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The time frame for this week’s the Commitments Of Traders Report is Wednesday August 20 – Tuesday August 26

Soybeans:

For the week, September soybeans lost 76.50 cents, November -17.75, January 2015 -16.25. The COT report revealed that managed money liquidated 3,484 contracts of their long positions and added 4,487 contracts to their short positions. Commercial interests added 7,558 contracts to their long positions and liquidated 8,972 contracts of their short positions. As of the latest report, managed money is long soybeans by ratio of 1.28:1, which is down from the previous week of 1.39:1 and the ratio of 2 weeks ago of 1.46:1.

Soybeans will not likely find a bottom until manage money assumes a net short position.

Soybean meal:

For the week, September soybean meal advanced $6.20, December -2.00, January 2015 – 2.00. The COT report revealed that managed money liquidated 5,359 contracts of their long positions and added 1,847 contracts to their short positions. Commercial interests added 12,417 contracts to their long positions and liquidated 4,072 of their short positions. As of the latest report, managed money is long soybean meal by ratio 2.74:1, which is down from the previous week of 3.24:1 and the ratio of 2 weeks ago of 2.91:1.

Soybean oil:

For the week, September soybean oil lost 32 points, December -46, January 2015 -49. The COT report revealed that managed money liquidated 2,731 contracts of their long positions and also liquidated 1,475 of their short positions. Commercial interests added 3,573 contracts to their long positions and also added 3,951 to their short positions. As of the latest report, managed money remains short soybean oil by ratio of 1.25:1, which is up slightly from the previous week of 1.22:1 and the ratio of 2 weeks ago of 1.22:1.

Corn:

For the week, September corn lost 6.50 cents, December -6.75, March 2015 -6.50. The COT report revealed that managed money liquidated 2,426 contracts of their long positions and added 4,431 contracts to their short positions. Commercial interests liquidated 13,622 contracts of their long positions and also liquidated 33,021 of their short positions. As of the latest report, managed money is long corn by ratio of 1.30:1, which is down slightly from the previous week of 1.33:1 and the ratio of 2 weeks ago of 1.34:1.

The current ratio of 1.30:1 is the lowest since the beginning of the current bear market. Like soybeans, we think corn will not bottom until managed money assumes a net short position.  

December Chicago wheat:

For the week, September Chicago wheat lost 1.75 cents, December +1.25, March 2015 +2.25. The COT report revealed that managed money added 1,422 contracts to their long positions and liquidated 2,119 of their short positions. Commercial interests liquidated 7,678 contracts of their long positions and also liquidated 11,524 of their short positions. As of the latest report, managed money is short Chicago wheat by ratio of 1.59:1, which is down from the previous week of 1.65:1 and the ratio of 2 weeks ago of 1.82:1.

The current ratio of 1.59:1 is the lowest since the COT report of July 15 when managed money was short Chicago wheat by ratio of 1.60:1.

Kansas City wheat:

For the week, September Kansas City wheat lost 7.25 cents, December -1.25, March 2015 -0.50. The COT report revealed that managed money liquidated 159 contracts of their long positions and added 2,047 to their short positions. Commercial interests liquidated 2,150 of their long positions and also liquidated 5,740 of their short positions. As of the latest report, managed money remains long Kansas City wheat by ratio of 1.56:1, which is down from the previous week of 1.72:1, but about the same as the ratio of 2 weeks ago of 1.57:1.

For the month of August, December wheat was the out performer with a gain of 2.41%, December Kansas City wheat +0.59%, December soybean meal +0.54%, December corn -0.61%, November soybeans -5.34%, December soybean oil -11.70%.

Thus far in the 3rd quarter, December soybean meal is the out performer with a loss of 4.55%, December Chicago wheat -5.81%, December Kansas City wheat -9.02%, November soybeans -11.49%, December corn -14.23%, December soybean oil -17.91%.

Cotton:

For the week, December cotton advanced 39 points, March 2015 +44, May 2015+44. The COT report revealed that managed money added 166 contracts to their long positions and liquidated 3,797 contracts of their short positions. Commercial interests added 1,146 contracts to their long positions and also added 5,945 to their short positions. As of the latest report, managed money is now long cotton by ratio of 1.01:1, which is a complete reversal from the previous week when they were short by ratio of 1.10:1. Two weeks ago, managed money was long cotton by ratio of 1.03:1.

Note the change to net long from net short was driven by the liquidation of short positions, not by the addition of new long positions.

