Federal Reserve Bank of New York President William C. Dudley and Fed Vice Chairman Janet Yellen endorsed the central bank's view last week that borrowing costs are likely to stay low through late 2014. Speaking in New York on April 11, Yellen said she considers "a highly accommodative policy stance to be appropriate in present circumstances."

Even without additional monetary easing, low interest rates and other existing policies will help support demand for commodities in the second half of the year, said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based consultant.

'Awash In Liquidity'

"The world is awash in liquidity," said Schenker, who was the third-most accurate forecaster for industrial metals in Bloomberg Rankings the past eight quarters. "You've got a bunch of hammers out there looking for some nails. People need to put this money somewhere."

Investors pulled $636.2 million from commodity funds in the week ended April 11, the most since early January, according to Brad Durham, a managing director at Cambridge, Massachusetts- based EPFR Global, which tracks money flows. Gold and precious metals outflows totaled $290.3 million, the biggest exit since Dec. 28, he said.

Fed Minutes

Minutes from the Fed's March policy meeting, which were released on April 3, showed policy makers will probably hold off increasing monetary accommodation unless the U.S. economic expansion falters. Crude oil, copper, nickel and cotton may decline "in the absence of further injections" of stimulus measures, UBS analysts led by Hong Kong-based Peter Hickson said in the report April 12.

Goldman Sachs Group Inc.'s commodity research team, led by Jeffrey Currie in London, cut its three-month recommendation on raw materials to "neutral" on March 28, saying that the economy will "soften" this quarter.

Money managers reduced their bullish bets on copper by 15,687 contracts to 2,955 as of April 10, the CFTC data show. That's the lowest since funds were net-short, or betting on declines, in January.

The value of Chinese homes sold dropped 18 percent in the first three months of the year, the government reported April 13. Construction generates about 40 percent of demand for the metal, according to the Copper Development Association. Stockpiles monitored by the Shanghai Futures Exchange rose to the highest since at least 2003 on March 15 and have more than doubled this year.

Farm Bets

A measure of 11 U.S. farm goods showed speculators lowered wagers on a rally for agricultural commodities by 4.9 percent to 669,280. Holdings fell for a third week, the longest slump since December. Speculators have a net-short position of 2,561 contracts in cotton, compared with net-long bets of 7,296 contracts a week earlier.