To find yourself friendless just say, ‘I’m a commodity bull’

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The commodity bull market seemed to be under attack from all sides Tuesday, triggering a broad retreat in prices.

But considering the big guns aimed at the market, the losses were fairly modest. The Reuters/CRB index of 19 commodities fell 1.4%. Oil was one of the more serious casualties, off 2.7% to $124.31 a barrel in futures trading.

Under political pressure to corral investors and speculators who have been accused of helping to drive prices of grain (among other commodities) to record highs, the Commodity Futures Trading Commission announced that it would require certain investors to disclose more information about their holdings in ag markets.

‘We want to encourage access to markets, but we want to be sure too much money isn’t distorting markets artificially,’ acting CFTC Chairman Walter Lukken told reporters in a conference call. More on the CFTC’s announcement here.

Still ongoing: the agency’s six-month-old probe of oil-futures trading, which was just publicly disclosed last week.

Meanwhile, the Senate Committee on Commerce, Science and Transportation held a hearing Tuesday on possible energy-market manipulation. Investment legend George Soros, head of Soros Fund Management, was called as a witness because of his ‘life-long study of bubbles’ (his words).

His conclusion about the oil market: Fundamental demand is driving prices, but institutional investors in commodities (such as pension funds) ‘reinforce the upward pressure on prices.’

Said Soros: ‘I find commodity index buying eerily reminiscent of a similar craze for ‘portfolio insurance’ which led to the stock market crash of 1987. In both cases institutions are piling in on one side of the market and they have sufficent weight to unbalance it.’

Nonetheless, he said he wasn’t predicting an ‘imminent’ crash in oil prices.

Finally, Federal Reserve Chairman Ben S. Bernanke helped undermine commodity markets by appearing to draw a line in the sand on the dollar’s long slide. I explain here, but in a nutshell, a weaker dollar would help boost commodity prices, while a stronger buck would be a drag on prices.