Sugar #11:

For the week, October sugar lost 15 points, March 2015 -7, May 2015-1. The COT report revealed that managed money added 5,615 contracts to their long positions and liquidated 296 of their short positions. Commercial interests added 4,959 contracts to their long positions and also added 11,719 to their short positions. As of the latest report, managed money is short sugar by ratio of 1.05:1, which is down from the previous week of 1.08:1 and about the same as 2 weeks ago of 1.04:1.

Coffee:

For the week, December coffee advanced 13.85 cents, March 2015 +13.95, May 2015+13.80. The COT report revealed that managed money added 1,355 contracts to their long positions and also added 7 contracts to their short positions. Commercial interests liquidated 5,796 contracts of their long positions and also liquidated 3,741 of their short positions. As of the latest report, managed money remains long coffee by ratio of 7.62:1, which is up only slightly from the previous week of 7.42:1 and the ratio of 2 weeks ago of 7.26:1.

Cocoa:

For the week, December cocoa advanced $35.00, March 2015 +25.00, May 2015+18.00.The COT report revealed that managed money liquidated 925 contracts of their long positions and also liquidated 140 of their short positions. Commercial interests added 846 contracts to their long positions and also added 672 to their short positions. As of the latest report, managed money remains long cocoa by ratio of 3.81:1, which is down from the previous week of 3.97:1, but up somewhat from the ratio of 2 weeks ago of 3.69:1.

For the month of August, December cotton was the out performer with a gain of 5.89%, December cocoa +1.35%, December coffee +1.23%, October sugar -5.89%.

Thus far in the 3rd quarter, December coffee is the out performer with a gain of 12.59%, December cocoa +3.33%,December cotton -9.44%, October sugar -13.99%.

Live cattle:

For the week, October live cattle advanced 4.42 cents, December +4.10, February 2015 +3.63. The COT report revealed that managed money liquidated 3,657 contracts of their long positions and added 2,511 to their short positions. Commercial interests added 2,412 to their long positions and liquidated 7,626 contracts of their short positions. As of the latest report, managed money is long live cattle by ratio of 8.29:1, which is down from the previous week of 10.67:1, and down dramatically from the ratio of 2 weeks ago of 16.05:1.

The current ratio of 8.29:1, is the lowest since the COT tabulation date of July 29 when managed money was long live cattle by ratio of 6.92:1.

From the time that December cattle made its secondary bottom at 1.47500 on August 21 through August 28, total open interest has declined by 3,123 contracts while December cattle gained 4.10 cents in this time frame. The open interest action in hogs is bullish whereas the open interest action in cattle is bearish from August 21-August 28. On August 29, December cattle advanced 1.250 cents and preliminary stats show that open interest increased by 1.735 contracts on volume of 45,408 contracts. In order for December cattle to generate a short-term buy signal, the low the day must be above OIA’s key pivot point of 1.54000.On Friday, December cattle closed at 1.53950.

Lean hogs: December lean hogs are close to generating a short-term buy signal.

For the week, October lean hogs advanced 5.25 cents, December +4.85, February 2015 +4.30. The COT report revealed that managed money added 1,247 contracts to their long positions and also added 4,124 to their short positions. Commercial interests added 1,290 contracts to their long positions and also added 221 to their short positions. As of the latest report, managed money is long lean hogs by ratio of 3.27:1, which is down substantially from the previous week of 4.16:1 and down dramatically from the ratio of 2 weeks ago of 6.01:1.

The current ratio of 3.27:1, is the lowest since the COT tabulation date of January 21, 2014 when managed money was long lean hogs by ratio of 3.15:1. The high for the ratio occurred in the COT report of April 22 when managed money was long lean hogs by ratio of 49.42:1.

On July 14, December hogs topped at 1.05500 and proceeded to collapse to 84.275 on August 21. From top to bottom, the loss was 21.225 cents, which is likely one of the largest percentage declines in hog prices during the past several years in a 5 week period. From August 21 through August 28, December hogs have advanced 2.825 cents and during this time, total open interest increased 8,441 contracts, which is bullish open interest action relative to the price advance.

On August 29, December hogs advanced 1.62 cents and total open interest according to the preliminary stats showed an increase of 678 contracts. Remember, we use only final stats and preliminary open interest figures are subject to change. However, it now appears that hogs are on the upswing and that a short-term buy signal will be generated shortly. For this to occur, the low the day must be above OIA’s key pivot point of 91.320.

