COT Commitment of Traders Weekly Report: Markets Increased Metal Holdings and Sold Off Dollar Ahead of Unexpected Inflation Data Release
2026-05-18 23:59:23
This week's Commitment of Traders (COT) report, which compiles data up to the week ending May 12, 2026, will provide an overview of changes in hedge funds' futures positions in the foreign exchange and commodity markets.
In the foreign exchange market, the timing of many trades this week was seriously off: the US dollar initially weakened but then rebounded strongly, reaching a five-week high.
Net long positions in crude oil fell to a nine-week low, while short positions increased, indicating that even with persistent market concerns about supply shortages and high oil prices, traders are unwilling to further increase their bullish positions.
The market significantly increased its holdings of silver and copper, with the open interest in these two metals rising sharply; however, the subsequent rapid reversal in the market also confirmed that these trading positions, which rely on technical analysis and market sentiment, are highly susceptible to changes in the macroeconomic environment.
Foreign exchange market
During the trading session ending last Tuesday, multiple forex trades were timed incorrectly. The US dollar had been declining for some time before rebounding strongly, boosted by inflation data, reaching a five-week high.
U.S. consumer price index and producer price index surged in April, marking the largest year-on-year increase in recent years and triggering the most intense bond sell-off this year. Geopolitical tensions and upward price pressures have raised market concerns that the Federal Reserve and other major central banks globally may be forced to raise interest rates to curb inflation.
Furthermore, the US-China summit failed to achieve substantial progress in resolving the situation in Iran, causing oil prices to rise again, which further helped the US dollar continue its upward trend after the data release.
Ahead of this series of safe-haven rallies that favored the US dollar, speculators had already reduced their long dollar positions by another third, leaving net long positions in the dollar at only $5 billion, a significant decrease from $17.6 billion five weeks ago.
Major currency pair positions were generally poorly managed: long positions in the euro increased by 25%, short positions in the pound were reduced by one-third, and long positions in the Australian dollar hit a 13-year high, which was followed by a sharp drop in the Australian dollar on Friday.
The only accurate prediction was that speculators resumed shorting the yen: the Bank of Japan's previous intervention failed to stabilize the yen's exchange rate, and the USD/JPY exchange rate once again approached the 160 mark.
Commodity Market
During this statistical period, the Bloomberg Commodity Index rose by 1.5%; then, US inflation data triggered violent market fluctuations, with bond yields and the US dollar exchange rate fluctuating across the board, and previously strong precious metals and industrial metals also experiencing significant volatility.
Energy prices remained high and stable throughout the cycle, briefly boosting the metals sector, with silver, platinum, and other semi-industrial precious metals, as well as copper, leading the gains. In agricultural products, weather disturbances and supply concerns pushed up wheat prices, leading to a rise in the grain sector. Soft commodities benefited significantly, with rising oil prices driving demand for biofuels and a continued recovery in demand for sugar and cotton. Livestock futures prices fell, with beef futures, which had previously seen substantial gains, leading the decline.
crude
Net long positions decreased by 39,000 contracts to 441,000 contracts, a nine-week low. This position had reached a four-year peak of 554,000 contracts in the week of March 20, before falling by a cumulative 112,000 contracts, with approximately two-thirds of the decline attributed to increased short positions.
This indicates that even with lingering supply concerns and high oil prices, traders are unwilling to continue buying at current levels.
silver
After silver prices broke through the $82.7 mark, funds poured in, triggering a technical rally. Net long positions in silver surged 48% to 16,200 lots.
This round of price increases was largely driven by technical factors rather than a substantial improvement in fundamentals. Subsequent inflation data pushed up US Treasury yields and strengthened the US dollar, causing silver prices to fall below $83 and experience a sharp correction. The breach of technical support triggered a rapid market reversal, demonstrating that leveraged trading still tends towards short-term tactical positioning and lacks stability.
High-purity copper
The market has increased its long positions in copper for seven consecutive weeks, with net long positions approaching a one-year high of 73,500 lots.
However, a large number of long positions were established above $6.30, and copper prices quickly fell below that level on Friday, triggering a large number of liquidations. Although the long-term fundamentals for copper remain favorable, a shift in short-term market sentiment could easily lead to concentrated selling.
corn
Corn prices remained generally flat this period, but profit-taking occurred in the market, reflecting that after the previous fluctuations, the agricultural product market is temporarily lacking a clear market direction.
Chicago wheat
Wheat prices surged 8% after the release of the USDA supply and demand report, but hedge funds took the opportunity to short the market and significantly increase their short positions.
For a long time, leveraged funds have been reluctant to establish long positions in wheat, primarily due to the significant forward premium in the futures market for this commodity. Although the annualized rollover cost has fallen from around 12% previously, it is still as high as 8.7%. Unless there is a clear signal of supply tightening, the attractiveness of long positions remains insufficient.
cotton
Since tensions in the Middle East began to rise, the market has continued to increase its long positions in cotton, with net long positions now reaching a two-year high of 59,600 lots.
