Financial Professionals

Market Insights

A A A

CFTC Commitments Of Traders Report

06/06/2011

For the week ending Wednesday, June 1, holdings of net long futures contracts increased for the second consecutive week. Net longs (Fig 1.1) increased 7.3% to 1.26 million contracts, the highest level in four weeks. I interpret the increase as further evidence of a slowdown, not a meltdown for the global economy. In particular, copper holdings increased 59% as the evidence suggests Chinese de-stocking of the red metal is nearing an end.
 
Also of note: 

  • $130 million of inflows entered commodity markets in the week ending June 1
  • $702 million of inflows was the previous week's figure, thus we have two consecutive weeks of inflows, which has stabilized the mid-May commodity sell-off
  • Copper longs increased 59%, from 4,604 to 7,304 contracts
  • Shanghai Futures Exchange inventories of copper have plunged over 50% since mid-March (Fig 1.2)
  • Wheat longs increased 14% on poor Russian and U.S. weather
  • Cotton longs increased 12% — the biggest gain since August 2010
  • Distillate longs surged 22% on dwindling U.S. inventories (Fig 1.3), which now stand at a 25-month low; China exports of diesel was halted on May 12 to meet domestic manufacturing demand
  • Oil longs fell marginally .55%
  • Natural gas longs increased 23%
  • Gasoline longs increased 1.42%
  • Silver longs fell 1%
  • Gold longs increased 11%

Fig 1.1 CFTC Net Long Holdings of Futures Contracts, June 2010 - June 2011

Source: Bloomberg
 
Fig 1.2 Shanghai Futures Exchange Copper Inventories, June 2010 - June 2011

Source: Bloomberg
 
Fig 1.3 Department of Energy Distillate Inventories, June 2010 - June 2011

Source: Bloomberg

 

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.