On August 29, December hogs closed at 92.000, above the pivot point, which is the first sign that a short-term buy signal is in the offing. Another factor weighing in favor of a continued advance is the seasonal tendency for hog prices to bottom in late August and trend higher into mid October. The term structure of hogs is bullish with the December contract selling at a premium to February and April 2015. Also, the number of speculative longs have been squeezed out of the market as evidenced by the multi-month low in the net long position of managed money. OIA will provide guidance regarding the timing to enter bullish positions once the short-term buy signal has been generated.

For the month of August, December lean hogs was the out performer with a loss of 1.79%, December cattle -2.22%, October cattle -3.50%, October lean hogs -4.62%.

Thus far in the 3rd quarter, December cattle is the out performer with a loss of 0.06%, October cattle -1.34%, December lean hogs -6.69%, October lean hogs -13.85%.

WTI crude oil:

For the week, October WTI crude oil advanced $2.31, November +1.85, December +1.45. The COT report revealed that managed money added 100 contracts to their long positions and also added 1,051 to their short positions. Commercial interests liquidated 1,856 contracts of their long positions and added 4,374 to their short positions. As of the latest report, managed money is long WTI crude oil by ratio of 4.01:1, which is down from the previous week of 4.07:1 and down dramatically from the ratio of 2 weeks ago of 5.44:1.

The current ratio of 4.01:1 is the lowest since the January 21, 2014 COT report when managed money was long WTI crude oil by ratio of 4.21:1. Note the inversion widened between front and back months. This is bullish.

Heating oil:

For the week, October heating oil advanced 2.58 cents, November +2.53, December +2.48. The COT report revealed that managed money added 255 contracts to their long positions and also added 6,099 to their short positions. Commercial interests liquidated 2,792 contracts of their long positions and added 1,082 contracts to their short positions. As of the latest report, managed money is short heating oil by ratio of 1.33:1, which is up from the previous week of 1.16:1, but slightly below the ratio of 2 weeks ago of 1.36:1.

Gasoline:

For the week, October gasoline advanced 3.40 cents, November +3.33, December +3.07. The COT report revealed that managed money liquidated 4,287 contracts of their long positions and added 5,008 contracts to their short positions. Commercial interests liquidated 4,996 contracts of their long positions and also liquidated 12,315 of their short positions. As of the latest report, managed money remains long gasoline by ratio of 1.60:1, which is down significantly from the previous week of 2.04:1 and the ratio of 2 weeks ago of 2.20:1.

The current ratio of 1.60:1 is extremely low historically and the previous low reading for 2014 occurred in the COT report of January 28, 2014 when managed money was long by ratio 2.12:1. We went back to the COT report of November 5, 2013  when December 2013 gasoline made a low that week of $2.4945 and the reading in the November 5 report showed managed money long by ratio of 2.88:1. Do not press the short side of gasoline.

Natural gas: On August 27, March 2015 natural gas generated a short-term buy signal, but remains on an intermediate term sell signal.

On August 28, October natural gas generated a short-term buy signal, but remains on an intermediate term sell signal.

For the week, October natural gas advanced 18.2 cents, November +16.0, December +13.5. The COT report revealed that managed money added 5,416 contracts to their long positions and liquidated 1,142 contracts of their short positions. Commercial interests added 11,367 to their long positions and also added 8,828 contracts to their short positions. As of the latest report, managed money is long natural gas by ratio of 1.10:1 which is up slightly from the previous week of 1.07:1, but a complete reversal from 2 weeks ago when managed money was short natural gas by ratio of 1.01:1.

Now that October natural gas has generated a short-term buy signal, the market should have a small pullback lasting 1 maybe-2 days, and this is the opportunity to initiate bullish positions. October natural gas should find support at 3.930, slightly beneath the lows of August 26 (3.936) and August 27 (3.932 ) and the 20 day moving average of 3.932. The 50 day moving average is 4.050 and October natural gas closed at 4.065 on August 29, which means the pullback may be very shallow and short-lived.

The first indications the buy signal is false would be a close below $3.906, then 3.856.

From the August 10 Weekend Wrap:

“The current ratio is the lowest since the COT tabulation date of November 26, 2013 when managed money was short natural gas by ratio of 1.07:1. The trading range encompassed by that report was 3.549 – 3.884. The trading range during the current report was 3.749 – 3.915. We view the net short position of manage money as a confirmation that the low of 3.725 made in the September contract on July 28 will turn out to be the seasonal low for the year.”