In addition to tight supply and rising production costs, cotton prices are also closely tied to oil price trends—rising prices of competing petroleum-based synthetic fibers, such as chemical fibers, further boost both essential and discretionary demand for cotton.
In the foreign exchange market, the timing of many trades this week was seriously off: the US dollar initially weakened but then rebounded strongly, reaching a five-week high.
Net long positions in crude oil fell to a nine-week low, while short positions increased, indicating that even with persistent market concerns about supply shortages and high oil prices, traders are unwilling to further increase their bullish positions.
The market significantly increased its holdings of silver and copper, with the open interest in these two metals rising sharply; however, the subsequent rapid reversal in the market also confirmed that these trading positions, which rely on technical analysis and market sentiment, are highly susceptible to changes in the macroeconomic environment.
Foreign exchange market
During the trading session ending last Tuesday, multiple forex trades were timed incorrectly. The US dollar had been declining for some time before rebounding strongly, boosted by inflation data, reaching a five-week high.
U.S. consumer price index and producer price index surged in April, marking the largest year-on-year increase in recent years and triggering the most intense bond sell-off this year. Geopolitical tensions and upward price pressures have raised market concerns that the Federal Reserve and other major central banks globally may be forced to raise interest rates to curb inflation.
Furthermore, the US-China summit failed to achieve substantial progress in resolving the situation in Iran, causing oil prices to rise again, which further helped the US dollar continue its upward trend after the data release.
Ahead of this series of safe-haven rallies that favored the US dollar, speculators had already reduced their long dollar positions by another third, leaving net long positions in the dollar at only $5 billion, a significant decrease from $17.6 billion five weeks ago.
Major currency pair positions were generally poorly managed: long positions in the euro increased by 25%, short positions in the pound were reduced by one-third, and long positions in the Australian dollar hit a 13-year high, which was followed by a sharp drop in the Australian dollar on Friday.
The only accurate prediction was that speculators resumed shorting the yen: the Bank of Japan's previous intervention failed to stabilize the yen's exchange rate, and the USD/JPY exchange rate once again approached the 160 mark.
Commodity Market
During this statistical period, the Bloomberg Commodity Index rose by 1.5%; then, US inflation data triggered violent market fluctuations, with bond yields and the US dollar exchange rate fluctuating across the board, and previously strong precious metals and industrial metals also experiencing significant volatility.
Energy prices remained high and stable throughout the cycle, briefly boosting the metals sector, with silver, platinum, and other semi-industrial precious metals, as well as copper, leading the gains. In agricultural products, weather disturbances and supply concerns pushed up wheat prices, leading to a rise in the grain sector. Soft commodities benefited significantly, with rising oil prices driving demand for biofuels and a continued recovery in demand for sugar and cotton. Livestock futures prices fell, with beef futures, which had previously seen substantial gains, leading the decline.
crude
Net long positions decreased by 39,000 contracts to 441,000 contracts, a nine-week low. This position had reached a four-year peak of 554,000 contracts in the week of March 20, before falling by a cumulative 112,000 contracts, with approximately two-thirds of the decline attributed to increased short positions.
This indicates that even with lingering supply concerns and high oil prices, traders are unwilling to continue buying at current levels.
silver
After silver prices broke through the $82.7 mark, funds poured in, triggering a technical rally. Net long positions in silver surged 48% to 16,200 lots.
This round of price increases was largely driven by technical factors rather than a substantial improvement in fundamentals. Subsequent inflation data pushed up US Treasury yields and strengthened the US dollar, causing silver prices to fall below $83 and experience a sharp correction. The breach of technical support triggered a rapid market reversal, demonstrating that leveraged trading still tends towards short-term tactical positioning and lacks stability.
High-purity copper
The market has increased its long positions in copper for seven consecutive weeks, with net long positions approaching a one-year high of 73,500 lots.
However, a large number of long positions were established above $6.30, and copper prices quickly fell below that level on Friday, triggering a large number of liquidations. Although the long-term fundamentals for copper remain favorable, a shift in short-term market sentiment could easily lead to concentrated selling.
corn
Corn prices remained generally flat this period, but profit-taking occurred in the market, reflecting that after the previous fluctuations, the agricultural product market is temporarily lacking a clear market direction.
Chicago wheat
Wheat prices surged 8% after the release of the USDA supply and demand report, but hedge funds took the opportunity to short the market and significantly increase their short positions.
For a long time, leveraged funds have been reluctant to establish long positions in wheat, primarily due to the significant forward premium in the futures market for this commodity. Although the annualized rollover cost has fallen from around 12% previously, it is still as high as 8.7%. Unless there is a clear signal of supply tightening, the attractiveness of long positions remains insufficient.
cotton
Since tensions in the Middle East began to rise, the market has continued to increase its long positions in cotton, with net long positions now reaching a two-year high of 59,600 lots.
In addition to tight supply and rising production costs, cotton prices are also closely tied to oil price trends—rising prices of competing petroleum-based synthetic fibers, such as chemical fibers, further boost both essential and discretionary demand for cotton.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
