Summary of COT Update - Elevated Dollar and Rate Bets Build as Commodity Selling Eases
Author: Ole Hansen, Head of Commodity Strategy
Date: July 7, 2026
Key Highlights
- USD Long Positions: The net long position in the US dollar reached USD 39.8 billion, marking the highest level in a decade.
- SOFR Short Positions: Leveraged funds increased their short positions in SOFR futures to a record 3.12 million contracts, reflecting a notional value exceeding USD 750 billion.
- Commodity Liquidation Eases: The pace of commodity selling has slowed, with some bottom-fishing observed in precious metals.
- Agricultural Commodities Rally: Support from bullish USDA reports led to price increases in grains, cocoa, and coffee.
Detailed Analysis
Dollar Long Positions at Decade High
As of June 30, 2026, the non-commercial USD long position increased for the eighth consecutive week, reaching USD 39.8 billion. This surge occurred despite a slight decline in the DXY index, primarily driven by aggressive selling of the euro. The Japanese yen short position also hit a two-year high, while the New Zealand dollar short reached a record level.
Record SOFR Short Positions
The short position in SOFR futures has more than doubled in the past two months, reflecting a market sentiment aligned with expectations of prolonged higher interest rates. This positioning could lead to vulnerabilities for a potential short-covering reversal if inflation expectations ease.
Commodity Liquidation Slows
The Bloomberg Commodity Index saw a 1% decline, but the rate of liquidation has slowed. Precious metals experienced some buying interest, indicating potential bottom-fishing. In energy markets, the net long position in Brent crude oil was significantly reduced, while the short positions approached historic highs.
Agricultural Commodities Turn Higher
Positive USDA reports prompted a bullish response in grains, with notable rallies in cocoa and coffee driven by weather concerns and supply issues. Cocoa futures surged 13%, while Arabica coffee futures saw a remarkable 19% increase, the largest one-day rise in 26 years.
Conclusion
The latest COT report indicates a significant shift in market positioning, with heightened dollar long positions and record SOFR shorts. While commodity liquidation is easing, agricultural commodities are showing resilience due to supportive reports and weather-related supply concerns. These dynamics suggest a complex interplay of factors influencing market trends moving forward.
What is the Commitments of Traders Report?
The COT reports, issued by the U.S. Commodity Futures Trading Commission, provide insights into the open interest in futures markets, categorizing positions by different user groups. This information is crucial for understanding market sentiment and potential price movements.