Article / 09 April 2018 at 7:35 GMT

COT: Commodities sold on rising trade tensions — #SaxoStrats

Head of Commodity Strategy / Saxo Bank
  • Extended longs seen in crude oil, gas oil and cocoa
  • Combined net-long in WTI and Brent above 1 billion barrels
  • Soft sector continues to see record short positions in sugar and coffee

By Ole Hansen

Hedge funds cut bullish commodities bets for a third week as trade tensions continued to take their toll on sentiment across most sectors.

Extended longs continued to be seen in crude oil, gas oil and cocoa while on the sell side silver, palladium, sugar, coffee and livestock all stood out. 

Speculative positioning in Commodities

Despite the biggest weekly reduction in WTI crude net-long since August the combined net-long in WTI and Brent stayed above 1 million lots (1 billion barrels). 

Short-sellers sold the most WTI in four months as inventories at Cushing began to climb, the prompt spread moved towards contango and the discount to Brent widened.

Speculative positioning in Crude oil
Recently established gold longs got squeezed once again with quarter-end dollar demand and what turned out to be a temporary easing of geopolitical risks helped reduce its appeal.

A drag from the struggling white metals of silver, platinum and palladium also helped prevent at proper test of resistance above $1355/oz.

Bearish bets on silver reached a new record while the early 2018 market darling of palladium after 12 weeks of selling saw its net-long being cut to a 17-months low.

Speculative positioning in gold and silver futures
Platinum group metals position moving towards neutral following weeks of selling.
COT on PGM's

Grain traders added some length back to corn after pre-Easter government survey found that US farmers would plant less acreage this coming season than previously expected.

The data for this report was collected the day before the sector led by soybeans tumbled as China added key crops to its list of US produced products being targeted for import tariffs.

COT on grains
The soft sector continued to see new record short positions in both sugar and coffee while cocoa buying slowed on emerging signs of the rally running out of steam as a double top emerged.  

-- Edited by Adam Courtenay

Ole Hansen is head of commodity strategy at Saxo Bank

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COT on commodities in week to April 3


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