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The time frame for this week’s Commitments of Traders report is from Wednesday, December 10 through Tuesday, December 16.

The World Agriculture Supply Demand report will be released by the USDA on January 12. This report generally is a major market mover, and some commodities may begin to anticipate the findings in the report and react accordingly. Clients should keep this in mind when formulating trading strategies prior to the report. 

Soybeans:

For the week, January soybeans lost 16.75 cents, March -15.25, May -13.50. The COT report revealed that managed money added 3,433 contracts to their long positions and also added 6,996 to their short positions. Commercial interests liquidated 7,060 of their long positions and also liquidated 7,507 contracts of their short positions. As of the latest report, managed money is long soybeans by ratio 1.89:1, which is down from the previous week of 2.07:1, but up from the ratio of 2 weeks ago of 1.45:1.

Soybean meal:

For the week, January soybean meal lost $3.50, March -4.30, May -3.60. The COT report revealed that managed money liquidated 3,805 contracts of their long positions and added 2,254 to their short positions. Commercial interests added 7,482 contracts to their long positions and also added 700 to short positions. As of the latest report, managed money is long soybean meal by ratio of 2.63:1, which is down from the previous week of 2.98:1 and the ratio of 2 weeks ago of 3.36:1.

The current ratio of 2.63:1, is the lowest since the COT report of October 14, 2014 when managed money was long soybean meal by ratio of 2.10:1.

The net long position of managed money in soybean meal has been decreasing ever since the COT report of November 11. On November 11, managed money was long soybean meal by ratio of 4.85:1.By the December 16 report, the ratio had fallen to 2.63:1.The net long position held by managed money on November 11 was 70,106 contracts and by the December 16 report, had been pared to 48,045 contracts. During this time, March soybean meal has lost 4.03%, or $14.80.

This is actually a minor decline, and does not explain the hefty 22,061 contract decline of managed money between the November 11 and December 16 reports. We conclude that managed money is becoming disillusioned with soybean meal and the reason for its importance is that soybean meal has been the leader of the complex for most of 2014.

On the other hand, the net long position held by managed money for soybeans was 54,905 contracts on November 11 and by December 16 had actually increased to 55,641 contracts, or a bump of 736 contracts.During this time, March soybeans have lost 33.50 cents, or -3.15%.In summary, both soybeans and soybean meal had nearly the same percentage decline, but soybean meal has lost a significant amount of open interest and has increased in soybeans.

It is important to keep in mind that longer-term soybean meal moving averages are in a bearish set up. The 50 day moving average stands at 344.10- 200 day moving average 357.70. The short-term averages indicate that March soybean meal is trading at fair value. The 5 day stands at $351.60 and the 20 day moving average is 352.60. March soybean meal closed at 352.00 on Friday. We think a short-term sell signal is inevitable, and that clients should be looking to initiate bearish positions upon a close below 348.20, which is OIA’s key pivot point for December 19. A confirmed sell signal will occur when the high for the day is below the pivot point.

Soybean oil:

For the week, January soybean oil lost 39 points, March -41, May -40. The COT report revealed that managed money liquidated 134 contracts of their long positions and also liquidated 6,263 of their short positions. Commercial interests added 547 contracts to their long positions and also added 2,266 to their short positions. As of the latest report, managed money is long soybean oil by ratio 1.33:1, which is up from the previous week of 1.19:1 and the ratio of 2 weeks ago of 1.18:1.

The increase in the soybean oil ratio was due solely to the sizable liquidation of short positions.

Corn:

For the week, March corn advanced 3.00 cents, May +3.25, July +4.50. The COT report revealed that managed money liquidated 6,061 contracts of their long positions and also liquidated 11,078 of their short positions. Commercial interests added 11,860 contracts to their long positions and also added 20,623 contracts to their short positions. As of the latest report, managed money is long corn by ratio 3.94:1, which is up from the previous week of 3.51:1 and up substantially from the ratio of 2 weeks ago of 2.75:1.

