Palladium Physical Market Brief: August 13, 2026

Executive summary

Physical delivery activity for the August Palladium (PA) contract remains exceptionally light, with only 30 contracts delivered month-to-date. This quiet physical market presents a notable divergence from derivatives positioning, where Managed Money speculators hold a significant net short position. The lack of heavy selling pressure via exchange delivery suggests that the strong bearish sentiment in the paper market is not currently mirrored by a glut of physical metal.

Delivery intentions (today + MTD context)

• Today's Activity: On August 13, a single contract was issued and stopped for the AUGUST 2026 PALLADIUM FUTURES NYMEX contract.
• Month-to-Date (MTD): Total deliveries for the August contract now stand at 30. This is a very low figure, especially when compared to the 78 contracts delivered against the July 2026 contract as of July 9th.
• Trend: The majority of the August deliveries occurred on the first day of the delivery period (26 contracts on July 30th), with very little follow-through since. The current low volume suggests a lack of sellers willing to deliver metal at current prices or weak demand from longs standing for delivery.

For more detail, see the delivery data stream.

Warehouse stocks

The CME does not publish detailed, publicly-available warehouse stock levels for NYMEX Palladium, which limits visibility into the total inventory available for delivery against futures contracts. Analysis must therefore rely more heavily on delivery flow.

COT cross-check

• Positioning Divergence: As of the latest CFTC report from August 7, Managed Money holds a significant net short position of -5,458 contracts (4,523 longs vs. 9,981 shorts).
• Physical Context: This strong bearish sentiment from speculators contrasts sharply with the quiet physical delivery market. If there were a true surplus of physical metal, one might expect to see higher delivery volumes. The low MTD total of 30 contracts does not support the heavily short speculative positioning.
• Commercials: Producer/Merchant participants are nearly flat (1,551 longs vs. 1,449 shorts), indicating they are well-hedged and not expressing a strong directional view.

For more detail, see the Commitment of Traders data stream.

Risks and watchpoints

• Short Squeeze Risk: The primary watchpoint is the potential for a short squeeze. The large speculative net short position is vulnerable to any unexpected catalyst that tightens the physical market. With low delivery volumes, any uptick in demand from longs choosing to take delivery could force shorts to cover their positions rapidly.
• Interpreting Low Volume: The low delivery volume is the key ambiguity. It could signal weak industrial demand (bearish), but it could also signal physical tightness, where holders are unwilling to part with their metal at prevailing prices (bullish).
• Forward Curve and Open Interest: Monitor the spread between contract months and changes in open interest for signs of rolling activity versus new positioning. A drop in open interest alongside short covering would confirm a reduction in bearish sentiment.