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The time frame for the current Commitments of Traders report is from Wednesday, August 6 through Tuesday, August 18.

Soybeans:

For the week, September soybeans lost 20.00 cents, new crop November -27.00, January 2016 -28.50. The COT report revealed that managed money liquidated 16,504 contracts of their long positions and added 17,340 to their short positions. Commercial interests added 21,576 contracts to their long positions and liquidated 20,108 of their short positions. As of the latest report, managed money is long soybeans by a ratio of 1.63:1, which is down sharply from the previous week of 2.95:1 and the ratio two weeks ago of 2.58:1.

As of the current report, managed money remains net long soybeans by 32,420 contracts.

Soybean meal:

For the week, September soybean meal advanced $1.70, October +80 cents, new crop December +40. The COT report revealed that managed money liquidated 12,061 of their long positions and added 1,243 to their short positions. Commercial interests added 3,345 to their long positions and liquidated 14,460 of their short positions. As of the latest report, managed money remains long soybean meal by a ratio of 2.22:1, which is down from the previous week of 2.67:1 and the ratio two weeks ago of 2.82:1.

As of the current report, managed money remains net long soybean meal by 42,461 contracts.

Soybean oil:

For the week, September soybean oil lost 1.72 cents, October -1.75, new crop December -1.73. The COT report revealed that managed money added 5,010 to their long positions and also added 8,402 to their short positions. Commercial interests added 3,006 to their long positions liquidated 1,722 of their short positions. As of the latest report, managed money short soybean oil by a ratio of 1.16:1, which is up from the previous week of 1.12:1, but down from the ratio two weeks ago of 1.20:1.

During the past week, September, October and December 2015 soybean oil made new contract lows of 27.13, 27.21 and 27.44 respectively. The September contract traded at the lowest price on the monthly continuation chart since November 2006 when the December 2006 contract made a low of 26.70. This week, September soybean oil broke below the December 2008 low of 27.90, which occurred at the height of the financial crisis.

Corn:

For the week, September corn advanced 1.25 cents, new crop December +1.75, March 2016 +1.75. The COT report revealed that managed money added 2,105 to their long positions and also added 23,403 contracts to their short positions. Commercial interests added 19,693 to their long positions and liquidated 12,594 contracts of their short positions. As of the latest report, managed money remains long corn by a ratio of 1.37:1, which is down from the previous week of 1.55:1 and almost half the ratio two weeks ago of 2.26:1.

As of the current report, managed money remains net long 70,855 contracts of corn and managed money holds 262,880 contracts of long positions.

During the past three COT reporting periods, managed money has added an astounding 133,838 contracts to their short positions. However, they have liquidated only 25,681 contracts of their long positions. From July 22 (which begins the COT report tabulated on July 28 through August 18, the tabulation of the third report) September corn fell from a high of 4.07  1/2 on July 22 to a low of 3.46 1/2 on August 12. Clearly, managed money longs have horrific losses. This massive overhang of long positions is a barrier to any sustained rally.

The dominant action for the past three COT reporting periods by managed money has been their aggressive short selling. However, this has been offset to a great extent by commercials who in the most recent four COT reports beginning with the report tabulated on July 28 have added 56,671 contracts to their long positions and liquidated 69,884 of their short positions.

The current setup is as follows: Managed money is holding 262,880 contracts long and 192,025 contracts short. The majority of short positions have been initiated during the past three weeks (133,838), which means that most of these are showing profits and at worst break even or minor losses.

On the other hand, managed money longs holding 262,880 contracts are almost all showing losses and the majority of these substantial losses. When contemplating the next major move, we must ask ourselves which side of the equation is more motivated to liquidate: those that have profits/small losses, or speculators showing large losses.

Remember, funds holding losing long positions in corn are reporting these losses on their monthly statements to clients. This undoubtedly is creating problems for fund managers because of the threat of capital withdrawals from clients. As a result, fund managers holding losing corn positions are looking to liquidate them under the best financial circumstances as possible. This means that a positive USDA report in September, which would ordinarily cause the market to have a substantial rally, may have an advance that disappoints due to the liquidation of managed money longs on the rally.

Managed money short-sellers who are in a much more favorable financial position have no reason to panic (cover positions) because the supply- demand situation for corn is already well-known (with some possible adjustments in upcoming reports). Additionally, they were chased out of corn during the last rally and will likely be reluctant to cover positions now that the size of the crop is better known. Also, the very bearish economic scenario globally, and in particular China is having an important negative psychological effect on speculators. They are watching many commodities make new contract lows on a weekly basis.

