Palladium Futures COT Brief: Week Ending March 13, 2026

Executive summary

This report reveals a Palladium market characterized by waning speculative interest and a continued exodus of participants. Managed Money has reduced its net long position to nearly flat, driven primarily by long liquidation amidst falling prices. In contrast, Commercials (Producers/Merchants) moderately reduced their net short hedge, reaching their least bearish stance in over three months. Overall market participation, as measured by Open Interest, fell to a new multi-month low, suggesting a lack of conviction and capital in the market. The price decline leading into the reporting week appears to have been a key driver of this spec liquidation.

Positioning (net, extremes vs recent weeks)

• Managed Money: The speculative net position stands at a marginal +348 contracts (5,703 long vs. 5,355 short). This is a significant reduction from the +1,084 net long peak seen just two weeks ago (Feb 27) and marks one of the least bullish stances for this category in the provided data.
• Producer/Merchant: Commercials hold a net short position of -3,046 contracts (499 long vs. 3,545 short). While still heavily short, this is the smallest net short position recorded for this group in the provided dataset, which extends back to December 2025. This suggests a reduction in hedging activity at current price levels.
• Swap Dealers: This category increased its net long position to +1,639 contracts (4,472 long vs. 2,833 short), acting as a primary counterparty to commercial shorts.

Flows and week-over-week changes

• Managed Money (Speculators): Exhibited bearish flows, reducing their net long position by 289 contracts. This was driven by a reduction in long positions (-276 contracts) with a minor addition to shorts (+13 contracts), indicating profit-taking or risk reduction on the long side.
• Producer/Merchant (Commercials): Showed a slight de-risking of their hedge book, increasing their net position by 95 contracts. This was achieved by adding 52 long contracts and, more significantly, covering 43 short contracts.
• Open Interest: Total market participation contracted, with Open Interest falling by 414 contracts to 15,679. This continues a steady decline from levels above 22,000 in late December.

Commercials vs speculators

The classic positioning divergence continues, but the intensity has shifted. Speculators (Managed Money) have become largely neutral, pulling back from their bullish bets of previous weeks. This retreat from the long side removes a key pillar of price support.

Conversely, Commercials (Producers) have been consistently reducing their short hedges as prices have fallen. Their current net short position of -3,046 contracts is down substantially from over -3,900 contracts in late December. This implies that at current prices, they feel less urgency to hedge future production, potentially providing a soft floor for the market.

Open interest and participation

• Overall Trend: Open Interest at 15,679 contracts is the lowest level in the provided historical data. This multi-month decline signals a significant capital flight from the Palladium futures market.
• Participant Share: Managed Money remains a dominant force, controlling 36.4% of all long positions and 34.2% of shorts. Producers/Merchants account for a substantial 22.6% of the short side but only 3.2% of the long side, reflecting their hedging-focused activity.
• Concentration: The market shows a notable concentration on the short side. The largest 4 traders hold 34.7% of the net short position, and the largest 8 traders hold 49.8%. This concentration could lead to outsized moves if these large players need to adjust their positions rapidly.

Price context

The price series, which runs through March 11, provides crucial context for the positioning changes. - In the week prior to this report (March 6-13), prices were weak, with the last available data showing a fall to a low of 1590.0 on March 9 before a slight rebound. - This price decline corresponds directly with the long liquidation seen from Managed Money (-276 long contracts). It appears falling prices forced speculators to close out bullish bets. - The reduction in Commercial short positions occurred into this price weakness, suggesting they viewed the lower prices as an opportunity to reduce hedge costs.

Risks and watchpoints

• Fading Speculative Support: The primary risk is the near-total collapse of the speculative net long position. With Managed Money now effectively on the sidelines, the market lacks a key buying constituency, making it vulnerable to further downside pressure.
• Commercial Floor: Watch for continued short-covering from Producers/Merchants. If they continue to buy back hedges, it could cushion further price declines. However, a reversal to aggressive new shorting would be a very bearish signal.
• Declining Liquidity: The persistent drop in Open Interest is a significant concern. Thinning markets can be prone to higher volatility and sharp, sudden moves. A reversal and sustained increase in Open Interest would be required to signal renewed market conviction.
• Indecision Point: The current flat speculative positioning combined with low Open Interest suggests a market in a state of indecision. This could be a base-building phase or simply a pause before the next leg of a trend. A break of recent price lows could attract fresh speculative short-selling.