The U.S. Commodity Futures Trading Commission (CFTC) released its Commitment of Traders (COT) report for the week ending May 26 on Friday (May 29), revealing the latest movements of various speculative funds in major financial and commodity markets. Overall, a clear divergence emerged between different asset classes: in the Treasury futures market, speculators generally reduced their previous short positions, particularly favoring short- and medium-term Treasury bonds; while in precious metals, energy, and agricultural products, the adjustments between long and short positions diverged, reflecting the market's complex predictions of the economic outlook, inflation expectations, and monetary policy path. The following will provide a detailed analysis and interpretation of the changes in this COT data, categorized by asset class.

I. US Treasury Futures: Short sellers significantly eased their positions, with a substantial reduction in holdings of the two-year contract.

In the interest rate market, speculative institutions significantly adjusted their net short positions in U.S. Treasury futures. Most notably, speculators reduced their net short positions in two-year Treasury futures by a staggering 305,000 contracts, bringing the total net short position down to 1,255,246 contracts. This reduction was the largest in the report, indicating a cooling of market expectations for further tightening by the Federal Reserve in the near term, or that some short sellers chose to close out their positions after taking profits earlier.

Meanwhile, net short positions in 10-year Treasury bond futures also decreased by 60,098 contracts, falling to 787,954 contracts. As the most liquid maturity, the reduction in short positions in 10-year Treasury bonds suggests that speculative funds are cautious about the potential for further increases in medium- to long-term interest rates. However, it is worth noting that ultra-long-term Treasury bond futures (mainly corresponding to contracts traded on the Chicago Board of Trade (CBOT)) showed the opposite trend—net short positions increased by 5,378 contracts, reaching 259,842 contracts. This indicates that, regarding long-term interest rates, some speculators are still betting on a further steepening of the yield curve.

Furthermore, if all maturities of US Treasury futures are combined, speculators' overall net short positions actually increased by 20,577 contracts, reaching 199,251 contracts. This seemingly contradictory aggregate data actually reflects structural differences between different maturities: short- and medium-term short covering was strong, while the increase in ultra-long-term short positions partially offset the former's impact. Overall, the market's judgment on interest rate trends is not one-sided, but rather presents a pattern of "short-term shorts receding, long-term shorts remaining."

II. Precious Metals Market: Gold regains favor with bulls, while silver and copper face selling pressure.

In the precious metals sector, speculators' attitudes have become clearly divided. In COMEX gold futures, speculators increased their net long positions by 2,544 contracts, bringing the total to 96,931 contracts. This increase continues the recent bullish sentiment in the gold market and may be related to geopolitical risks, fluctuations in the US dollar index, and the market's repricing of real interest rates. As a traditional safe-haven asset, an increase in long positions in gold often reflects rising investor concerns about uncertainty.

In contrast, speculative net long positions in COMEX silver futures decreased by 1,517 contracts to 10,244 contracts. Silver possesses both industrial and safe-haven attributes, and this reduction in long positions may be attributed to weak prospects for industrial demand. Copper futures also experienced a similar reduction. COMEX copper futures saw a decrease of 3,025 contracts in speculative net long positions, adjusted to only 71,974 contracts. Copper is considered a barometer of economic activity, and the continued decline in long positions suggests that the market remains cautious or even hesitant about the pace of global manufacturing recovery.

III. Energy Market: Natural Gas Short Selling intensifies, Crude Oil Bullish Momentum Retreats

In the energy futures market, speculative capital deployments also reveal different signals. In the natural gas market, speculators' net short positions across the four major contracts on the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) increased significantly by 39,397 contracts, reaching 41,422 contracts. This significant increase in positions reflects market expectations of a natural gas oversupply or weak demand, and may also be a direct reaction to short-term weather and inventory data.

In the crude oil market, speculative net long positions in WTI crude oil futures decreased by 19,186 contracts to 91,163 contracts. This represents a significant retreat of bullish forces after several consecutive weeks. Crude oil prices had previously been affected by the tug-of-war between OPEC+ production cuts and macroeconomic concerns. This reduction in net long positions may indicate that speculative funds lack confidence in the upside potential of oil prices and have instead adopted a more defensive positioning strategy.

IV. Agricultural Products Market: Soybean Long Positions Take Profits

On the Chicago Board of Trade (CBOT) soybean futures market, speculators reduced their net long positions by 16,211 contracts, bringing the adjusted net long position to 91,566 contracts. This significant reduction in soybean long positions may be due to profit-taking after the previous price rally, but it could also be influenced by factors such as pressure from a bumper harvest in South America or weaker-than-expected export data. This change warrants attention from agricultural commodity investors, as it could indicate a short-term risk of price correction for soybeans.

V. Stock Index Futures: Divergence Between Bulls and Bears Intensifies in S&P 500

Finally, in the stock index futures market, different types of speculative participants exhibited diametrically opposed trends. According to CFTC data, in the week ending May 26, on the Chicago Mercantile Exchange (CME) S&P 500 futures market, "equity fund speculators," typically considered trend followers or hedgers, significantly increased their net short positions by 63,334 contracts, reaching 447,470 contracts. This indicates that this group holds a relatively pessimistic view of the US stock market outlook and has increased its short bets.

However, another type of participant—"equity fund managers" (typically representing longer-term, fundamentally-oriented institutional funds)—increased their net long positions by 3,488 contracts, bringing the total to 1,009,014 contracts. This indicates that professional asset management institutions remain optimistic about the medium- to long-term performance of US stocks and believe that pullbacks may present opportunities to increase their positions. This standoff between the two types of funds reflects the current critical juncture where the US stock market is experiencing increasing divergence in expectations.

In summary, market sentiment is complex and intertwined, with risk aversion and speculative trading coexisting.

In summary, the CFTC positioning data for the week ending May 26th paints a picture of intense battles between bulls and bears, with clear sector rotation. On the interest rate front, speculators significantly reduced their short positions in short- and medium-term US Treasuries, but maintained short exposure to ultra-long-term maturities. In precious metals, gold was favored while silver and copper were neglected. The energy and agricultural markets generally saw defensive adjustments, with bulls retreating or shorts increasing. US stock index futures even witnessed a rare divergence between speculative funds and asset management institutions. Overall, market participants are reassessing global economic growth momentum, inflation path, and the timing of monetary policy shifts, with changes in asset holdings suggesting a trading psychology that combines caution and speculation. In the coming weeks, as more economic data is released, these positions may fluctuate further, requiring close monitoring by investors.