COT Report: Hedge funds return to gold; elevated grains short ahead of key season
Commodities
The latest COT reporting week to 20 May captured the aftermath of the announced 90-day US–China trade truce, which included a temporary reduction in tariffs. While the news supported additional gains across global stock markets and renewed USD weakness, the commodities sector traded in a very mixed fashion—resulting in a 1% drop in the Bloomberg Commodities Index. This was driven by weakness across most sectors, except precious metals and grains.
The managed money group of traders, tracked in this update, responded with limited enthusiasm. This was partly due to the current lack of clear trends across several major commodities, many of which have experienced volatile but rangebound trading—conditions that tend to reduce appetite for large-scale, one-directional bets. One of the few exceptions was the grains sector, where traders held the biggest net short position across soybeans, corn, and wheat in nine months—and the highest for this time of year in six years—just ahead of the important growing season, during which weather developments often have a significant impact on market performance.
In energy, a rangebound crude oil market saw net selling of WTI offset by demand for Brent, keeping the total net long near a six-week high at 245k contracts. Despite trading lower on the week, demand for the NY diesel contract jumped, resulting in the first—albeit small—net long in two months.
Hedge funds turned net buyers of gold for the first time in ten weeks, during which the net long had slumped to a 15-month low at 111k contracts—a 52% reduction since January. Renewed demand was supported by signs that the month-long correction had run its course, after prices rallied back above USD 3,200 per ounce. Meanwhile, a small amount of net silver buying paled in comparison with platinum, which—together with palladium—surged after finally breaking through key levels of resistance. The platinum position flipped back to a 6.2k long, while the net short in palladium was reduced by 27%. Overall, a sustained rally will force additional demand from wrong-footed short sellers, and those rebuilding longs. Note, in the past five years, when platinum traded mostly sideways, several periods of demand saw the platinum net long peak between 20k and 25k contracts.
Across the agriculture sector, the main focus was once again on the grains segment, which—except for wheat—saw broad net selling from funds during a week where the Bloomberg Grains Index overall showed a 1.6% gain. This lifted the net short across the three major crop futures to 330k contracts—a nine-month high, and the highest for this time of year in six years. Managed money speculators are pricing in almost no weather or logistics risk premium as we enter the critical US summer growing season.
Forex
The latest reporting week to 20 May covered an extended risk-on period across markets following the US-China decision to lower tariffs for 90 days. However, while these developments saw renewed and broad US dollar weakness, the focus among speculators—wrongly as it turned out—pointed in the opposite direction, with naked short bets rising across all the eight IMM forex futures covered in this update, overall leading to a 27% reduction in the gross US dollar short to USD 12.4 billion.
The bulk of selling against the US dollar was led by CAD (–21.7k or USD 1.6 billion equivalent) and euros (–10.3k or USD 1.5 billion equivalent), followed by AUD and JPY.
In the days that followed the reporting period, the greenback saw fresh weakness amid fiscal debt concerns and renewed tariff focus after Trump vented his anger against the EU and Apple, culminating in early Monday trading when the Bloomberg Dollar Index hit a December 2023 low.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mid East Info
6 hours ago
- Mid East Info
US Crude (WTI) hovers near key support as traders await US-Russia talks - Middle East Business News and Information
By Daniela Sabin Hathorn, senior market analyst at Oil markets have entered a cautious 'wait-and-see' mode ahead of the scheduled meeting between President Trump and President Putin in Alaska. Prices have stabilised after heavy losses since the start of August, with Brent crude holding firm around the $66 mark, while WTI (U.S. crude) hovers just above key support at $652 per barrel. This relative calm reflects investor hesitation to make big moves until the diplomatic outcome becomes clearer. US Crude (WTI) daily chart: Past performance is not a reliable indicator of future results. The potential for a diplomatic breakthrough—such as relaxed sanctions on Russian oil—could increase global supply and weigh on prices. On the flip side, escalating tensions or new sanctions—especially targeting major buyers like India—could tighten the oil market and buoy prices. Recent penalties imposed on Indian imports for continuing Russian oil purchases underline this risk, which could drive oil prices up in the near term. Adding to the pressure on prices, the American Petroleum Institute (API) reported a notable 1.5 -million-barrel increase in U.S. crude inventories—suggesting demand may be weakening as the summer season wanes. Although the EIA's official figures are pending, this build is likely contributing to the market's muted reaction. Possible outcomes: Oil prices have always been very sensitive to geopolitical developments and the prospects of supply alterations. As a result, heightened volatility is expected over the next few days. If the U.S. and Russia reach a constructive agreement — such as partial sanctions relief on Russian oil exports, increased trade flexibility, or signals toward de-escalation — the market could price in rising global supply. This would likely be bearish for oil, especially if accompanied by weak demand signals like higher inventory levels. Meanwhile, risk assets would probably resume the upside. If the summit produces no substantial shift, whereby both sides reiterate their positions, with no new sanctions but no easing either, oil will likely remain range-bound, struggling for direction. This would likely see crude prices consolidate, and any price shift would likely reverse in the short term as traders await the next macro catalyst. Lastly, if talks collapse or escalate into new sanctions—like export limits, or additional penalties on countries trading with Russia (like India)— we could see a sharp rally in oil, whilst weighing on risk appetite.
