Energy: Instead of adding fresh longs as crude oil rallied to a seven year high, speculators instead cut their net long for a third consecutive week. A decision probably driven by a loss of momentum as the market focused on the prospect for an Iranian deal, as well as elevated volatility across other assets forcing a broad reduction in exposure. During the past three weeks, an +8% rally in crude oil up until last Tuesday triggered a 5k lot increase in the gross short to 102k lots (One lot equals 1000 barrels) while profit taking reduced the gross long by 35k lots to 621k lots. Other major changes was a 30% reduction in the NY Harbor ULSD Diesel long while the the 11% collapse in natural gas only attracted a 5% reduction driven by fresh short selling.
Metals: Speculators continued to chase the recent volatile price action in gold, and following a 55k reduction the previous week after the hawkish FOMC meeting, the net long rose 22k lots to 85k lots (One lot equals 100 ounces) on a combination of fresh longs and short covering. Gold’s relative big price swings within an established range tends to be an unprofitable period for many leveraged funds as they are constantly forced to adjust positions amid a constant changing technical outlook. In addition, correlation tracking trading ideas continue to suffer with golds ability to withstand surging real yields forcing short covering.
Silver’s near 3% rally triggered some additional long liquidation with the net falling to 10k lots, a two-month low. Steady trading copper which was about to attempt another (failed) upside breakout attempt was bought to the tune of 5.5k lots lifting the net long to 24.8k lots, still some 73% below the record long interest from October 2020.
Agriculture: The grains sector was mixed with continued buying of soybeans lifting the net to a nine-month high at 166k lots, being more than offset by selling of corn and wheat, the latter seeing an increase in the net short to 29k lots, the most bearish since July 2020. In softs, the sugar long was cut to a fresh 20 month low, the cocoa long jumped 130% to 34.2k while a renewed rally in coffee lifted the net long by 8% to 56k lots.