Ole Hansen, Head of Commodity Strategy, Saxo Bank
Forex
The rapid rebuilding of long dollar positions extended into the latest COT reporting week to 6 October, when Greenback paused its advance with the broad Bloomberg Dollar index trading flat on the week. This did not defer USD buyers with the gross long versus eight IMM futures jumping 40% to USD 35.4 billion, from a USD 6 billion low last month and back towards to multi-year USD 50 billion high recorded back in July. Selling was led by the euro amid ongoing political and fiscal turmoil in Europe, lifting the EUR net short to a 2020 high near 100k contracts or USD 14 billion equivalent. Specs also sold 35.3k AUD, 41.7k MXN, 12k NZD, 11.5k CAD, and 6.5k sterling, while there was buying of 6.9k yen.
Commodities
A broad rebound across key commodities following two weeks of losses did little to change the selling bias among managed money accounts. According to the latest COT report, covering the week to last Tuesday, when the Bloomberg Commodity Index rose 1.2%, these traders remained net sellers across several key markets, including crude oil, natural gas, gold, copper, corn and cotton. Buying was concentrated in fewer contracts, led by sugar and soybeans. Overall, the combined net long across the 25 futures contracts tracked fell by 102k contracts, or 5%, to 1.78 million, despite the recovery in prices.
Energy: The combined net long in WTI and Brent crude was cut for a third consecutive week, falling by 23k contracts to 313k, a two-month low, as traders continued to reduce exposure despite persistent geopolitical supply risks. In natural gas, the net short jumped 39% to 109k contracts, the largest bearish position in two and a half years, reflecting continued selling pressure despite a modest weekly price recovery. Meanwhile, positioning in refined products was mixed, with modest buying in gasoline contrasting with a 14% reduction in the New York ULSD net long, despite continued tightness in global diesel markets.
Metals: The COMEX gold net long fell 8% to a three-month low of 115k contracts, highlighting the growing divergence between shorter-term, momentum-driven traders and longer-term investors, who have continued to accumulate gold through ETFs, lifting total holdings to a four-year high. The contrast may suggest that ETF investors are increasingly looking beyond immediate monetary-policy headwinds from elevated bond yields and a stronger dollar, focusing instead on longer-term fiscal and debt sustainability concerns. In copper, long liquidation accelerated despite a modest weekly price gain, with funds cutting their net long by 22% to a three-month low of 64.5k contracts, highlighting fading speculative conviction following the recent rally.
Agriculture: Corn remained a key target for long liquidation after speculative positioning reached a record high last month. Funds cut their net long by another 60k contracts, or 16%, to a still elevated 317.4k contracts. Importantly, this reduction occurred ahead of Friday’s bearish USDA WASDE report, which triggered the biggest one-day corn price slump since 2023, raising the risk of further liquidation from an already crowded long position. Elsewhere, a 10.5% surge in sugar futures helped drive a 13% increase in the net long to 257.4k contracts, just below its 2023 record, leaving positioning increasingly stretched. Soybeans also attracted fresh buying, lifting the net long to 251.7k contracts, close to its one-year high, while wheat positioning remained mixed, with CBOT shorts being reduced and Kansas wheat longs trimmed.
