The Brent crude oil net long jumped by 39% to 180,610 lots (180.6 million barrels) on a combination of fresh longs and short covering as the market began pre-empting a more sustained recovery in oil demand into 2021. However, while longs build the price traded unchanged with the short-term demand outlook still challenged by renewed lockdowns and drop in mobility.
Precious metals saw renewed buying with gold once again finding support ahead of key support at $1850/oz. The net long rose by 10% to 122k after hitting a 17 month low the previous week when the Pfizer/BioNTech news sent prices sharply lower. Platinum bulls responded to the 5% price increase by lifting the net long to 6k lots, a nine week high but well below the 53,000 lots peak from January.
The agriculture sector was mixed with profit taking hitting the grains sector led by soybeans and wheat. The soft sector meanwhile saw strong buying with sugar and coffee prices rising in response to a stronger BRL and drought raising supply concerns. Cocoa traders meanwhile responded to an abrupt turnaround by returning to a net long. The reason behind the near 15% rally last week was described in Friday’s Weekly Commodity Update.
Despite trading lower, speculators still cut bearish dollar bets to a four month low in the week to November 17. The short against ten IMM currency futures and the Dollar Index was cut by $1.5 billion to $22.5 billion with the main contributor being a 29% reduction in the JPY long from a four-year high. Together with light selling of EUR, CHF and GBP these changes more than offset buying of CAD, AUD, NZD and MXN.