Commodity CFTC: Nom. exposure cut by one quarter since Feb peak

Speculators cut their exposure to commodities for the fifth week in a row according to data from the CFTC covering the week ending April 24. The net long exposure towards the 24 commodity futures and options we track in this report fell by 4 percent to 1,245,000 contracts corresponding with a USD 3.7 billion drop in nominal exposure to USD 103 billion.

Since the recent peak just two months ago the nominal exposure has dropped by one quarter from USD 138.1 billion as all the three major sectors have seen reduced investor involvement. During that time the DJ-UBS CI is down by 6.7 percent and the energy heavy SP GS CI is down by 4.3 percent.

The biggest contributing sector by far to this reduction has been metals, especially gold which has seen the nominal value of its exposure drop by USD 16.5 billion. If it had not been for the phenominal rise in speculative exposure to the soybean complex the drop would have been even more pronounced. This increased demand for especially soybeans has seen the grain sector challenging metals for second position when measuring nominal exposure.

Energy: with crude oil having settled into a relative tight range and volatility having dropped to multi-year lows the need for further position adjustments has been reduced. As of last Tuesday the net long esposure of the NYMEX and ICE WTI crude contracts rose by 3.8k following several weeks of long liquidation.

Metals: Gold, silver and platinum all had their net length reduced ahead of a small improvement in sentiment which saw prices rally following the cut-off time for this report. Copper speculators remain unsure about the future direction with both large long and short positions resulting in a small net long of just 2.3k.

Grains: Speculators in corn cut their net long exposure by one quarter just ahead of the largest two-day rally in almost  a month. The negative price action was halted after the US reported its biggest export sale in 18 years as reduced South American corn production has increased demand for US corn. The rally in soybeans continues to attract speculative buyers to the complex. From the recent low point some five months ago investors have moved from a net short of 45.5k to a current record long of 404k contracts.

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