As of last Tuesday, hedge funds and large investors had overall made a small reduction in their exposure towards commodities. Futures positions (excluding options) were trimmed by 9,000 lots to 1,556,000.
Losing sectors were energy (6.7%), softs (2.2%) and meats (14%) while the winners were grains (1.4%) and metals (4.3%).
WTI crude longs were reduced to 215k lots, a 13% reduction on the previous week, and the lowest level since mid-February. A shift to Brent crude, which continues to outperform, combined with uncertainty about both supply and demand side with OPEC meeting the following day and lower activity in U.S. and China probably caused this reduction.
Palladium, which has now rallied 16% in a month, together with gold, saw increased interest while speculators reduced longs in silver to the lowest level in two years.
Investors increased investments in agriculture for the third week as adverse global weather continues to harm crops from China though Europe to the U.S. The biggest jump was seen in the soybeans complex while both corn and wheat seeing reductions after recent strong rallies.
Background information: The Commitments of Traders is a report issued by the Commodity Futures Trading Commission every Friday with data from the previous Tuesday. It comprises the holdings of participants in various U.S. futures markets split into "commercial" and "non commercial" holdings. The non commercial or speculative holding are typically institutional investors such as hedge funds and CTAs.
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