COT: Funds remain cautious despite rising commodity prices COT: Funds remain cautious despite rising commodity prices COT: Funds remain cautious despite rising commodity prices

COT: Funds remain cautious despite rising commodity prices

Ole Hansen

Head of Commodity Strategy

Summary:  The COT reports published weekly by the US CFTC highlight futures positions and changes made by hedge funds across commodities, forex and financials during the latest reporting week to last Tuesday, October 26. A week where healthy risk appetite continued to send stocks higher while keeping the dollar unchanged. The bond market meanwhile saw surging inflation expectations drive real yields lower while speculators in commodities showed limited appetite for more exposure despite prices in some cases hitting fresh multi-year highs.

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.

This summary highlights futures positions and changes made by hedge funds across commodities, forex and financials up until last Tuesday, October 26. A week where healthy risk appetite continued to send stocks higher while keeping the dollar unchanged. The bond market was anything but quiet with surging inflation expectations and worries of sooner-than-expected rate hikes driving short end rates higher. Real yields got caught up in the rout, and during the reporting week, the ten-year tenor saw a precious metal supporting drop of 17 basis points before reversing sharply higher towards the end of the week.


During the reporting week, the Bloomberg Commodity Index hit a fresh multi-year high with gains in energy and several key agriculture commodities more than offsetting a tough week for industrial metals. However despite the 1.7% rise the price gains failed to attract much in terms of fresh hedge fund buying. The combined net long across the 24 major futures contracts tracked in this only saw a small 1% increase to 1.97 million lots. Net length was added in gold and silver, as well as grains while reductions were seen in crude oil, natural gas, copper and most soft commodities.

Energy: Speculators continued to sell into crude oil strength, not least Brent crude where the gross short rose to a near three-month high at 80.2k lots.  A 12% jump in the price of natural gas also failed to attract fresh buying with the net long instead falling by 8% on a combination of profit taking and fresh short selling.

Metals: Big jumps in the speculative length of gold (+46%) and silver (+49%) left both metals exposed to the end of week reversal in US real yields and especially gold’s inability to mount a proper attack on resistance above $1800. Copper’s 4.6% correction only triggered a small amount of selling which is interesting given the number of recent established longs having been caught offside.

Agriculture: The grains sector saw another week of buying and this time length was added to all the six contracts led by corn and the soybeans complex. The soft sector was generally hit by profit taking as speculators sold into rising markets, especially sugar where a 4.2% price jump was met by a 8% reduction in the net long to 163k lots, a 40% reduction since August.

Latest comments from our Market Quick Take, published daily here:

Crude oil has started the week trading mixed ahead of Thursday’s OPEC+ meeting and after Biden told the group to “pump more oil”. Whether or not that will change the groups 0.4m b/d per month increase remains to be seen, but it has raised speculation it could increase the chances of an Iran nuclear deal. Also, over the weekend China released diesel and gasoline reserves in order to try and curb domestic prices. The market will also watching EU and Asian gas price developments as well as Wednesday’s weekly EIA stock report, where a sharp reduction at Cushing in recent weeks has resulted in elevated WTI time spreads as the market worries about low supplies at this important delivery point. In the week to October 26, specs cut bullish oil bets for a third week, and despite trading near multi-year highs the current 600 million barrels long (WTI & Brent) is now 136 million barrels below the February and June peaks.

Gold dropped the most in two weeks on Friday on elevated swings in US real yields. An example being the ten-year tenor which jumped to –0.9% after reaching –1.15% on Thursday. Surging short-end interest rates have raised concerns central banks are losing control and with this in mind precious metals will be trading nervously ahead of central bank meetings this week from the FED, RBA and BOE, where the market will be focusing on the pace of tapering and any guidance on future rate hikes. From a technical perspective, gold needs to hold above the 21-day moving average at $1777, as a break below could signal further loss of momentum. 


The aggregate dollar long against ten IMM currency futures and the Dollar Index was reduced again last week, and since hitting the highest since June 2019 the past three weeks has seen the length reduced by 8% to the $23 billion.

Buying was concentrated in GBP (+13.3k lots), which rose on interest rate hike speculation, and CAD ahead of Wednesday’s hawkish Bank of Canada meeting where the bank announced an end to its Quantitative Easing program while raising the prospect sooner than expected rate hikes. The 14.2k lots of net buying flipped the net back to a small long with additional small buying seen in EUR, AUD and NZD.

Just like in recent weeks, the selling was concentrated in CHF (-1.8k) and not least JPY where 4.3k of net selling lifted the net-short to near a three-year high at 107k lots. Among the minor currencies, continued selling of MXN lifted the net short to a March 2017 high.

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



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.