“Last year at this time, October natural gas made seasonal low of 3.154 on August 8, 2013, then proceeded to rally to a high of 3.699 on September 4. The October contract made its major high at 3.820 on September 19, 2013, or a rally from a high for low of 66.6 cents. A 66.6 cent rally from the low of 3.725 made on July 28 would project a high of at least 4.391.Keep in mind, that natural gas stocks were considerably higher last year than they are today due to the extremely cold temperatures during the winter of 2013-2014. The heavy draw down of stocks during the winter has inventories below year ago levels. According to the Energy Information Administration report released on August 7, natural gas stocks were 538 Bcf less than last year at this time and 608 Bcf below the 5-year average of 2,997 Bcf.”

For the month of August, October ethanol was the out performer with a gain of 6.72%,October natural gas +5.78%, October gasoline -0.88%, October WTI crude oil -1.29%, October heating oil -1.32%, October Brent crude oil -3.01%.

Thus far in the 3rd quarter, October ethanol is the out performer with a gain of 5.89%, October heating oil -4.50%, October gasoline -7.56%, October Brent crude oil -7.71%, October WTI crude oil -7.72%, October natural gas -8.04%.

Copper:

For the week, December copper lost 6.25 cents. The COT report revealed that managed money added 3,543 contracts to their long positions and liquidated 5,184 of their short positions. Commercial interests liquidated 2,807 contracts of their long positions and added 3,067 to their short positions. As of the latest report, managed money remains long copper by ratio of 1.90:1, which is up dramatically from the previous week of 1.35:1 and about the same as 2 weeks ago of 1.92:1.

As the extract from the August 24 weekend report shows, OIA was highly skeptical of the advance in copper. Our daily reports analyzed the dismal open interest action as prices advanced and as a consequence advised clients to stand aside. Unfortunately, many professional money managers bought into the rally and have losses as a result or small profits at best.

From the August 24 Weekend Wrap:

“Despite the sharp move higher during 2 of the past 3 trading sessions, open interest has been declining, which is very negative for copper prices moving forward. For example, on August 20 when copper advanced 8.85 cents, total open interest declined by 3,772 contracts. On August 21 when copper declined fractionally by 10 points, total open interest declined by 2,686 contracts, and preliminary stats for August 22 show total open interest declined 593 contracts on volume of 54,971.We only use final numbers and these will not be released until Monday, therefore total open interest is subject to change. However, the picture for the past 3 days has not been one of a robust bull market, but rather one characterized by liquidation.”

Palladium:

For the week, December palladium advanced $20.85. The COT report revealed that managed money added 411 contracts to their long positions and liquidated 151 contracts of their short positions.Commercial interests liquidated 78 contracts of their long positions and also liquidated 223 of their short positions. As of the latest report, managed money remains long palladium by ratio of 11.11:1, which is up from the previous week of 10.30:1 and dramatically above the ratio of 2 weeks ago of 4.11:1.

Platinum:

For the week, October platinum advanced $6.20. The COT report revealed that managed money liquidated 2,081 contracts of their long positions and added 3,316 contracts to their short positions. Commercial interests added 54 contracts to their long positions and liquidated 2,756 of their short positions. As of the latest report, managed money remains long platinum by ratio of 6.31:1, which is a huge decline from the previous week of 17.17:1 and massively lower than the ratio of 2 weeks ago of 27.95:1.

The current ratio of 6.31:1, is the lowest since the April 29 COT report when managed money was long platinum by ratio of 6.76:1.

Gold:

For the week, December gold advanced $7.20. The COT report revealed that managed money liquidated 10,386 contracts of their long positions and added 11,637 to their short positions. Commercial interests added 682 contracts to their long positions and liquidated 11,262 of their short positions. As of the latest report, managed money is long gold by a ratio of 3.20:1, which is down dramatically from the previous week of 5.10:1 and the ratio of 2 weeks ago of 6.31:1.

The current ratio of 3.20:1 is the lowest since the June 24 COT report when managed money was long gold by ratio of 3.88:1.

Silver:

For the week, December silver advanced 3.3 cents. The COT report revealed that managed money added 1,430 contracts to their long positions and also added 3,416 to their short positions. Commercial interests added 1,647 contracts to their long positions and also added 1,401 to their short positions. As of the latest report, managed money is long silver by ratio of 1.50:1, which is down from the previous week of 1.65:1 and down substantially from the ratio of 2 weeks ago of 2.14:1.

The current ratio of 1.50:1, is the lowest since the June 17 COT report when managed money was long silver by ratio of 1.20:1.

