Article / 23 April 2018 at 8:01 GMT

COT: Energy and metal buying lift bullish bets to four-week high

Head of Commodity Strategy / Saxo Bank
Denmark
  • Bullish commodity bets up 4% to 2.1 million lots in week to April 17
  • Trend driven by broad-based buying of energy and metals
  • The buying more than offset slight selling in grains and livestock

By Ole Hansen

Hedge funds increased bullish commodity bets by 4% to 2.1 million lots during the week ending April 17. Broad-based buying of energy and metals, not least WTI crude oil, natural gas and silver more than offset slight selling in grains and livestock. 

Speculative positioning in Commodities
The total open interest across 22 major commodity futures exceeded 20 million lots for the first time as the demand from producers to traders and speculators continues its revival. The nominal value was 1.09 trillion, not far from the record 1.15 trillion reached in September 2013. 

Total OI and value













Crude oil was mixed with the continued geopolitical risk surge attracting profit taking in Brent crude while lifting the net-long in WTI crude oil. Overall the combined net-long rose to 1.1 million lots, a three-week high. The combined gross short meanwhile slumped to just 65k lots, a four-year low, and it highlights one of the biggest downside risks to oil should the flow of price supportive news dry up.

Speculative positioning in Crude oil
A range-bound gold only managed to attract small buying interest with traders instead finding a better opportunity in silver. Silver’s record short was cut by 60% in response to the improved outlook as it benefited from the tailwind seen across other industrial metals. The 2.5% surge last Wednesday is likely to attracted additional short covering while inviting new longs on board. 

COT on Gold and Silver
The Russian sanctions-related surge in aluminium and nickel supported a second week of HG copper buying. The net-long increased by 60% to 22,478 lots, a five week high.
COT on HG Copper
Grains were mixed as we enter the important crop planting season. Soybeans were bought following four weeks of light selling while the corn net-long was cut by 21%.

COT on grains
Speculators buying cocoa for a 13th consecutive week resulting in the net-long reaching a 38 month high. Some searching for a top was seen with the gross short rising to a nine-week high. 
Arabica coffee meanwhile remained under pressure with short selling accelerating to reach to a record 70,711 lots. 

COT on soft commodities
 
 – Edited by Clare MacCarthy

 

Ole Hansen is head of commodity strategy at Saxo Bank

 

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Managed money positions across 24 major commodities futures

24 April
Market Predator Market Predator
Hello Ole. I'd like to ask you something. If OI is on record level since roughly 6 years, why Value of open interest (VoOI) is still lagging? Is it because of in OI there are also mini-contract counted into OI table?
24 April
Market Predator Market Predator
In fact I would expect direct relation (like positive correlation) between OI (open contracts) and their value.....
25 April
Ole Hansen Ole Hansen
Hi MP. Pure and simple due to the current lower prices on many commodities compared to the previous peak. Not least oil which traded quite a bit higher.
25 April
Market Predator Market Predator
Hello Ole. My thoughts were about standardised price of Contract(s) projected into OI. But of course Value must reflect actual commodities prices. Thanks.
26 April
Aloush Aloush
Hi Mr Ole,
what do you think about Sugar 11 and white sugar 5 ?
regards

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