COT: Commodity specs jump ship on recession angst COT: Commodity specs jump ship on recession angst COT: Commodity specs jump ship on recession angst

COT: Commodity specs jump ship on recession angst

Ole Hansen

Head of Commodity Strategy

Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to June 21. A week where central bank rate hikes and weak economic data helped drive the market focus towards the risk of recession, and with that worries about demand for key commodities. Developments that helped trigger long liquidation in energy and grains together with additional short selling in copper. Precious metals meanwhile attracted fresh buying after the dollar and bond yields both dropped

Saxo Bank publishes 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.

This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to June 21. A week that followed the post-FOMC rate hike and weaker than expected economic data helped steer the market focus towards the looming risk of an economic slowdown, and in a worst-case recession. The result of these worries being a sharp reversal in US ten-year treasury yields and a weaker dollar both after hitting multi-year highs. 

Worries about growth and with that demand for commodities helped trigger long liquidation in energy and grains together with additional short selling in copper. Precious metals meanwhile attracted buyers in response to the weakness mentioned in yields and the dollar. 

The commodity sector extended its decline during the reporting week with Bloomberg Commodity Spot index declining 2.1% with losses led by energy and the grain sectors. 

Overall, the total net long across the 24 commodity futures tracked in this slipped 5% to a 22-month low at 1.5 million lots, with the biggest reductions seen in WTI crude oil, natural gas, grains and sugar. 

Note, the table below does not include delayed data from the ICE Europe Exchange on Brent and Gas oil

Energy: WTI crude oil sold off nearly 6% during the week to June 21 and in response Managed Money accounts liquidated 29k lots of net longs ($3.5 billion notional). It was the biggest week of long liquidation since last November and it reduced the net long to a 26-month low at 234k lots. Small reductions were seen in diesel and gasoline while the natural gas long across four Henry Hub deliverable futures and swap contracts slumped 44% to 19k lots, and lowest since March 2020.

Metals: Gold and silver accounted for the bulk of the net buying across the commodity sector last week as recession worries helped boost prices. Aggressive selling the previous week was reversed with the gold net long rising 25% to 61.8k lots and silver 333% to 6k lots, both primarily driven by short covering. The HG copper net short more than doubled to 16k lots just before the price broke below $3.95 per pound, a key level that had been providing support for the past 15 months. 

Agriculture: The grains sector saw broad selling after the Bloomberg Grains Index dropped 5% to a four-month low. Net selling of all three major crops drove the combined long across the six contracts tracked in this down by 32k lots to 567k lots, a five-month low, and down 31% from the April peak. In softs, sugar selling extended to a fourth week with the net long declining by 20k to 116.5k lots. Cotton, a recession-shy contract, saw long liquidation after falling by 5.6%. In the days that followed last Tuesday the December contract lost another 15%, which undoubtedly would have hurt a market which for many weeks had a very elevated long-short ratio, most recently at 27 longs per each short. A situation that often triggers outsized reactions to a change in the prevailing trend, in this case given the lack of short positions to meet the pressure from longs trying to get out. 

Broad dollar weakness following the +3% jump the previous week slowed but did not stop continued speculative dollar accumulation in the week to June 21. Once again led by continued shorting of euros, albeit at a much slower pace than the record pace recorded in the previous week. In addition, long liquidation of recently established CAD longs helped offset small buying of NZD, AUD, GBP and not least JPY, the latter seeing short covering extend to a sixth week. Despite hitting a multi decade high speculators have become wary of the yen’s rapid demise and with bond yield spreads narrowing as recession fears sink yields elsewhere, the risk of further yen strength has so far led to a 47% reduction in the net short to 58k lots, a 15-week low.

Overall, these changes saw the dollar long against ten IMM futures rise by 8% to $20.3 billion, a four-week high.

What is the Commitments of Traders report?

The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class.

Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and other
Financials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and other
Forex: A broad breakdown between commercial and non-commercial (speculators)

The reasons why we focus primarily on the behavior of the highlighted groups are:

  • 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


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


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.