COT report: Record-low WTI longs, firm gold demand, grains sink ahead of WASDE

The Bloomberg Commodity Index (BCOM) slipped 0.5% in the latest reporting week, partly reversing the prior week’s 2.5% surge. Losses were broad-based across sectors, only partly cushioned by isolated strength in natural gas, gold, coffee, and soybean meal. A weak US jobs report, effectively sealing expectations for a Fed rate cut this week, alongside geopolitical tensions, lent support to gold. In contrast, growth-sensitive commodities struggled: crude oil, fuel products, and industrial metals led the declines, while silver and platinum also pulled back given their part reliance on industrial demand.

The grains sector faced renewed selling pressure ahead of Friday’s WASDE report, which ultimately proved bearish. The USDA unexpectedly lifted its outlook for US corn and soybean output, while global wheat stocks are now projected to rise for the first time in six years on the back of a larger-than-expected global harvest. A late rally in soybean prices on Friday was partly unwound after reports of Chinese buying turned out to be a delayed accounting of a deal concluded earlier in the year.

Energy:

Speculators slashed exposure in crude. The WTI net long collapsed to a record low of just 12.7k contracts - breaking the prior trough from 2006 - while the Brent net long was cut 17% to 210k. Adding to this a 37.6k contract short in the ICE WTI contract - often used to trade spreads against Brent - the speculative long fell to 185k contracts, close to record-low exposure. This positioning underlines the market’s concern that a budding supply glut could push prices lower. At the same time, it leaves the market dangerously skewed: any bullish shift in fundamentals or technicals could spark a sharp short-covering rally that overshoots the underlying balance. By contrast, diesel tightness drove the gasoil net long to a 3½-year high of 107k contracts.

Metals:

Gold’s record-setting rally prompted light long liquidation, while silver and platinum—both with dual industrial and investment roles—saw heavier outflows. Platinum in particular endured a 26% cut in its net long, amplified by fresh short selling. HG copper posted a fifth straight week of net buying, lifting the net long to an 11-month high of 38k contracts, underscoring renewed optimism despite wider macro headwinds.

Agriculture:

Broad selling continued across grains, adding to pressure ahead of the WASDE. Soybeans flipped back into a net short, corn shorts expanded 9% to 100k contracts, and wheat—net short since July 2022—slid deeper to 92k. Sugar was the week’s standout move: speculators increased bearish bets by 41%, sending the net short to nearly 153k contracts, its highest in six years.