The below summary highlights futures positions and changes made by hedge funds across 24 major commodity futures up until last Tuesday, April The risk on seen during this period was driven by hopes, perhaps in some cases premature, that the COVID pandemic had started to loosen its stranglehold on the global economy.
Hedge funds were net buyers of energy and metals while they continued to sell agriculture commodities during the week to April The prospect of production cuts and lock-downs starting to ease spurred speculative demand for crude oil and natural gas while copper short-covering continued.
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Baring a few exceptions such as soybeans, cotton and cattle, broad based selling across the agriculture sector continued. Energy The collapse to negative prices the previous week strengthened speculative demand for WTI futures.
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This in the belief that the current price weakness would support a rapid reduction in US production while attempts to ease lock-downs would spur a pickup in fuel demand.
The recovery in Brent crude oil net-longs have been buy topsto trading more slow and primarily due to short-covering.
During the past four weeks funds cut short positions by Overall the combined long in WTI and Brent rose by 83k lots to k, a three-month high. Natural gas continued to be bought with the combined net long in four Henry Hub deliverable futures and swap contracts reaching a one-year high. Natural gas futures capped its best month in April since November with associated production from oil wells expected to shrink as drillers make deep cuts to production.
In the absence of any major domestic trigger, our markets could mimic the global trend.
Story continues Metals For a sixth week the gold net-long remained stuck in a k to k lots range. In softs, both sugar and cocoa rallied strongly into the weekend after funds began scaling back short positions in response to an improved buy topsto trading.
What is the Commitments of Traders report? The report breaks down the open interest across major futures markets from bonds, stock indexes, currencies, and commodities.
Updated Sep 26, What Is a Top? A top in finance refers to the peak price of a security during a trading period, before it begins a downward trend. Key Takeaways A top in finance refers to the peak price of a security or asset during a trading period, before it begins a downward trend. Charting tops and bottoms in an asset's price fluctuations help inform investors about its performance. Typically, an investor will desire to sell an asset when it reaches a top in order to maximize profits on an investment.
Our focus is primarily on the behavior of Managed Money traders such as commodity trading advisors CTAcommodity pool operators CPOand unregistered funds. They are likely to have tight stops and no underlying exposure that is being hedged.
This makes them most reactive to changes in fundamental or technical price developments. It provides views about major trends but also helps to decipher when a reversal is looming.
The April slump in crude oil continued to attract speculative buying with the risk of storage running out being offset by the focus on falling production and the expected pick up in demand. Bullish WTI bets reached a week high and natural gas a one-year high. Gold demand was tepid despite rising prices while short-covering in copper continued.