This summary highlights futures positions and changes made by speculators such as hedge funds and CTA’s across 24 major commodity futures up until last Tuesday, September 22.
A week were risk sentiment received a setback after stock markets worldwide tumbled in response to a worsening pandemic, the U.S. Congress struggling to deliver more stimulus, U.S.-China tensions and an upcoming and most likely contentious U.S. election. In response to these developments, the S&P 500 dropped by 2.5%, the dollar index reached a two-month high while steady bond yields disguised a drop in breakeven (inflation expectations) and rising real yields.
The Bloomberg Commodity Index traded lower with the stronger dollar and lower risk appetite triggering big price slumps in natural gas, silver, platinum, cocoa and coffee. Only to be partly offset by gains in crude oil, grains and sugar. Despite these developments hedge funds increased their net long across the 24 commodity futures, tracked in this report, by 6% to 1.96 million lots, highest since May 2018.
The rise in net longs was concentrated in crude oil, HG copper, soybeans, corn and sugar while the biggest reductions hit precious metals led by gold together with cocoa and coffee.