Palladium Physical Market Brief: 2026-09-04

Executive summary

Physical delivery for the active September Palladium contract continues at a slow pace after a strong start to the delivery period. Month-to-date deliveries now stand at 261 contracts. This steady physical offtake stands in contrast to speculative positioning in the futures market. The latest CFTC data shows that Managed Money holds a significant net short position, indicating a strong bearish sentiment that is currently diverging from the baseline physical demand evidenced by delivery activity.

Delivery intentions (today + MTD context)

Daily delivery notices for the September 2026 contract remain light, but the cumulative total for the month highlights consistent physical settlement. * Today's Activity: For September 4th, a total of 2 new contracts were issued and stopped, indicating matched delivery intentions. * Month-to-Date (MTD): The total number of contracts settled for the September delivery period has now reached 261. * Trend Context: The delivery period began with a large volume of 190 notices on August 28th and another 58 on August 31st. Activity since then has been a slow trickle, with 1-10 contracts per day, which is typical as a delivery month progresses.

Full data stream available at: Warehouse and Delivery Data

Warehouse stocks

CME/NYMEX does not publish publicly-audited warehouse stock levels for Palladium. All analysis of physical tightness must be inferred from delivery intentions and market price structure.

COT cross-check

The latest positioning data from the CFTC highlights a significant divergence between speculative sentiment and physical market activity. * Managed Money Position: Speculators (Managed Money) are heavily bearish, holding a net short position of -4,619 contracts (4,626 long vs. 9,245 short). * Positioning vs. Physical Flow: This strong speculative bearishness contrasts with the 261 contracts that have stood for physical delivery so far in the September contract. While not a massive delivery volume, it represents consistent demand from physical market participants who are taking delivery at current prices, despite the negative sentiment from funds.

Full data stream available at: Commitment of Traders Data

Risks and watchpoints

• Short Squeeze Potential: The primary risk is a short squeeze. The large net short position held by Managed Money is vulnerable if physical demand unexpectedly accelerates or if available metal for delivery proves scarce.
• Watchpoint - Delivery Pace: Continue to monitor the daily delivery notices. Any unexpected increase in volume could signal tightening physical conditions and challenge the prevailing bearish speculative sentiment.
• Watchpoint - Open Interest: Total open interest stands at 16,497 contracts. The large speculative short position constitutes a significant portion of the total market liquidity.