Commodities 5 minutes to read

COT: Record corn buying in a week of oil and gold selling

Ole Hansen

Head of Commodity Strategy

Summary:  Weak data, a strong US dollar and trade war uncertainty saw the commodities focus shift from supply constraints to demand concerns in the week ending May 21.


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 May 21, click here.

Hedge funds sold energy and metals during the week to May 21 as weak economic data, a stronger dollar and the US-China trade war forced a change in the focus from supply constraints to worries about demand. The most significant casualties were WTI crude (-23k), gold (-42k), silver (-16k) and sugar (-30k) while demand was seen in wheat (+37) and particularly corn (+166k), which saw a record week of buying. 
The three key crops witnessed the biggest week of buying (+219k lots) in almost two years as wet weather continued to delay planting of corn while raising concerns about wheat quality. The 166k-lot reduction in the corn net-short was the biggest weekly change on record.

Click here for the latest update on grains.
WTI selling (-23k lots) extended into a fourth week ahead of the weekly inventory jump which added further downside pressure to the price. Brent crude meanwhile was also sold but the small, 4k-lot reduction highlighted the limited selling appetite amid current tightness and geopolitical worries. From their recent peaks, WTI longs have now been cut by 77k lots while Brent has only witnessed a 12k-lot reduction.

Click here for the latest update on crude oil. 

Gold’s frustrating lack of response to weaker stocks and lower bond yields helped trigger a 42k reduction in the net-long, more or less what was added the previous week. The silver net-short doubled to 31k lots, a six-months high.

Click here for the latest update discussing the current developments in gold.

In soft commodities, both sugar and cotton hit fresh record shorts before the latter jumped by the most since July. Coffee was bought before posting the biggest weekly gain in seven months on weather concerns and a stronger BRL. 

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.
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