22 May 2017 at 7:22 GMT
- Despite political uncertainty in the US precious metals were sold again
- In energy natural gas got bought while WTI crude reduction continued
- Cotton and cocoa both benefiting from strong price rallies
By Ole Hansen
Cocoa prices rallied recently. Photo: Shutterstock
Hedge funds continued to reduce bullish bets in gold and silver during the week ending May 16. This despite the rising political uncertainty in Washington which on Wednesday helped drive the spike higher. Selling of oil began slowly as Opec support picked up ahead of the meeting this Thursday.
The energy sector was mixed with strong buying of natural gas and products off-setting a continued reduction in WTI crude oil
A rise in the gross-short in oil to a six months high was the main reason behind another reduction in bullish oil bets. This development helped to drive the strong recovery last week as Opec's verbal support and another bullish US inventory report helped to trigger short-covering.
Precious metals were sold again despite renewed support from rising political uncertainty in Washington. Bullish bets on gold hit an eight week low following a 58% reduction so far this month. A fifth week of silver selling has reduced the net-long from a record 99,000 lots to just 18,300 lots. HG copper gross-short was reduced as China signalled an easing of the recent tightening stance.
The grain sector was reduced again but a two-way fight emerged in corn where both long and short positions increased.
The soft sector was mixed with cotton and cocoa both benefiting from strong price rallies while the sugar and coffee net-longs continued to dwindle.
More charts can be found in the attached report.
— Edited by Clemens BomsdorfOle Hansen is head of commodity strategy at Saxo Bank