Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
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COT report: Record-low WTI longs, firm gold demand, grains sink ahead of WASDE
Ole Hansen
Head of Commodity Strategy
Key points:
- Our weekly Commitment of Traders update highlights futures positions and changes made by hedge funds across forex and commodities during the week ending Tuesday, 9 September 2025.
- In forex, the weak US jobs report saw speculators resume net selling of the dollar, lifting the gross short versus eight IMM futures contracts by 40%
- The Bloomberg Commodity Index (BCOM) slipped 0.5% driving broad-based losses across sectors, only partly cushioned by isolated strength in natural gas, gold, coffee, and soybean meal.
- The WTI (CME) net long slumped to a record low, while diesel tightness drove the gasoil net long to a 3½-year high
- Gold saw continued demand while silver and platinum pulled back given their part reliance on industrial demand
Forex
The latest reporting week captured the market response to another weak US jobs report, which helped soften the dollar as traders fully priced in a 25 bps Fed rate cut this Wednesday. Despite ongoing issues in France, the euro still managed to rise, reinforcing already elevated bullish bets.
Speculators resumed net selling of the dollar through the futures market, with the gross short against eight IMM contracts jumping 40% to USD 7.25 bn. As in recent weeks, demand for JPY and EUR led the move, partly offset by renewed selling of CHF. Overall, positioning remains divided: elevated long positions in EUR, JPY, and MXN - the latter reaching a 15-month high, are countered by short positions in CAD, AUD, CHF, and GBP.
Commodities
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.
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.
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The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options..
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