COT: Gold short hits record, wheat long jumps on drought

Ole Hansen

Head of Commodity Strategy

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After having cut bullish commodities bets to a 13-month low during the previous eight weeks, hedge funds turned net-buyers of commodities in the week to July 24.

Net buying of WTI crude, fuel products, wheat, and live cattle more than off-set continued selling of metals.

Fund positioning

Buyers returned to Brent crude as a war of words between President Trump and Iran’s President Rouhani highlighted the continued risk of disruptions. WTI, meanwhile, was sold and including the minor CME Brent and ICE WTI contracts the combined net increase was limited to just 3,000 lots. 

Brent and WTI crude oil managed money position

Gold continued to be sold with the net-short hitting 27,156 lots, thereby exceeding the previous record from December 2015. The gross-long rose for the first time in six weeks but was more than offset by a continued extension of the gross-short, which also reached a new record of 142,100 lots.

Despite having the worst run of weekly losses since 2000, silver sellers remain reluctant. The net-short rose to 11,343 lots last week but remains well below the record of 40,177 lots from April. 

COMEX metals

Buyers returned to HG Copper but just like gold, the gross buying was more than off-set by a continued extension of the gross short, which left the net-short higher by 11% to 26,350 lots – a 22-month high.

Grains were mixed with corn and soybeans seeing another week of selling while both wheat contracts were bought. This was particularly true of CBOT wheat which jumped by 20,385 lots to 23,942 lots, a one-year high. This came as the commodity began to respond the outlook for a tightening global balance with drought continuing to reduce the outlook from key production areas in Europe and the former Soviet Union.

Fund positioning

In softs the biggest change was the 24% reduction in the cocoa net-long on a combination of long liquidation and new shorts being added.

The price has now retraced by more than 61.8% of the 60% rally seen between January and April. Coffee and sugar saw small buying before renewed BRL weakness added renewed selling pressure.


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