CairoScene
13 hours ago
- CairoScene
Egyptian Banks Raise Traveller Cash Limit to USD 10,000 and Cut Fees
Egypt's major banks have raised the traveller withdrawal limit to USD 10,000, lowered credit card foreign currency fees, and lifted travel verification requirements amid improved dollar liquidity. Aug 13, 2025 Egypt's largest banks have increased the foreign currency cash withdrawal limit for travellers to USD 10,000 or its equivalent in other currencies, up from previous caps of USD 2,000 to USD 5,000 depending on the bank and card type. The new ceiling, now in place at the National Bank of Egypt, Bank Misr, and the Commercial International Bank, aligns with the maximum legal allowance for outbound travellers. Customers can withdraw the full amount before departure by presenting a valid flight ticket and visa. In a further easing of restrictions, several banks have reduced foreign currency markup fees on credit card transactions from 5% to 3%. The lower rates are already in effect at the National Bank of Egypt and CIB, while Bank Misr will implement its cut on August 13th, 2025. The Central Bank of Egypt has also removed the requirement for customers to provide proof of travel abroad when using credit cards. The measures mark a significant shift from restrictions imposed from late 2022, when foreign currency outflows were curbed to address a severe dollar shortage, the emergence of a parallel market, and sustained pressure on the pound. At the height of the controls in 2023, overseas spending caps were sharply reduced, in some cases to USD 50 to USD 100 per month for regular customers and a few hundred dollars for premium cardholders, while high markup fees were applied to discourage use.
Tahya Masr
a day ago
- Tahya Masr
Yalla Group announces strong financial results in Q2, 2025, with steady growth in revenues
Yalla Group Limited ("Yalla" or the "Company") (NYSE: YALA), the largest Middle East and North Africa (MENA)-based online social networking and gaming company, today announced its financial results for the second quarter (Q2) of the fiscal year 2025, ending on June 30 . In the second quarter, Yalla Group reported revenues of AED 310.7 million (US$84.6 million), up 4.1% year-on-year. Net income rose sharply to AED 134.1 million (US$36.5 million), a 16.4% increase from AED 115.3 million (US$31.4 million) in the same period of 2024. For the first half of the year, the company posted revenues of AED 618.8 million and net income of AED 267.7 million. Additionally, Yalla Group's net margin rose to 43.2% in the second quarter of 2025, underscoring the company's ongoing improvements in operating efficiency. Average Monthly Active Users (MAUs) also increased by 8.8% year-on-year, reaching 42.4 million in Q2 2025 compared to 39.0 million in the same period of 2024. Remarkable financial results Mr. Yang Tao, Founder, Chairman and Chief Executive Officer of Yalla, lauded the remarkable financial results achieved by Yalla in the second quarter saying said: 'We delivered another strong set of results in the second quarter of 2025. Our total revenues grew to 84.6 million USD, once again beating the high end of our guidance. We also made significant strides in improving our operational efficiency by optimizing user acquisition strategies and refining our internal processes, which contributed to a year-over-year improvement in our net margin to 43.2% . This impressive performance demonstrates our ability to increase user engagement across our ecosystem and achieve high-quality, efficient growth by anticipating and meeting MENA's evolving social networking and entertainment needs.' 'Throughout Yalla's history, the Company has been committed to the long-term development of MENA's local internet industry. We were one of the first to explore online entertainment in the region, and over the past 10 years, our team has grown from 6 people to over 800 employees, serving over 40 million MAUs across the MENA region,' Tao added . He stated: 'Our product strategy prioritizes creating products with the potential to reach a massive user base, while also demonstrating a long lifecycle. We strive to develop sustainable business models for long-term growth, and we are confident that our commitment and patience will pay off as it has over the last decade. 'We will continue to refine our gaming business strategy and plan to ramp up external partnerships and our game distribution capabilities going forward to more effectively diversify our product portfolios. This will allow us to explore a broader range of game genres and offer users more diverse options, while gaining deeper insight into market dynamics and a more precise understanding of user appetites in the MENA region,' Tao noted. Sustainable growth Commending Q2 financial results, Saifi Ismail, President of Yalla Group, said: 'Our strong financial performance reflects the resilience of our business model and the strength of our user community. Such results demonstrate our ability to drive sustainable growth while continuing to deliver exceptional value to our users across the MENA region.' 'We complemented this financial success with impactful campaigns and strategic partnerships that deepened engagement. Highlights included our co-branded Yalla Ludo campaign with the Dubai Department of Economy and Tourism, which brought Dubai's cultural landmarks into gameplay, and our 9th anniversary celebrations, which set a record for gold coin consumption. These initiatives not only energized our community but also strengthened our brand's market leadership,' Ismail added . 'Looking ahead, we are committed to innovation, strategic expansion, and social impact and we will continue to enhance our product portfolio, deepen partnerships, and create meaningful experiences for our growing user base,' He stated.