For the month of August, December palladium was the out performer with a gain of 3.56%, December gold +0.29%, December copper -2.40%, October platinum -2.73%, December silver -4.76%.

Thus far in the 3rd quarter, December palladium is the out performer with a gain of 7.36%, December copper -1.22%, December gold -3.08%, October platinum -4.36%, December silver -7.65%.

Canadian dollar: On August 28, the September Canadian dollar generated a short-term buy signal, but remains on an intermediate term sell signal.

For the week, the September Canadian dollar advanced 64 pips. The COT report revealed that leveraged funds liquidated 2,761 contracts of their long positions and also liquidated 1,519 of their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio of 1.37:1, which is up from the previous week of 1.27:1, and a complete reversal from 2 weeks ago when leveraged funds were long the Canadian dollar by ratio of 1.10:1.

Australian dollar:

For the week, the September Australian dollar advanced 23 pips. The COT report revealed that leveraged funds added 6,314 contracts to their long positions and liquidated 566 of their short positions. As of the latest report, leveraged funds are long the Australian dollar by ratio of 3.12:1, which is up from the previous week of 2.78:1 and the ratio of 2 weeks ago of 2.70:1.

Swiss franc:

For the week, the September Swiss franc lost 54 pips. The COT report revealed that leveraged funds added 952 contracts to their long positions and liquidated 1,286 of their short positions. As of the latest report, leveraged funds are short the Swiss franc by ratio of 2.19:1, which is down from the previous week of 2.59:1 and down substantially from the ratio of 2 weeks ago when leveraged funds were short by 2.93:1.

British pound:

For the week, the September British pound lost 13 pips. The COT report revealed that leveraged funds liquidated 17,166 contracts of their long positions and also liquidated 5,198 of their short positions. As of the latest report, leveraged funds are long the British pound by ratio of 1.95:1, which is down from the previous week of 2.06:1 and down dramatically from the ratio of 2 weeks ago of 2.51:1.

Euro:

For the week, the September euro lost 1.08 cents. The COT report revealed that leveraged funds liquidated 7,269 of their long positions and added 1,601 to their short positions. As of the latest report, leveraged funds are short the euro by ratio of 3.42:1, which is up substantially from the previous week of 2.97:1 and the ratio of 2 weeks ago of 2.91:1.

The current ratio of 3.42:1 is the highest short ratio since the beginning of the current bear market.

Yen:

For the week, the September yen lost 17 pips. The COT report revealed that leveraged funds added 45 contracts to their long positions and added 16,832 to their short positions. As of the latest report, leveraged funds are short the yen by ratio 3.85:1, which is up from the previous week of 3.32:1 and up slightly from the ratio of 2 weeks ago of 3.78:1.

Dollar index:

For the week, the September dollar index advanced 41 points. The COT report revealed that leveraged funds liquidated 139 contracts of their long positions and added 501 to their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 1.32:1, which is up slightly from the ratio of the previous week of 1.30:1 and the ratio of 2 weeks ago of 1.29:1.

For the month of August, the September dollar index was the out performer with a gain of 1.47%, September Australian dollar +0.65%, September Canadian dollar +0.34%, September Swiss franc -1.07%, September yen -1.18%, September British pound -1.87%, September euro -1.92%.

Thus far in the 3rd quarter, the September dollar index is the out performer with a gain of 3.65%, September Australian dollar -0.54%, September Canadian dollar -1.75%, September yen -2.69%, September British pound -3.12%, September Swiss franc -3.53%, September euro -4.11%.

S&P 500 (250 x):

The S&P 500 futures contract advanced 13.60 points. The COT report revealed that leveraged funds liquidated 1,336 contracts of their long positions and added 179 to their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by ratio of 1.84:1, which is up from the previous week of 1.60:1 and the ratio of 2 weeks ago of 1.54:1.

For the month of August, the S&P 400 cash index was the out performer with a gain of 4.92%, NASDAQ 100 cash index +4.88%, Russell 2000 cash index +4.84%, S&P 500 cash index +3.77%, Dow Jones Industrial Average cash index +3.23%, New York Composite cash index +2.98%.

Thus far in the 3rd quarter, the NASDAQ 100 cash index is the out performer with a gain of 6.05%, S&P 500 cash index +2.20%, Dow Jones Industrial Average cash index +1.52%, New York Composite cash index + 0.61%, S&P 400 cash index +0.37%, Russell 2000 cash index -1.56%.