The current ratio of 3.94:1 is the highest since the COT report of May 20, 2014 when managed money was long corn by ratio of 3.77:1.

Chicago wheat:

For the week, March Chicago wheat advanced 25.75 cents, May +26.25, July +26.50. The COT report revealed that managed money added 2,557 contracts to their long positions and liquidated 9,332 of their short positions. Commercial interests liquidated 6,075 contracts of their long positions and added 8,981 contracts to their short positions. As of the latest report, managed money is long Chicago wheat by ratio of 1.23:1, which is up from the previous week of 1.07:1 and a complete reversal from 2 weeks ago when managed money was short Chicago wheat by ratio of 1.05:1.

The current ratio of 1.23:1 is the highest since the May 27, 2014 COT report when managed money was long Chicago wheat by ratio of 1.44:1.

Kansas City wheat:

For the week, March Kansas City wheat advanced 31.75 cents, May +33.25, July +31.75. The COT report revealed that managed money liquidated 1,401 contracts of their long positions and added 1,425 to their short positions. Commercial interests liquidated 877 contracts of their long positions and also liquidated 238 of their short positions. As of the latest report, managed money is long Kansas City wheat by ratio of 2.54:1, which is down from the previous week of 2.96:1 and the ratio of 2 weeks ago of 2.65:1.

Thus far in the 4th quarter, March Chicago wheat is the out performer with a gain of 28.90%, March corn + 23.09, March soybean meal +19.04%, March Kansas City wheat +18.56%, March soybeans +11.86%, March soybean oil -2.08%.

Year to date, March soybean meal is the out performer with a gain of 0.11%, March Kansas City wheat -1.44%, March Chicago wheat -2.54%, March soybeans -9.64%, March corn -10.95%, March soybean oil -20.65%.

Cotton:

For the week, March cotton advanced 35 points, May +28, July +36. The COT report revealed that managed money added 2,352 contracts to their long positions and liquidated 666 of their short positions. Commercial interests added 2,968 contracts to their long positions and also added 2,017 to their short positions.As of the latest report, managed money is long cotton by ratio of 1.04:1, which is a complete reversal from the previous week when they were short by ratio of 1.03:1. Two weeks ago, managed money was short cotton by ratio of 1.08:1.

Sugar #11:

For the week, March sugar closed unchanged, May -4 points, July -6. The COT report revealed that managed money liquidated 16,075 contracts of their long positions and also liquidated 10,892 of their short positions. Commercial interests added 5,950 contracts to their long positions and also added 7,573 to their short positions. As of the latest report, managed money is short sugar by ratio of 1.37:1, which is up from the previous week of 1.31:1 and the ratio of 2 weeks ago of 1.31:1.

Coffee:

For the week, March coffee advanced 70 points, May +70, July +75. The  COT report revealed that managed money liquidated 1,199 contracts of their long positions and also liquidated 274 of their short positions. Commercial interests added 1,676 contracts to their long positions and liquidated 638 contracts of their short positions. As of the latest report, managed money is long coffee by ratio of 4.68:1, about the same as the previous week of 4.67:1, but down from the ratio of 2 weeks ago of 5.98:1.

The current ratio of 4.68:1 is the lowest since September 23, 2014 when managed money was long coffee by ratio of 4.91:1. 

The positive weekly close for coffee was the first since the week of November 10, 2014. Additionally, for the past 3 COT reporting periods (December 2, 9 and 16), commercial interests have added a total of 7,365 contracts to their long positions and liquidated 3,561 of their short positions. These two factors may be the first indication that coffee is near a bottom.

Cocoa:

For the week, March cocoa advanced $123.00, May +108.00, July +98.00. The COT report revealed that managed money liquidated 233 contracts of their long positions and also liquidated 2,736 of their short positions. Commercial interests liquidated 769 contracts of their long positions and added 2,901 to their short positions. As of the latest report, managed money is long cocoa by ratio of 3.71:1, which is up substantially from the previous week of 3.18:1 and the ratio of 2 weeks ago of 3.17:1.

