Speculator Extremes: Australian Dollar, Steel & Soybean Oil lead Bullish Positions

BySilas W

By InvestMacro

The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on Tuesday March 17th.

This weekly Extreme Positions report highlights the Most Bullish and Most Bearish Positions for the speculator category and is a current snapshot of how speculators were positioned as of Tuesday. Extreme positioning in these markets can foreshadow strong moves in the underlying market.

To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish (Compare Strength Index scores across all markets in the data table or cot leaders table).

The 6-WK Trend score is the change in the Strength Index over the past 6 weeks and signals how strong and which way the Strength Index is going.

Extreme Bullish Speculator Table

Here Are This Week’s Most Bullish Speculator Positions:

Australian Dollar

The Australian Dollar speculator position comes in tied this week at the top in the extreme standings as the AUD speculator level resides at a 100 percent score of its 3-year range.

The six-week trend for the speculator strength score came in at a gain of 24 percentage points this week. The overall speculator position was 69,061 net contracts this week with a boost of 14,864 contracts in the weekly speculator bets.

Steel

Extreme Bullish Leader
The Steel speculator position comes in tied as the most bullish extreme standing this week. The Steel speculator level is currently at a 100 percent score of its 3-year range.

The six-week trend for the percent strength score totaled a rise of 11 percentage points this week. The overall net speculator position was a total of 13,867 net contracts this week with an increase of 974 contract in the weekly speculator bets.

Speculators or Non-Commercials Notes:

Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels.

These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.

 

Soybean Oil

Extreme Bullish Leader
The Soybean Oil speculator position comes in also tied at the top of the extreme standings this week. The Soybean Oil speculator level is at a 100 percent score of its 3-year range.

The six-week trend for the percent strength score was a jump by 43 percentage points this week as the speculator position registered 120,097 net contracts this week with a weekly increase of 18,346 contracts in speculator bets.

Soybeans

Extreme Bullish Leader
The Soybeans speculator position comes up number four in the extreme standings this week with the Soybeans speculator level at a 93 percent score of its 3-year range.

The six-week trend for the speculator strength score totaled an increase of 35 percentage points this week. The overall speculator position was 221,066 net contracts this week with a drop of -9,202 contracts in the speculator bets.

Palladium

Extreme Bullish Leader
The Palladium speculator position rounds out the top five in this week’s bullish extreme standings. The Palladium speculator level sits at a 91 percent score of its 3-year range while the six-week trend for the speculator strength score was a decline by -9 percentage points this week.

The speculator position was -185 net contracts this week with a small change of -29 contracts in the weekly speculator bets.

The Most Bearish Speculator Positions of the Week:

Extreme Bearish Speculator Table

2-Year Bond

Extreme Bearish Leader
The 2-Year Bond speculator position comes in as the most bearish extreme standing this week as the 2-Year speculator level resides at a minimum 0 percent score of its 3-year range.

The six-week trend for the speculator strength score was a decline by -14 percentage points this week. The overall speculator position was -1,482,667 net contracts this week with a drop of -144,431 contracts in the speculator bets.

Cocoa Futures

Extreme Bearish Leader
The Cocoa Futures speculator position comes in next for the most bearish extreme standing on the week as the Cocoa speculator level sits at a 3 percent score of its 3-year range.

The six-week trend for the speculator strength score was a dip by -3 percentage points this week. The speculator position was -17,859 net contracts this week with a small gain by 2,991 contracts in the weekly speculator bets.

Sugar

Extreme Bearish Leader
The Sugar speculator position comes in as third most bearish extreme standing of the week as the Sugar speculator level resides at a 9 percent score of its 3-year range.

The six-week trend for the speculator strength score showed almost no change this week while the overall speculator position was -207,755 net contracts this week with a small rise of 1,000 contracts in the speculator bets.

British Pound

Extreme Bearish Leader
The British Pound speculator position comes in as this week’s fourth most bearish extreme standing. The GBP speculator level is at a 12 percent score of its 3-year range.

The six-week trend for the speculator strength score was a dip of -22 percentage points this week and the speculator position was -65,515 net contracts this week with a strong gain of 18,682 contracts in the weekly speculator bets.

Natural Gas

Extreme Bearish Leader
Next, the Natural Gas speculator position comes in as the fifth most bearish extreme standing for this week as the Natural Gas speculator level is at a 18 percent score of its 3-year range.

The six-week trend for the speculator strength score had a change by -4 percentage points this week while the speculator position was -178,029 net contracts this week with a rise of 8,827 contracts in the weekly speculator bets.

Article By InvestMacro – Receive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.

All information and opinions on this website and contained in this article are for general informational purposes only and do not constitute investment advice.


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