COT: Crude length cut to near pandemic low

This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to last Tuesday, June 27. A week that overall saw small losses in stocks, an unchanged dollar and rising bond yields after a flurry of economic data showed surprise strength across the US economy, raising the prospect for higher Fed funds rates while further delaying any likelihood of recession. The commodity sector meanwhile took a hit with all the major sectors seeing lower prices amid ongoing demand concerns, not least from China, the world’s top consumer of raw materials. 

Commodity sector:

In the week to June 27, the Bloomberg Commodity Index dropped 2.3%, thereby reversing a similar gain during the previous reporting week. Losses were broad and led by agricultural commodities from sugar to corn and coffee, with energy, precious and industrial metals also seeing weaker price action. 

Speculators, responding to these latest developments by cutting exposure across 15 of the 24 major futures contracts tracked in this. Selling was heaviest in crude oil with gold, platinum and most soft commodities also seeing net selling. Despite trading lower on the week, the grains sector continued to see net buying as speculators scrambled to rebuild positions in response to early June strength, a focus that saw them fail respond to emerging price weakness as the attention turn from drought to the prospect for beneficial rains across key US growing areas.