Ole Hansen
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Article / 11 August 2014 at 7:30 GMT

Commodity COT: Energy and metals sold while buyers return to grains

Head of Commodity Strategy / Saxo Bank
  • Total positions fall to 961,000, 55% down on April peak
  • WTI crude, natural gas heavily sold to fall to lowest since January
  • Grains buying grows for first time in 14 weeks

By Ole Hansen

Commodities suffered another week of selling from hedge funds and money managers. As of August 5 the total net-long futures and options position across 24 commodities fell for a sixth week to 961,000 contracts, down 55 percent from the April peak. The energy and metal sectors were hardest hit while the grains sector exposure rose for the first time in 14 weeks.

Speculative position in Commodities

WTI crude oil together with natural gas bore the brunt of investor selling during the week which ended a couple of days before US airstrikes in Iraq was announced and which helped stabilise the price following a month long slide. After reaching a record at 356,000 contracts on June 17 net-longs has been cut by one-third to the lowest since January. 

Speculative position in WTI Crude

The whole metal sector, not least gold and silver, were net-sold just ahead of the biggest rally in six weeks last Wednesday which was caused by raised tensions in Ukraine followed by additional support from the news about US air strikes against IS militants on Thursday. 

The exposure to the grains sector rose for the first time in 14 weeks as buying of wheat and corn more than offset continued selling of soybeans which saw a price drop of almost 12 percent during the week. Wheat prices where supported by concerns about Black Sea supplies and adverse weather in key European markets, such as France, Germany and Poland.

In softs, the sugar net-long was removed following five weeks of selling while the cotton traders turned net-short for the first time since November 2012.

-- Edited by Martin O'Rourke

Ole Hansen is head of commodity strategy at Saxo Bank
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COT> Speculative positioning across 24 commodities


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