04 December 2017 at 8:48 GMT
- All commodity sectors were net bought in week to Nov 28
- WTI crude oil, gold, soybean meal, cotton and corn were top five
- Natural gas, soybean oil and wheat were bottom of the pile
By Ole Hansen
Hedge funds were net-buyers of 75,000 lots across 26 commodities futures in the week to November 28. All sectors were net bought with the top five being WTI crude oil, gold, soybean meal, cotton and corn. At the other end of the scale we find natural gas, soybean oil and wheat.
Bullish oil bets on WTI and Brent crude oil hit a record 963,000 lots or almost one billion barrels ahead of last Thursday’s Opec and non-Opec meeting in Vienna. The net-long in WTI crude oil jumped by 15% or 52,633 lots, not least due to a strong decline in the gross short.
The net-long in natural gas slumped by 26%, especially due to a big increase in the gross-short. This occurred just before forecasts shifted dramatically towards colder price supportive weather.
Gold traders were wrong-footed last week and it helps to explain the sharp price reversal that was seen following the failed attempt to break above $1300/oz. Higher prices up until last Tuesday helped trigger a 15% increase in the net-long toe 204,204 lots, a ten-week high. The combination of longs being added and the shorts were reduced helped drive the long to short ratio to an uncomfortable high of 21.4 to 1. A market this skewed towards higher prices were last seen five years ago.
– Edited by Clare MacCarthy
Ole Hansen is head of commodity strategy at Saxo Bank