Palladium Physical Market Brief: 2026-08-31

Executive summary

The September delivery cycle for Palladium (PA) is off to a strong start, with a significant number of contracts already standing for delivery. This physical demand contrasts sharply with the heavily net-short positioning held by Managed Money speculators as of the latest CFTC report. This divergence suggests a potential disconnect between paper market sentiment and the appetite for physical metal, creating a key dynamic to watch in the coming sessions.

Delivery intentions (today + MTD context)

On August 31, another 58 contracts were issued and stopped for the SEPTEMBER 2026 PA contract. This brings the month-to-date (MTD) total to 248 contracts.

• Today's Activity: 58 contracts issued/stopped.
• September MTD Total: 248 contracts.
• Context: The September delivery cycle began robustly on August 28 with 190 notices. The current MTD total of 248 contracts already far surpasses the entire volume seen for the August 2026 contract, which totaled just 36 contracts as of its mid-month reporting. This indicates a significantly stronger demand for physical settlement early in this delivery period.

Warehouse stocks

CME/NYMEX does not publish detailed, publicly-audited warehouse stock levels for Palladium. Analysis must therefore rely more heavily on delivery intention flows.

COT cross-check

The latest Commitments of Traders (COT) data, as of August 28, shows a significant divergence between speculative positioning and the strong physical delivery demand.

• Managed Money: Speculators hold a large net-short position of -5,499 contracts (4,486 long vs. 9,985 short).
• Physical vs. Paper: This bearish paper positioning is at odds with the strong start to the September physical delivery cycle. While speculators are betting on lower prices, the demand to take physical ownership of the metal is proving robust.

Risks and watchpoints

• Positioning Divergence: The primary watchpoint is the conflict between bearish speculative sentiment and strong physical offtake. A continuation of high delivery volume could challenge the conviction of the large net-short position in the futures market.
• September Delivery Volume: Monitor the daily delivery notices for the remainder of the September cycle. A sustained high level of activity would reinforce the signal of tight physical supply and strong demand.
• Next COT Report: The next CFTC report will be critical to see if speculators have begun to reduce their net-short exposure in response to the physical market signals.