Article / 20 November 2017 at 8:51 GMT

COT: Broad-based commodity buying led by WTI, natural gas, and sugar

Head of Commodity Strategy / Saxo Bank
Denmark
  • Bullish commodity bets across 26 futures increased  by 7%
  • Buying was broad-based and led by WTI crude oil, natural gas and sugar
  • The oil sector was mixed while gold was bought for a second week
commodities
 Natural gas was a primary driver of the advance in bullish bets. Pic: Shutterstock

By Ole Hansen

Hedge funds increased bullish commodity bets across 26 futures by 7% to 1.8 million lots in the week to November 14. Buying was broad-based and led by WTI crude oil, Natural gas and sugar with a few exceptions, most noticeably, soybeans and corn.

Speculative positioning in Commodities
 
Speculative positioning in Commodities
 
The oil sector was mixed with the net-long in WTI crude oil reaching an 8-month high while Brent crude oil saw the record long being reduced for the first time in five weeks. WTI buying was driven by short covering while selling in Brent came from fresh short selling. Overall, the combined crude oil net long reached 918,000 lots, just 10,000 lots below the February 21 record. 

Speculative positioning in Crude oil
Both products of RBOB gasoline and Ny harbor ULSD (diesel) reached new record highs. Not least ULSD where the net-long at 72,000 is 60% above previous records recorded between 2012 and 2014. 

Speculative positioning in oil products
 
Gold was bought for a second week as the metal continued to find support towards $1270/oz. The support has come from US tax reform concerns and not least the potential reduction of an elevated IMM JPY net-short (see COT on FX Update). Funds have remained resilient throughout the months-long correction with current positions in gold and silver both being around 68% of the one-year high. 

Speculative positioning in gold and silver futures


Funds continued to exit long bets on HG Copper as concerns about Chinese growth and winter demand sapped confidence in higher prices.

The combined short across the three main crops expanded to 327,000 lots. Not least due to a record short in CBOT corn of 232,000 lots. This after the new front month of March slumped to a fresh low below $3.50/Bu.

COT on crops
 
Soft commodities, led by sugar, witnessed its strongest week of buying since June 2015. The technical breakout to the upside for sugar helped trigger a 68% reduction in the net-short. Following ten weeks of buying and a 20% rally since September funds finally turned net-long on cocoa last week.  

COT on soft commodities
 

– Edited by Clare MacCarthy

 

Ole Hansen is head of commodity strategy at Saxo Bank



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(Commitments of Traders: Commodities)

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