COT: Brent long vulnerable after buyers defy the charts COT: Brent long vulnerable after buyers defy the charts COT: Brent long vulnerable after buyers defy the charts

COT: Brent long vulnerable after buyers defy the charts

Commodities 5 minutes to read
Ole Hansen

Head of Commodity Strategy

Summary:  Agricultural commodities led the broader commodities sector to a seven-week positioning low in the week to April 30.

Saxo Bank publishes two weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial.

To download your copy of the Commitment of Traders: Commodity report for the week ending April 30, click here.

Hedge funds cut bullish bets on rising commodity prices to 367k lots, a seven-week low, in the week to April 30. Selling was broad-based with 16 out of the 24 major futures contracts tracked in this report being sold. Apart from WTI crude oil and natural gas, the biggest casualties – again – were found among the agricultural commodities, particularly soybeans, wheat, sugar and live cattle.   

Fund positioning
Despite the first weekly price drop in five weeks and an ugly, bearish weekly candle, Brent crude continued to be bought with the rising backwardation attracting buyers amid supporting fundamentals. WTI bulls, meanwhile, backed off and cut longs for the first time in 10 weeks ahead of weekly EIA data that showed record US production and stocks at their highest level since September 2017.

The continued drop in crude oil prices since the aforementioned weekly bar on April 26 has accelerated today in response to Trump’s renewed threat to hike tariffs on Chinese imports. The market has been pricing in a good deal since January, and with two tweets yesterday the president risked jeopardising the talks that were expected to step up a gear this Wednesday when a 100-strong Chinese delegation arrives in Washington. 

The tight and price-supportive fundamental outlook has not gone away but the lack of long liquidation last week has left the market exposed in the short-term. So far today, Brent crude oil has managed to bounce off the 50- and 200-day moving averages, both just above $69.20/barrel.
Crude oil
Weak natural gas prices are hovering just above key support due to massive supply gains as mild weather helped send the net-long to a three-year low of 46k lots.

The hedge fund short in HG copper expanded to a 12-week high at 10k lots ahead of the weak US/China PMI slump on May 1. The platinum net-long remained the largest among the metals at 22k lots
Gold, meanwhile, was bought to the tune of 33k lots, making the second-biggest week of buying this year. The move returned the position to a net-long and highlights the continued struggle for direction with a rising dollar and stocks being countered by central bank demand and a patient Federal Reserve.
The grains sector remained under pressure with the combined net-short in wheat, corn and soybeans reaching a fresh record of 539k lots, some 488k lots higher than the seasonal five-year average. Soybeans struggled amid slowing demand from China due to trade war and the continued culling of millions of pigs due to the swine fever outbreak. 

Corn, which remains by far the most sold of the agricultural commodities, found some support from rain-delayed planting which could force some farmers to switch to later-planted soybeans. Kansas wheat hit a fresh record short as the price dropped below $4/bu to challenge the lowest levels since 2006. 
Agricultural commodities
What is the Commitments of Traders report?

The Commitments of Traders (COT) report is issued by the US Commodity Futures Trading Commission (CFTC) every Friday at 15:30 EST with data from the week ending the previous Tuesday. The report breaks down the open interest across major futures markets from bonds, stock index, currencies and commodities. The ICE Futures Europe Exchange issues a similar report, also on Fridays, covering Brent crude oil and gas oil.

In commodities, the open interest is broken into the following categories: Producer/Merchant/Processor/User; Swap Dealers; Managed Money and other.

In financials the categories are Dealer/Intermediary; Asset Manager/Institutional; Managed Money and other.

Our focus is primarily on the behaviour of Managed Money traders such as commodity trading advisors (CTA), commodity pool operators (CPO), and unregistered funds.

They are likely to have tight stops and no underlying exposure that is being hedged. This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.