3.

“Fed stimulus has been tremendously important for commodities prices, and people are selling with the perception that it’s coming to an end,” said Donald Selkin, the New York- based chief market strategist at National Securities Corp., which manages about $3 billion of assets. “Spending cuts and the debt-ceiling debate are another factor that’s weighing on the outlook.”

Money managers added $839 million to commodity funds in the week ended Jan. 2, said Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Inflows to gold and precious-metals funds totaled $612 million, he said.

Bullish Cotton
Bullish wagers on raw sugar jumped 34 percent to 25,496 contracts, the highest level since Oct. 30. A measure of net- longs for 11 U.S. farm goods slid 2.8 percent to 390,996 contracts, the CFTC data show. Bullish cotton bets climbed 12 percent to 28,821 contracts.

“Given the expectation for easy money and currency devaluation and the recovery in economic growth worldwide, the outlook is good for commodity prices,” said Michael Cuggino, who manages about $17 billion of assets at San Francisco-based Pacific Heights Asset Management. “Liquidity is still increasing and the devaluation of currencies is increasing, and that’s bullish for commodities.”