15 January 2018 at 8:44 GMT
Hedge funds increased bullish bets across 25 major commodities futures by 13% to 1.7 million lots in the week to January 9. For a third consecutive week the buying was concentrated in energy and precious metals, not least crude oil and gold. Short-covering in sugar and coffee supported a net purchase of soft commodities while bearish bets on key crops reached a new record.
- The week to Jan 9 saw a 13% surge on bullish commodity bets
- The buying was concentrated on crude oil and gold
- Bearish bets on key crops reached a new record
By Ole Hansen
The energy sector saw fresh record net-longs in WTI, Brent and NY ULSD. The combined net-long across the four oil and product futures reached 1.4 million lots (1.4 billion barrels) with WTI and Brent accounting for 1.1 million lots.
Precious metals including platinum saw strong buying while palladium hit a new record net-long. During the past three weeks funds bought a record 111,000 lots of gold. Last week’s 30% increase was the biggest weekly addition since last August when North Korean uncertainty lifted the yellow metal towards its September peak at $1358
/oz. Platinum turned net-long while a record two-week buying spree in silver helped raise the net-long to a six-week high.
The grain sector remained under pressure ahead of the January 12 monthly and quarterly stock report from the USDA. An expected increase in soybeans and corn stocks kept both contracts under pressure. The result turned out to be less bearish for soybeans while a bigger-than-expected stock sent corn and wheat lower.
– Edited by Clare MacCarthy
Ole Hansen is head of commodity strategy at Saxo Bank