Latam's stake in systematic flows: What CTA positioning means for commodity markets

On April 8, Brent fell 13% following ceasefire headlines, triggering approximately 8.9 million barrels of systematic CTA selling. Just nine days later, on April 17, Brent declined another 9% after Iran declared the Strait of Hormuz open. This time, systematic selling reached roughly 54 million barrels in a single session. Despite similarly sharp price declines, the CTA response was dramatically different.

Fundamental developments may initiate a price move, but systematic positioning can play an important role in what happens next. Many systematic Commodity Trading Advisors (CTAs) deploy similar trading strategies, creating concentrated buying and selling activity when prices reach certain levels. Understanding where these orders may emerge helps explain why similar market events can produce very different responses.

Kpler Financial Flows provides visibility into this activity by recreating systematic CTA strategies. This allows market participants to monitor current positioning, identify potential entry and exit levels, and assess the trade volumes that could emerge as prices move.

For Latin American commodity participants, this adds another dimension to fundamental analysis. Brent and ULSD influence regional fuel prices, while corn and soybeans are central to major agricultural exporters such as Brazil and Argentina.

Understanding systematic CTAs and their market footprint 

Commodity Trading Advisors cover a wide range of trading styles, but Kpler splits them into three groups. High-frequency strategies react to price, liquidity, and headlines in small, fast, reactive bursts. Discretionary funds trade on macro views and enter or exit the market on their own schedule, so their flows are episodic rather than synchronized. Traditional systematic CTAs are the primary focus of Kpler Financial Flows. Unlike discretionary managers, these funds follow predefined trading rules that determine when to enter, manage, and exit positions. Because many systematic funds deploy similar strategies, their trading activity often becomes synchronized, with buying and selling concentrated around common price levels. This creates an identifiable footprint in the market.

Recreating systematic CTA trading behavior 

Understanding this systematic footprint requires more than identifying common technical price levels. It requires recreating the trading strategies that generate the orders in the first place.

Kpler Financial Flows builds on the trading infrastructure originally developed by Bridgeton Research Group, which operated a fully diversified systematic CTA portfolio before transitioning into a data and analytics platform.

At its core is a functioning trading platform that recreates systematic CTA strategies using price, trading volume, and open interest. Each strategy independently establishes a directional bias, identifies the price levels required to enter a position, and manages its exposure through dynamically adjusted exit levels. This allows Financial Flows to generate the positions, orders, and associated volumes that these strategies would produce under current market conditions.

Position sizing is based on risk rather than available capital. In more volatile environments, strategies typically hold smaller positions with wider stop-loss levels. In calmer conditions, positions can increase in size while exit levels sit closer to market prices.

Validating the systematic footprint 

Recreating systematic strategies is only part of the process. To assess how closely the platform reflects real-world CTA behavior, Kpler compares its trading outputs against three independent measures of market activity.

Performance: The simulated trading portfolio is compared against established CTA benchmarks to assess whether its performance and risk characteristics are consistent with those of systematic funds.

Positioning: Kpler analyzes CFTC Commitment of Traders data to distinguish modeled systematic CTA exposure from other participants within the broader managed-money category. This allows daily strategy positioning to be compared with reported market positioning and helps identify the relationship between systematic CTA activity and broader managed-money flows.

Market activity: Kpler examines excess trading volume around the price levels where its systematic strategies generate orders. By measuring trading activity above historical norms around these triggers, the analysis helps identify whether the expected systematic footprint is visible in the market.

CTAs in Action: When Systematic Flows Converge 

The value of identifying systematic trading activity becomes particularly clear when multiple strategies are expected to trade around similar price levels. An individual CTA trigger may have limited influence on market prices, but clusters of orders can create considerably more concentrated buying or selling pressure.

On September 1, three separate Brent trend-following strategies triggered orders to open long positions as prices moved through a series of closely clustered levels. Together, these strategies generated approximately 45,000 lots of estimated CTA buying over a 70-minute window, increasing aggregate positioning from 45% long to 91% long. During that same period, Brent rallied approximately $1.25, with the estimated orders filling roughly twice as fast as the historical average.

The September move illustrates how independently generated strategy orders can converge, creating a much larger concentration of systematic buying than any individual trigger would suggest.

Why positioning matters before a price shock 

The September Brent example shows how concentrated CTA buying can reinforce an existing price rally. The same dynamic can work in reverse when fundamental developments push prices through systematic exit levels, triggering the liquidation of existing positions.

This was evident during the US-Iran conflict earlier this year. On April 8, ceasefire headlines drove Brent prices 13% lower, but the decline triggered only approximately 8.9 million barrels of systematic selling. Despite the size of the move, most trend-following strategies maintained their long positions because their stop-loss levels remained below the market.

By April 17, several CTA exit levels were concentrated much closer to prevailing prices. When another fundamental development pushed Brent lower, four trend-following strategies closed their long positions, generating an estimated 54 million barrels of systematic selling. Aggregate CTA positioning fell from 82% long to 27% long.

Both declines were driven by fundamental developments, but the systematic response differed considerably. The first decline encountered relatively few CTA exit orders, while the second breached a much larger concentration of stop-loss levels. This illustrates how existing systematic positioning can influence the magnitude of trading activity that follows a fundamental market shock.

Where positioning sits now across Brent, ULSD, corn, and soybean

These examples highlight why understanding current CTA positioning is important. The potential impact of a future price move depends not only on the fundamental catalyst, but also on how much exposure systematic strategies already hold and where their next entry or exit levels are concentrated.

As of mid-October 2026, those conditions vary considerably across key commodity markets.

Systematic trend-following CTAs were at or near maximum long exposure in Brent and ULSD. With limited capacity to add further long positions, attention shifts toward how these strategies manage their existing exposure and where systematic selling could emerge if prices reverse. For Latin American fuel importers and traders, understanding these potential liquidation levels provides additional context around downside price risk.

Agricultural markets present a different picture. In corn, CTAs have already unwound a significant portion of their previously elevated long exposure, although additional clusters of selling remain. In soybeans, the liquidation process has only recently begun, with further selling dependent on prices reaching additional systematic exit levels.

For major agricultural exporters such as Brazil and Argentina, these differences matter. Concentrated CTA selling can introduce additional pressure or accelerate an existing price move, even when the underlying fundamental outlook has not materially changed.

How CTA positioning complements a fundamental trading view 

Financial Flows is designed to complement fundamental analysis rather than replace it. Understanding where systematic CTAs are positioned and where their orders may emerge can help traders assess how technical flows might interact with their existing market views.

For a trader with a bullish fundamental outlook, CTAs that remain short or are beginning to establish long positions may represent potential buying pressure if prices continue higher. Conversely, a trader already holding a long position may identify clusters of CTA selling below the market that could accelerate a decline, even if the underlying fundamental thesis remains unchanged.

For Latin American commodity participants, understanding systematic CTA activity adds valuable context to fundamental market analysis. Whether monitoring energy prices or agricultural markets, knowing where systematic orders are concentrated can help identify when a fundamental price move may encounter additional buying or selling pressure.

Kpler Financial Flows brings this information into the trading workflow through daily positioning estimates, forward-looking entry and exit levels, historical analysis, and intraday monitoring, available through the Financial Flows platform and API.

If you’d like to see Financial Flows coverage across the markets you trade, you can request a demo.