Commodities Sell-Off Continues as Dollar Strengthens and Yields Rise

Managed money accounts continued to sell off key commodities in the week ending September 29, 2026, driven by a stronger US dollar and rising Treasury yields. The Bloomberg Commodity Index dropped 2.1%, following a nearly 2% decline the previous week. Precious and industrial metals, along with grains, led the losses, while energy markets softened due to increased crude shipments through the Strait of Hormuz, despite ongoing US-Iran tensions.

Speculators were net sellers in 18 of the 25 major commodity futures tracked. Crude oil saw the most significant reductions, with the combined WTI and Brent net long position falling by 31,000 contracts to 335,000, a five-week low. Other notable declines were seen in natural gas, gold, silver, soybeans, and corn. Limited buying was concentrated in agriculture, particularly soybean meal, sugar, and cattle.

In precious metals, hedge funds cut their net gold long by 27,000 contracts, equivalent to 2.7 million ounces, while ETF investors added 1.7 million ounces, pushing holdings to a four-year high. This divergence suggests long-term investors may be focusing on fiscal and debt concerns rather than immediate monetary policy headwinds.

In agriculture, speculators began reducing their record-long positions, with the combined grains net long falling to 923,000 contracts from a peak of over 1 million. Corn, which accounted for 40% of the exposure, slumped 4% after a quarterly stocks report exceeded all estimates. The extent of further liquidation will be clearer in the next COT update.