Not surprisingly, copper prices have started the new week/month/quarter on a weaker footing. Prices last Friday launched into a massive surprise rally and probably left the market technically winded. While some global equity markets have clawed out some minor gains overnight, the macro economic tone is weak in the wake of Factory order data from China showed key demand source probably remains on a weaker economic track. In fact, China, Japan and South Africa all released soft PMI data overnight and expectations for the US data later today call for minimally soft data flows. The Commitments of Traders Futures and Options report as of June 26th for Copper showed Non-Commercial traders were net short 16,845 contracts, an increase of 2,563 contracts. The Commercial traders were net long 27,058 contracts, an increase of 3,205 contracts. The Non-reportable traders were net short 10,213 contracts, an increase of 642 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 27,058 contracts. This represents an increase of 3,205 contracts in the net short position held by these traders and that significantly oversold condition probably contributed to the very sharp short covering rally at the end of last week. LME copper stocks overnight were down 850 tons to stand at 256,300 tons.
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