Commodities Sell-Off Continues as Dollar Strength and Yields Rise

Managed money accounts continued their broad sell-off across key commodities in the week ending September 29, 2026, as a stronger dollar and rising US Treasury yields posed significant challenges. The Bloomberg Commodity Index dropped 2.1%, following a nearly 2% decline in the prior week. Most sectors, except softs, experienced setbacks, with precious and industrial metals, as well as grains, leading the declines.

Energy markets also weakened, as tanker-tracking data indicated a rapid rebound in crude shipments through the Strait of Hormuz, countering ongoing tensions between the US and Iran. Overall, managed money accounts reduced their positions in 18 of the 25 major commodity futures tracked. Crude oil saw the most significant cuts, with the combined WTI and Brent net long falling by 31,000 contracts to 335,000, marking a five-week low. Other major reductions were seen in natural gas, gold, silver, soybeans, and corn. Limited buying activity was concentrated in agriculture, particularly in soybean meal, sugar, and cattle.

In precious metals, hedge funds and ETF investors displayed diverging strategies. Managed money accounts slashed their net gold long by 27,000 contracts, equivalent to 2.7 million ounces, in response to weaker prices, rising Treasury yields, and a stronger dollar. Meanwhile, ETF investors added around 1.7 million ounces, lifting total holdings to a four-year high, suggesting long-term investors may be looking past immediate monetary-policy challenges towards fiscal and debt concerns.

Agriculture speculators began reducing their record long positions, accumulated rapidly in August. The combined grains net long peaked above 1 million contracts last month but fell to 923,000 contracts in the latest reporting week. Notably, 40% of this exposure was held in corn, which plunged 4% after a quarterly stocks report exceeded all estimates. The extent of further liquidation will become clearer in the next COT update.