COT on Commodities
The latest Commitment of Traders (COT) report covered the week to June 11 when the Bloomberg Commodity Index rose 1.5%, the dollar strengthened by around 1% and bond yields traded higher in response to a surprisingly strong US jobs report, causing some jitters ahead of last week’s FOMC meeting, the result of which was known the day after data to this report was compiled.
On a sector level, the mentioned gain was solely driven by broad strength across the energy market with crude oil rallying around 6% as buyers returned below USD 80 in Brent and USD 75 in WTI, while natural gas surged higher by 21% in response to increased demand from domestic consumers and towards LNG exports. All the other sectors lost altitude with industrial and precious metals under pressure from the stronger dollar and technical selling from momentum focused funds. The grains sector meanwhile saw renewed selling led by wheat while softs traded mixed.
Hedge funds responded to these developments by adding length to crude oil, gas oil, natural gas, sugar and cocoa while selling all metals, especially silver and platinum. Most grain contracts except corn saw renewed price weakness, leading to increased short selling of soybeans, soy oil and CBOT wheat, while the position changes in softs were relatively muted, except cocoa where buyers lifted the cocoa net long amid fresh tight-supply led buying.
