Fund managers' lust for commodities is at its greatest for at least four years, as the "nagging worry" of inflation prompts them to seek assets offering protection against price rises.

The finding of a BoA Merrill Lynch survey came as commodities again opened firm in Chicago, continuing a rally which traders believe is being fuelled by funds, although prices faded in later deals as buying dried up.

The survey showed that the proportion of investment managers overweight in commodities has risen to its highest since the poll started asking about the asset class in 2005.

The reading - which represents a sharp turnaround from a year ago, when appetite for commodities slumped to a survey low � reflects inflation's move "back on investor radar screens", said the bank, which polled 218 investors managing $534bn.

'Hedging risk' 

"The trend for higher global growth expectations� is now prompting some concerns on the inflation outlook," BoA Merrill Lynch said.

"The commodity story gained traction."

The appeal of the asset class was also evident in equity allocations, with investors in developing country shares switching to "commodity-sensitive markets" such as China and Russia.

Michael Hartnett, a bank chief global equity strategist and one of the authors of the survey report, said: "Investors see inflation as a greater risk than deflation, and are hedging that risk with overweight positions in emerging markets and commodities."

Losing asset classes included bonds, to which fund managers attributed their lowest weightings since April last year.

Wheat 'way overpriced' 

The report co-incided with a rise of more than 1% in the main Chicago crops in early live deals on Wednesday, with January soybeans up 17 cents at $10.46 � a bushel.

"The funds and outside trading community continues to pour into the commodity market," US Commodities, the US broker, said.

Vic Lespinasse, the GrainAnalyst.com analyst, said that it was "difficult" to explain crops' growing popularity on fundamental reasons.

"US wheat, for example, is way overpriced compared with other countries yet it keeps rocketing higher," he said.