Note the increase in the ratio for cocoa was due to the liquidation of short positions, not the addition of new long positions by managed money.

Thus far in the 4th quarter, March cotton is the out performer with a gain of 0.73%, March cocoa -8.56%, March sugar -8.94%, March coffee -11.52%.

Year to date, March coffee is the out performer with a gain of 41.97%, March cocoa +11.07%, March sugar -15.61%, March cotton -22.89%.

Live cattle: On December 15, February live cattle generated an intermediate term sell signal after generating a short-term sell signal on December 3.

For the week, February live cattle lost 2.07 cents, April -1.73, June -1.57. The COT report revealed that managed money liquidated 6,396 contracts of their long positions and also liquidated 518 of their short positions. Commercial interests added 5,203 contracts to their long positions and liquidated 9310 of their short positions. As of the latest report, managed money remains long live cattle by ratio of 10.54:1, which is down slightly from the previous week of 10.63:1, but above the ratio of 2 weeks ago of 9.97:1.

The large net long position of manage money means there is plenty of fuel to fund a continued downside move after the market has had its counter trend rally. 

Lean hogs:

For the week, February lean hogs lost 1.35 cents, April -1.15, June -73 points. The COT report revealed that managed money liquidated 3,899 contracts of their long positions and added 2,685 contracts to their short positions. Commercial interests added 502 contracts to their long positions and liquidated 6,655 contracts of their short positions. As of the latest report, managed money remains long lean hogs by ratio of 3.29:1, which is down substantially from the previous week of 4.07:1 and the ratio of 2 weeks ago of 4.36:1.

Remarkably, managed money remains long lean hogs despite the collapse in prices. This began during the week of November 17 when February lean hogs made a high of 93.075 through this past week when they made a contract low of 78.675. This was the lowest print since the week of October 21, 2013 (77.750).

Thus far in the 4th quarter, April live cattle is the out performer with a loss of 1.44%, February live cattle -2.11%, April lean hogs -8.40%, February lean hogs -9.65%.

Year to date, February live cattle is the out performer with a gain of 21.20%, April live cattle +20.06%, February lean hogs +1.68%, April lean hogs +1.53%.

WTI crude oil:

For the week, January WTI crude oil lost $1.29, February -95, March -93. The COT report revealed that managed money added 12,903 contracts to their long positions and also added 685 to their short positions. Commercial interests liquidated 17,556 contracts of their long positions and also liquidated 4,383 contracts of their short positions. As of the latest report, managed money remains long WTI crude oil by ratio of 4.53:1, which is up from the previous week of 4.36:1 and the ratio of 2 weeks ago of 4.12:1.

Remarkably, the current ratio 4.53:1 is the highest since the weeks of September 20 (4.23:1) and October 21 (4.20:1).

This past week, January, February and March WTI contracts made new contract lows of 53.60, 53.95 and 54.34 respectively.

Heating oil:

For the week, January heating oil lost 5.38 cents, February -3.53, March -3.58. The COT report revealed that managed money added 3,568 contracts to their long positions and also added 4,540 to their short positions. Commercial interests liquidated 5,876 contracts of their long positions and also liquidated 11,008 contracts of their short positions. As of the latest report, managed money is short heating oil by a ratio of 1.60:1, which is down from the previous week of 1.64:1 and exactly the same as the ratio of 2 weeks ago of 1.60:1.

This past week, January, February and March heating oil contracts made new contract lows of 1.9264, 1.8676, and 1.8490 respectively.

Gasoline:

For the week, January gasoline lost 3.78 cents, February -3.45, March -3.39. The COT report revealed that managed money added 3,901 contracts to their long positions and also added 2,348 to their short positions. Commercial interests added 5,221 contracts to their long positions and also added 4,272 to their short positions. As of the latest report, managed money remains long gasoline by ratio of 3.50:1, which is down from the previous week of 3.74:1, but up from the ratio of 2 weeks ago of 3.14:1.

