Login Open account
United Kingdom
Back
Manage Consent
Details Cookies
United Kingdom
Important margin product information

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Necessary
Show more
Show more
Show more
Show more
International Australia 中国大陆 België Belgique Česká republika Danmark France Hong Kong S.A.R 中國香港 Italia UAE الشرق الأوسط Nederland Norge Polska По-русски Singapore Slovenská republika Switzerland Suisse Schweiz 日本
Accept all Necessary only Manage consent Save and close Accept all
United Kingdom
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider.
Show more
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products.
Show less
background image background image background image

COT: Major switching from oil to gold and grains last week

Commodities 5 minutes to read
Ole Hansen

Head of Commodity Strategy

Summary:  Hedge funds maintained an almost unchanged exposure to 24 major commodity futures and options in the week to June 11. However, some major switches continued between the sectors.

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 June 11, click here
 
Macroeconomic uncertainties weighed on growth dependent commodities from energy to industrial metals while at the same time supporting another strong week of gold buying. No letup in the deteriorating outlook for US crop production resulted in another across-the-board buying of CBOT grains and oilseeds futures.  
Seven consecutive weeks of selling has now reduced the combined long in Brent and WTI crude oil by 41% to 421k lots, a near four-month low.  This before the tanker attacks in the Gulf of Oman briefly boosted prices before being capped again on demand fears and another counter seasonal rise in US crude oil stocks. Monthly oil market reports from the Energy Information Administration, Opec and the International Energy Agency all showed another downgrade to world oil demand while non-Opec supply growth was kept stable.

From a technical perspective the dwindling long and increased short positions have left the market exposed to an upside move should the situation in the Middle East deteriorate further. On the other hand the failure to break higher last week amid the evidence of Iranian involvement could indicate that further losses can be seen should the situation stabilise. In Brent the levels in our opinion to look out are currently $59.50/b to the downside and $64.50/b to the upside. 
Gold needs to break above its wall of resistance soon in order to avoid a pullback from recently established longs getting nervous. This after having seen funds buy a record 124k lots during a two-week period to June 11 with most of that probably bought above $1,320/oz. On that basis we are now witnessing a battle between strategic buyers versus tactical short sellers. A draw between the two is likely to be seen as long gold stays within a $1,320/oz to $1,358/oz range.  

The biggest short-term risks to gold bulls are the potential for the US Federal Open Market Committee proving unwilling to meet the market’s expectations for aggressive rate cuts leading to a stronger dollar and/or a surprise trade deal announcement when Trump and Xi meet at the G20 in Osaka June 28-29. The silver net-short meanwhile was cut by 57% to 8.5k lots with the market struggling to get exited about the white metal despite trading at the lowest level to gold in 26 years. 
Growth concerns, not least in the US and China, drove another increase in the HG copper net-short to a fresh record of 52k lots. Short-sellers are looking for weakness to extend further on a break below $2.6/lb while some short-covering may emerge above $2.7/lb. 
Buying of the three major crops extended into a fourth week albeit at a slower pace than previously.  The corn net-long reached 111k lots, a six-month high, following an historical turnaround in production prospects during the past month. Funds who held a record short back in April are now accumulating longs in the belief that the outlook will continued to deteriorate.

Quarterly Outlook Q1 2023: The models are broken

  • The models are broken

    The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.

    Steen Jakobsen,
    Chief Investment Officer

    Read article

  • Refitting China’s broken growth engine

    A political switch in China towards less tough control of its people and companies may kick things back into gear.

    Redmond Wong,
    Market Strategist

    Read article

  • Broken Europe

    While the economic situation in Europe may not be as bad as feared, there's still a plethora of things to fix.

    Chris Dembik,
    Head of Macroeconomic Research

    Read article

  • A painful phase transition

    As the world turns increasingly bipolar, equity markets face harsh times as they transition into the new reality.

    Peter Garnry,
    Head of Equity Strategy

    Read article

  • Opportunities in a deglobalising world

    New alliances and collaborations outside of China may lead to prosperous times in Asia.

    Charu Chanana,
    Market Strategist

    Read article

  • Is the ‘balanced’ 60/40 equity/bond portfolio a thing of the past?

    For years, it was thought that the balanced portfolio was a thing of the past. But recent developments may have changed that.

    Peter Siks,
    Investment Coach

    Read article

  • China reopening will drive another strong year for commodities

    Following a dramatic and volatile 2022 with good returns, a lot of this year's commodity performance may be driven by Chinese politics.

    Ole S. Hansen,
    Head of Commodity Strategy

    Read article

  • Latecomers to tightening party, EUR and JPY, may prove safest harbours in the first half

    2023 could be a tough year for currencies but EUR and JPY may have some upside.

    John J. Hardy,
    Head of FX Strategy

    Read article

  • China reopening a boon to Australian assets?

    The commodity-heavy Australian market may have a good start to 2023, as the Chinese focus on growth signals demand for Aussie resources.

    Jessica Amir,
    Market Strategist

    Read article

  • Can institutions save crypto before retail vanishes?

    From a near-perfect environment for speculative assets before 2022 to the opposite, crypto faces fundamental challenges.

    Mads Eberhardt,
    Cryptocurrency Analyst

    Read article

Disclaimer

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 (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Support Centre
For existing clients, please click here to request support via the Support Centre.

Have a question about our products, platforms or services? Visit the Support Centre to find answers for our most frequently asked questions. If you are still unable to locate an answer to your question, you will also find contact details for your local Saxo office to speak with a representative.

Contact Saxo

Select region

United Kingdom
United Kingdom
Products & pricing
Platforms
Accounts & service
General
Other
Legal

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, or any of our other products work, and whether you can afford to take the high risk of losing your money. The value of your investments can go down as well as up. Losses can exceed deposits on some margin products. Professional clients can lose more than they deposit. All trading carries risk.

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

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. Android is a trademark of Google Inc.