COT: Grains in demand as oil and gold are sold COT: Grains in demand as oil and gold are sold COT: Grains in demand as oil and gold are sold

COT: Grains in demand as oil and gold are sold

Ole Hansen

Head of Commodity Strategy

Hedge funds reduced bullish commodities bets for a second week. The modest 2% or 46k lots reduction disguised a rotation out of energy (crude oil) and metals (all) and into agriculture, not least the three major crops of soy, corn and wheat.

COT 07 May 2018

Both WTI and Brent saw long liquidation despite the ongoing support from geopolitical worries related to Trump’s May 12 decision on Iran. Some traders opted to cut longs given the potential binary outcome and the risk premium already built into the current price.

Focus this week: Crude oil’s geopolitical risk premium continues to build with traders gearing up for a worst-case scenario ahead of Trump’s Iran move. Stepping away from the 2015 nuclear deal risks raising Middle East tensions while curbing production from Opec’s third biggest producer. 

COT 07 May 2018

The stronger dollar and pre-FOMC jitters took its toll on metals, both precious and industrials. Gold’s net-long was cut by 55% to just 52k lots, the lowest since last July, while silver traders flipped their silver long straight back to a net-short. Aggressive selling was also seen in platinum while three weeks of copper buying came to halt.

Focus this week: Geopolitics with Iran sanctions and troubled Chinese trade talk providing some underlying support against the stronger dollar.  Gold has been putting up a fight against the stronger dollar with XAUEUR trading at a four-month high. Also worth some attention is the potential impact on US bond yields during and following a bumper $73 billion auction of 3-, 10- and 30-year bonds. 

COT 07 May 2018

Adverse weather conditions from South and North America to Europe continue to raise the risk of a potential troubled growing season. With this mind, funds have returned to grains and the soybeans complex and are currently holding a combined net-long in the three major crops of 335,000 lots, a seasonal four-year high.  

Focus this week: With grain prices having climbed to the highest since last August, World Agricultural Supply and Demand Estimates, due Thursday, may offer clues to how solid the foundation currently is. The US Department of Agriculture’s first outlook for the next season is expected to show a price supportive decline in global inventories for corn and wheat. 

COT 07 May 2018

Non-stop buying of cocoa extended into a 15th week while the net-long at 57k still remains below the 2013 record of 84k lots. Aggressive short covering supported Arabica Coffee for a second week as the short-term technical outlook continued to improve.

COT 07 May 2018

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
Disclaimer

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 https://www.home.saxo/en-au/legal/.

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 (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

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

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

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.