This past week, January, February and March gasoline contracts made new contract lows of 1.5138, 1.5279, and 1.5498 respectively.

Natural gas:

For the week, January natural gas lost 33.1 cents, February -31.8, March -31.9. The COT report revealed that managed money liquidated 10,273 contracts of their long positions and also liquidated 5,707 contracts of their short positions. Commercial interests liquidated 13,990 contracts of their long positions and also liquidated 12,817 of their short positions. As of the latest report, managed money is short natural gas by ratio of 1.15:1, which is up from the previous week of 1.12: 1 and the ratio of 2 weeks ago of 1.01:1.

This past week, January, February and March natural gas contracts made new contract lows of 3.444, 3.481, and 3.442 respectively.

Thus far in the 4th quarter, February ethanol is the out performer with a gain of 4.87%, January natural gas -18.81%, February heating oil -25.92%, February gasoline -33.23%, February Brent crude oil -34.56%, February WTI crude oil -37.26%.

Year to date, February ethanol is the out performer with a loss of 0.19%, January natural gas -21.46%, January heating oil -33.55%, February WTI crude oil -38.53%, February gasoline -38.90%, February Brent crude oil -44.02%.

Copper:

For the week, March copper lost 4.95 cents. The COT report revealed that managed money liquidated 980 contracts of their long positions and also liquidated 1,377 of their short positions. Commercial interests added 1,170 contracts to their long positions and also added 616 to their short positions. As of the latest report, managed money is short copper by ratio 1.14:1, which is about the same as the previous week of 1.15:1 and the ratio of 2 weeks ago of 1.17:1.

Palladium:

For the week, March palladium lost $11.45. The COT report revealed that managed money liquidated 281 contracts of their long positions and added 228 to their short positions. Commercial interests added 146 contracts to their long positions and liquidated 42 of their short positions. As of the latest report, managed money is long palladium by ratio of 9.48:1, which is down from the previous week of 10.75:1 and the ratio of 2 weeks ago of 13.09:1.

Platinum: On December 17, April platinum generated a short-term sell signal and remains on an intermediate term sell signal.

For the week, April platinum lost $35.00. The COT report revealed that managed money liquidated 833 contracts of their long positions and added 1,405 to their short positions. Commercial interests added 489 contracts to their long positions and also added 413 to their short positions. As of the latest report, managed money is long platinum by ratio of 2.29:1, which is down from the previous week of 2.64:1 and the ratio of 2 weeks ago of 2.40:1.

Gold:

For the week, February gold lost $26.50. The COT report revealed that managed money liquidated 3,077 contracts of their long positions and also liquidated 4,239 of their short positions. Commercial interests added 1,068 contracts to their long positions and also added 5,447 to their short positions. As of the latest report, managed money is long gold by ratio 3.57:1, which is up from the previous week of 3.27:1 and up substantially from the ratio of 2 weeks ago of 2.40:1.

Silver:

For the week, March silver lost $1.028. The COT report revealed that managed money liquidated 529 contracts of their long positions and added 3,740 to their short positions. Commercial interests added 3,265 contracts to their long positions and also added 2,471 to their short positions. As of the latest report, managed money is long silver by ratio 1.74:1, which is down from the previous week of 2.11:1 but up from the ratio of 2 weeks ago of 1.55:1.

Thus far in the 4th quarter, March palladium is the out performer with a gain of 4.04%, February gold -1.29%, March copper -4.08%, March silver -6.09%, April platinum -8.09%.

Year to date, March palladium is the out performer with a gain of 11.76%, February gold -1.02%, April platinum -13.26%, March copper -13.67%, March silver -17.89%.

Canadian dollar:

For the week, the March Canadian dollar lost 23 pips. The COT report revealed that leveraged funds added 163 contracts to their long positions and liquidated 1,535 of their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio of 2.87:1, which is down from the previous week of 3.01:1 and the ratio of 2 weeks ago of 3.52:1.

