Article / 14 August 2017 at 8:07 GMT

COT: Metals in demand, grains rally deflates — #SaxoStrats

Head of Commodity Strategy / Saxo Bank
Denmark
  • Funds turn net-sellers of commodities in week ending August 8
  • Safe-have demand for precious metals continued
  • Gold net-long rises in tandem with harsh US rhetoric on North Korea

Grains
Hedge funds exited grains positions in the week ending August 8.Photo: Shutterstock
 
By Ole Hansen

Hedge funds turned small net-sellers of commodities during the week ending August 8. This following a six-week buying spree which increased the net-long by 258%. 

Energy held steady and metals were bought while the recent bull run in grains continued to deflate with funds exiting non-performing long positions. Coffee returned to neutral following another failed short-selling cycle.

Speculative positioning in Commodities
 
Speculative positioning in Commodities
 
Safe-haven demand for gold and silver continued, despite the set-back that was seen following the stronger-than-expected July jobs report. In the three weeks ahead of Trump’s "fire and fury" statement, the net-long in gold had risen by 110,000 lots with 71,000 lots of these being short-covering. 

The gold net-long at 138,566 lots was half of the one-year maximum while for silver it was even lower at just 28%. 

Speculative positioning in COMEX Gold futures
 
The net-long in HG copper rose to a new record high as speculation about increased Chinese demand continued to support the price. It needs to hold gains above $2.85/lb in order to avoid profit-taking and to maintain the momentum required for a test of $3/lb.

Speculative positioning in COMEX Copper
Crude oil had a quiet week as the market remains rangebound. Following a more than doubling of the net-long during the past six weeks, a small reduction was seen.

WTI Crude oil
 
The early July rally across the grain and oil seed sector continued to deflate as the Bloomberg Grains index gave back all of the strong gains seen one month ago. A net-long in both corn and soybeans was held ahead of Thursday’s big bearish WASDE surprise, which helped send the sector even lower.

Speculative positioning in grains and beans
 
The fund exposure in Arabica coffee returned to neutral following another failed short-selling cycle. On June 27 funds held a record net-short of 43,619 but since then the price has rallied by almost one-quarter.
Speculative positioning in Arabica Coffee



















Soft commodities:
Soft commodities

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COT data on Brent crude oil and gas will be posted below following the release by the ICE Europe Exchange at 1300 CET.

— Edited by Michael McKenna

Ole Hansen is head of commodity strategy at Saxo Bank

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Commitments of Traders: Commodities

14 August
Ole Hansen Ole Hansen
Hedge funds increased Brent crude net-longs by 58k to 401k lots in week to August 8. This as the prompt spread returned to backwardation and the premium to WTI rose
15 August
Logich Logich
Hey, Ole. - Do you have an explanation for the significant drop over the couple off days, in the Coffee price?
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