08 August 2016 at 8:20 GMT
By Ole Hansen
Hedge funds scaled back bullish commodity bets for a sixth consecutive week last week. The 6% reduction saw the net-long of 20 US traded commodities drop to 924,000 lots after hitting 1.53 million on June 21. The main driver behind this reduction has been the grains sector going from a net-long of 535k lots to a current net-short of 115k lots.
Most of the selling hit WTI crude oil, HG copper, soybeans and corn while buyers were seen in natural gas, gold, cotton and live cattle.
WTI crude selling has triggered a record gross-short (Nymex) with the net-long falling to the lowest since January 19. September has seen oil prices fall in the past five years as inventories rise in response to slower refinery activity.
The combined position of WTI crude oil traded on Nymex and ICE has seen a pick up in both buying and selling during the past few weeks.
- Buyers returned to gold following three weeks of light selling. The 4% increase ahead of the stronger-than-expected US jobs report last Friday helped trigger the selloff.
- Platinum bulls has taken the net-long to a near record.
- Buying of cotton extended into a sixth week with the net-long rising by 13% to 76,468 lots. On three previous occasions since 2006 the net-long reached 80,000 before seeing sharp reductions.
– Edited by Clare MacCarthy