Australian dollar:

For the week, the March Australian dollar lost 98 pips. The COT report revealed that leveraged funds added 3,060 contracts to their long positions and also added 624 to their short positions. As of the latest report, leveraged funds are short the Australian dollar by ratio of 1.70:1, which is down from the previous week of 1.86:1 and the ratio of 2 weeks ago of 1.83:1.

This past week, the March Australian dollar made a new contract low of 80.54.

Swiss franc:

For the week, the March Swiss franc lost 2.02 cents. The COT report revealed that leveraged funds added 12,261 contracts to their long positions and liquidated 9,332 of their short positions. Remarkably, leveraged funds are now long the Swiss franc by ratio of 1.03:1, which is a complete reversal from the previous week when they were short by ratio of 3.16:1 and the ratio of 2 weeks ago of 3.51:1.

This past week, the March Swiss franc made a new contract low of 1.0169.

British pound:

For the week, the March British pound lost 72 pips. The COT report revealed that leveraged funds liquidated 1,382 contracts of their long positions and also liquidated 7,780 of their short positions. As of the latest report, leveraged funds are long the British pound by ratio of 1.03:1, which is a complete reversal from the previous week when leveraged funds were short the British pound by ratio of 1.14:1. Two weeks ago, leveraged funds were short the pound by ratio of 1.20:1.

Euro:

For the week, the March euro lost 2.24 cents. The COT report revealed that leveraged funds liquidated 24,527 contracts of their long positions and also liquidated 9,436 of their short positions.As of the latest report, leveraged funds are short the euro by a ratio of 3.72:1, which is up substantially from the previous week’s ratio of 2.41:1 and the ratio of 2 weeks ago of 3.20:1.

Yen:

For the week, the March yen lost 57 pips. The COT report revealed that leveraged funds liquidated 1,902 contracts of their long positions and also liquidated 1,884 their short positions. As of the latest report, leveraged funds are short the yen by ratio of 3.07:1, which is up from the previous week of 2.95:1, but slightly below the ratio of 2 weeks ago of 3.12:1.

Dollar index:

For the week, the March dollar index advanced 1.25 points. The COT report revealed that leveraged funds liquidated 4,309 contracts of their long positions and also liquidated 2,282 of their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 1.11:1, which is up from the previous week of 1.03:1 and about the same as 2 weeks ago of 1.10:1.

Thus far in the 4th quarter, the March dollar index is the out performer with a gain of 4.18%, March Swiss franc -3.01%, March euro -3.24%, March Canadian dollar -3.26%, March British pound -3.50%, March Australian dollar -6.92%, March yen -8.26%.

Year to date, the March dollar index is the out performer with a gain of 11.77%, March British pound -5.64%, March Canadian dollar -7.66%, March Australian dollar -8.86%, March Swiss franc -9.29%, March euro -11.36%, March yen -11.83%.

S&P 500 (250 x): On December 19, the March S&P 500 E mini generated a short-term buy signal, which reversed the December 12 short-term sell signal. The March E mini remains on an intermediate term buy signal.

For the week, the March S&P 500 futures contract advanced 76.70 points. The COT report revealed that leveraged funds liquidated 394 contracts of their long positions and also liquidated 757 of their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by ratio of 1.53:1, which is about the same as the previous week of 1.54:1, but up slightly from the ratio of 2 weeks ago of 1.37:1.

Thus far in the 4th quarter, the Russell 2000 cash index is the out performer with a gain of 8.56%, NASDAQ 100 cash index +5.74%, S&P 400 cash index +5.72%, S&P 500 cash index +4.99%, Dow Jones Industrial Average +4.47%, New York Composite cash index +1.75%.

Year to date, the NASDAQ 100 cash index is the out performer with a gain of 19.20%, S&P 500 cash index +12.03%, S&P 400+7.96%, Dow Jones Industrial Average cash index +7.41%, New York Composite cash index +4.71%, Russell 2000+2.78%.