Internal division in metals, divergence between US Treasury short and long positions, this week's position sheet reveals the most striking contrast, hinting at the next fuse

FXH168 News, September 12—— On Saturday (September 12), CFTC positions for the week ending September 8 showed: crude oil net long increased by 21,153 contracts, sugar net long increased by 33,676 contracts, soybeans net long increased by 27,421 contracts, corn net long increased by 25,827 contracts; gold net long decreased by 1,263 contracts, coffee net long dropped to 763 contracts; natural gas net short increased to 54,416 contracts; 2-year US Treasury net short increased by 46,589 contracts, mid-to-long term positions saw short covering. There was intense internal position rotation among funds.

On Saturday (September 12), CFTC positions for the week ending September 8 showed: crude oil net long increased by 21,153 contracts, sugar net long increased by 33,676 contracts, soybeans net long increased by 27,421 contracts, corn net long increased by 25,827 contracts; gold net long decreased by 1,263 contracts, coffee net long dropped to 763 contracts; natural gas net short increased to 54,416 contracts; 2-year US Treasury net short increased by 46,589 contracts, mid-to-long term positions saw short covering. There was intense internal position rotation among funds.

Precious Metals and Copper

Gold net long decreased by 1,263 contracts to 139,548 contracts. The reduction was limited, but the ongoing rotation deserves attention. Silver net long increased by 2,006 contracts to 14,176 contracts. Copper net long increased by 9,016 contracts to 82,017 contracts. Silver and copper saw increased positions, while gold experienced a slight cut. Preferences among metals showed noticeable divergence. Data only reflect the week ending September 8.

Energy

WTI crude oil net long increased by 21,153 contracts to 140,046 contracts. Managed funds’ long positions rebounded. Natural gas net short increased by 3,719 contracts to 54,416 contracts. Short bets continued to press. Gasoline net long increased by 3,662 contracts to 92,926 contracts. Heating oil net long decreased by 4,981 contracts to 16,004 contracts. Crude oil outperformed natural gas, gasoline outperformed heating oil. There was also decoupling within the energy complex.

Foreign Exchange

Euro net short 42,616 contracts. GBP net short 58,836 contracts. Swiss Franc net short 29,985 contracts. Japanese Yen net long 10,796 contracts. Yen was the only non-USD currency with a net long. EUR, GBP, and CHF remained under net shorts. The logic implies funds remain cautious on European currencies, while retaining some bullishness on the yen. The data does not provide direct USD positions, but the non-USD currency net short structure is worth following.

US Treasuries

The overall net short position on Treasury futures increased by 1,016 contracts to 200,517 contracts. The total amount showed a slight increase in shorts, but the breakdown by maturity revealed bigger differences. 2-year net shorts increased by 46,589 contracts to 929,107 contracts. Shorts were clearly adding to the short end. 5-year net shorts decreased by 113,020 contracts to 1,267,493 contracts. 10-year net shorts decreased by 74,492 contracts to 834,783 contracts. Ultra-long net shorts decreased by 24,171 contracts to 345,140 contracts. There was short covering in the mid-to-long and ultra-long terms. Pressure remained on the short end, while there were signs of duration pressure easing in the long end. The divergence within the curve provides more information than just looking at total numbers.

Agricultural Products

Coffee net long decreased by 6,383 contracts to 763 contracts. Longs were almost cleared. Sugar net long increased by 33,676 contracts to 106,116 contracts. Sugar was the highlight among soft commodities. Cocoa net short increased by 4,631 contracts to 18,369 contracts. Shorts continued to expand. Cotton net long decreased by 12,716 contracts to 87,907 contracts. The reduction in positions was significant. Soybeans net long increased by 27,421 contracts to 162,614 contracts. Corn net long increased by 25,827 contracts to 290,897 contracts. Wheat net short decreased by 2,564 contracts to 17,245 contracts. Grains saw increased positions, while soft commodities saw sharp divergence.

Summary

The main theme for this week was internal position rotation. Crude oil, sugar, soybeans, corn, silver, and copper saw increased holdings; gold, cotton, and coffee were cut; natural gas and cocoa shorts expanded. US Treasury shorts increased on the short end, while the mid-to-long end saw short covering. Euro, GBP, and CHF remained net short, yen net long. There was no unified direction for funds, and gaps between asset classes were widening.

FAQ

Why did gold net long decrease while silver and copper increased?
Gold is more influenced by interest rate expectations and its monetary attributes, while silver and copper have industrial attributes. Funds are shifting among these different drivers, leading to divergence in metal positions. Weekly data cannot directly infer price direction; trends should be observed over consecutive weeks.

Why is there a divergence between short and long end of US Treasuries?
The 2-year net short increased, while the 5-year, 10-year, and ultra-long net shorts decreased. The short end is more sensitive to policy paths, while the long end reflects duration pressure and growth expectations. The internal divergence of the curve offers more interpretive value than simply looking at the total, and is more likely to be overlooked.

What is most noteworthy in the FX positioning?
Euro, GBP, and CHF remain net short, yen remains net long. There is no alignment among non-USD currencies. If there is subsequent resonance between USD positions and US Treasury positions, FX volatility may expand. The current data only reflect the week ending September 8.