COT Report: Speculators slash commodity longs to 11-month low, gold remains dominant

Commodities

In the week to August 5, several major developments drove positioning changes across key commodities. Trump’s abrupt reversal on copper tariffs triggered a 22% slump in New York prices, prompting funds to halve their HG copper net long. In energy, OPEC+’s continued production increases—potentially into a softening demand period—pressured crude oil, while fading tightness in the diesel market led to long liquidation in London and New York from recent three-year highs.

Grains remained under pressure as favourable U.S., European, and Black Sea weather maintained strong crop prospects, reinforcing elevated speculative short positions across wheat, corn, and soybeans. Notably, soybean futures jumped 2.5% in early Monday trade after Trump urged China to quadruple U.S. soy purchases as part of efforts to cut its trade deficit with China. As of late July, US government data showed China, the world’s top buyer of soybeans, had yet to book any cargoes for the upcoming season that starts in September as tensions between the two sides linger.

Overall, managed money accounts engaged in broad-based selling, with most of the 27 major commodity futures tracked seeing net reductions. The combined net long fell to an 11-month low of 540,000 contracts, valued at USD 107 billion. More than half of this nominal value came from gold’s 161,811-contract net long—which, in contrast to the broader trend, rose 13% last week as a weaker-than-expected U.S. jobs report and potential dovish shift from the FOMC boosted September rate-cut expectations.

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 main reasons why we focus primarily on the behavior of speculators, such as hedge funds and trend-following CTA's 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

Do note that this group tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals. Being followers of momentum, this strategy often sees this group of traders buy into strength and sell into weakness, meaning that they are often found holding the biggest long near the peak of a cycle or the biggest short position ahead of a through in the market.