COT: Dollar short and commodity longs cut on U.S. yield spike COT: Dollar short and commodity longs cut on U.S. yield spike COT: Dollar short and commodity longs cut on U.S. yield spike

COT: Dollar short and commodity longs cut on U.S. yield spike

Ole Hansen

Head of Commodity Strategy

Summary:  Futures positions held and changes made by hedge funds across commodities, forex, bonds and stock indices up until last Tuesday, March 2. The period included the February 25 wash-out in bonds that saw US ten-year yields and the dollar jump while stocks and commodities traded lower on rising deleveraging risks. As a result hedge funds made their biggest one-week reduction in bullish commodity bets since mid-November

Saxo Bank publishes 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.

The below summary highlights futures positions and changes made by hedge funds across commodities, forex, bonds and stock indices up until last Tuesday, March 2. The period included the February 25 wash-out in bonds that saw US ten-year yields jump to 1.61% in response to muted demand at a seven-year auction. The move saw equities tumble as higher borrowing costs made it harder to justify soaring valuations while the dollar bulldozed most of its peers rising to near a three-month high. Commodities traded lower and despite current strong fundamentals, the market worried rising bond yields could trigger a reduction in the near record speculative long held by funds.   


Speculators made their biggest one-week reduction in bullish commodity bets since mid-November. Despite reflation focus and strengthening fundamentals the bond market rout and a stronger dollar led to fresh concerns that deleveraging could spread to commodities. The total net long across 26 major commodity futures was cut by 4% to 2.7 million lots, representing a nominal value of $132.3 billion.

All but a handful of contracts were sold with the biggest reduction hitting gold, soybeans and corn while the most noticeable buying interest benefitted cocoa and wheat.

Energy: Crude oil traded lower during the week to March 2 with profit taking emerging as the dollar strengthened and expectations rose that OPEC+ at their meeting on March 4 meeting would increase production by up to 1.5 million barrels from April. The weakness, however, only triggered a small amount of risk reduction from funds with the combined net-long in WTI (-3.7k) and Brent (-3.8k) being reduced to 728k lots. With the net-long staying close to the highest level since October 2018, the 7.6k reduction was however the biggest on a weekly basis since early November, just before vaccine news helped kick start the 80% rally seen since then.

Metals: In gold, the continued loss of momentum in response to rising real yields, especially following the slump below $1760/oz, helped drive a continued fund exodus. The net long slumped by one-third to a 22-month low at 57.9k lots on a combination of long liquidation and fresh short selling, a developments that saw the long-short ratio drop below 2 for the first time since May 2019. In silver and platinum, selling has been more subdued given the tailwind from industrial metals and with that some relative strength against gold. The net-long in both was reduced by around 20% to the a seven and a one-month low respectively.

Profit taking continued in HG copper and despite rising 1% on the week, the net long was cut for a second week to 65.5k lots, the lowest since August. Just ahead of Thursday when the break below support at $4.04/lb triggered a rapid slump to $3.85/lb before recovering.

Agriculture: The grains sector with the exception of CBOT wheat was sold on a combination of general risk reduction and the stronger dollar. Biggest reductions in soybeans (-16.8k) followed by corn (-12.6k). Soft commodities were mixed following a couple of weeks of net buying with the most noticeable change being an 83% increase in the cocoa long and a 9% reduction in cotton after the price found resistance ahead of the 2018 high at 95.60 cents per pound. 


Despite bulldozing most of its peers in response to rising real yields, the dollar short against ten IMM currency futures and the Dollar Index only saw a five percent reduction to $29.6 billion, the lowest since mid-December. As in previous weeks, the main contributors to dollar short covering came from EUR and JPY where speculators cut longs by 3 billion dollar equivalent. The euro long was  reduced to an eight-month low as it struggled to hold above support at €1.1950, a level that it eventually broke on Friday.

The explanation for not seeing a bigger reduction in the dollar short can be found in the continued commodity rally, which lifted long positions in CAD by 68% while the AUD reverted to a net-long for the first time in five weeks. Speculators extended their buying of Sterling into a fifth week and the 16% increase to 36k lots was the biggest bet in three-years. This despite emerging signs that the strong run of gains during February had started to run out of steam.


Traders in U.S. interest rate futures made sharp changes in positioning across the curve in the week to March 2. The period included the February 25 wash-out that was sparked by a disastrous 7-year note auction. Please note the data below reflects positions held by leveraged funds, who often hold some of their futures exposure as spreads against other interest rate products, and due to this we often find them buying into bond weakness while selling into strength. The bulk of the opposite position tends to be held by asset managers/institutional and dealer/intermediaries.

What is the Commitments of Traders report?

The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class.

Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and other
Financials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and other
Forex: A broad breakdown between commercial and non-commercial (speculators)

The reasons why we focus primarily on the behavior of the highlighted groups are:

  • They are likely to have tight stops and no underlying exposure that is being hedged
  • This makes them most reactive to changes in fundamental or technical price developments
  • It provides views about major trends but also helps to decipher when a reversal is looming


Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 07

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
  • The rise of populism: Far-right parties will influence the future

    The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.

    Read article
  • Investing in China: Navigating Q1 amid economic challenges

    Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.

    Read article

The Saxo 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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 (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.