In order for a rally to be sustained, the lopsided long position of managed money must be reduced, and managed money as a group must again hold a large net short position.

Chicago wheat:

For the week, September Chicago wheat lost 7.00 cents, December -7.75, March 2016 -8.75. The COT report revealed that managed money added 1,543 to their long positions and liquidated 6,963 of their short positions. Commercial interests liquidated 3,096 of their long positions and also liquidated 30 contracts of their short positions. As of the latest report, managed money is short Chicago wheat by a ratio of 1.06:1, which is down from the previous week of 1.18:1 and the ratio two weeks ago of 1.21:1.

Kansas City wheat:

For the week, September Kansas City wheat lost 18.75 cents, December -17.25, March 2016 -17.00. The COT report revealed that managed money added 549 contracts to their long positions and liquidated 500 of their short positions. Commercial interests liquidated 566 of their long positions and added 2,391 to their short positions. As of the latest report, managed money is short Kansas City wheat by a ratio of 1.17:1, which is down from the previous week of 1.20:1, but up slightly from the ratio two weeks ago of 1.16:1.

During the past week, September, December and March 2016 Kansas City wheat have made new contract lows of 4.67 1/4, 4.88 1/4, and 5.02 respectively.

Thus far in the third quarter, September soybeans have been the out performer with a loss of 6.77%, September soybean meal -9.07%, September corn -13.45%, September soybean oil -18.47%, September Chicago wheat -18.88, September Kansas City wheat -22.82%.

Year to date, September soybeans have been the out performer with a loss of 5.51%, September soybean meal -10.34%, September corn -12.04%, September soybean oil -14.42%, September Chicago wheat -17.40%, September Kansas City wheat -27.09%.

Cotton: On August 17, December cotton generated an intermediate term buy signal after generating a short term buy signal on August 14.

For the week, December cotton advanced 96 points, March 2016 +89, May .16+87. The COT report revealed that managed money added 10,996 contracts to their long positions and liquidated 14,123 contracts of their short positions. Commercial interests liquidated 2,786 of their long positions and added 22,698 contracts to their short positions. As of the latest report, managed money is long by a ratio of 3.85:1, which is more than double the ratio of the previous week of 1.81:1 and up substantially from the ratio two weeks ago of 2.69:1.

As we have pointed out in our reports during the past week, commercial selling has been keeping a lid on cotton prices and this week’s COT report confirms this.

Sugar #11:

For the week, October sugar lost 24 points, March 2016 -26, May 2016-23. The COT report revealed that managed money liquidated 3,732 of their long positions and added 5,129 to their short positions. Commercial interests liquidated 596 contracts of their long positions and also liquidated 1,345 of their short positions. As of the latest report, managed money is short sugar by a ratio of 1.51:1, which is up from the previous week of 1.43:1 and the ratio two weeks ago of 1.39:1.

During the past week, March 2016 and May 2016 sugar contracts made new contract lows of 11.55 and 11.73 respectively.

Coffee:

For the week, September coffee lost 15.60 cents, December -14.70, March 2016 -14.50. The COT report revealed that managed money liquidated 110 contracts of their long positions and also liquidated 11,344 of their short positions. Commercial interests liquidated 6,959 of their long positions and added 5,478 to their short positions. As of the latest report, managed money is long coffee by ratio of 1.14:1, which is a complete reversal from the previous week when they were short by 1.22:1 and the ratio two weeks ago of 1.59:1.

As is typical, managed money assumed a net long position at the very top of the coffee market.

Cocoa:

For the week, September cocoa advanced $38.00, December +13.00, March 2016 +5.00. The COT report revealed that managed money liquidated 3,512 of their long positions and added 915 to their short positions. Commercial interests added 3,265 to their long positions and liquidated 6,852 of their short positions. As of the latest report, managed money is long cocoa by a ratio of 2.63:1, which is down from the previous week of 2.96:1 and the ratio two weeks ago of 3.32:1.

Live cattle:

For the week, October live cattle lost 3.00 cents, December -2.85, February 2016 -2.47. The COT report revealed that managed money added 463 contracts to their long positions and liquidated 906 of their short positions. Commercial interests liquidated 931 of their long positions also liquidated 3,083 of their short positions. As of the latest report, managed money is long live cattle by a ratio of 1.56:1, which is up slightly from the previous week of 1.51:1 and the ratio two weeks ago of 1.45:1.

Lean hogs:

For the week, October lean hogs lost 2.50 cents, December -2.95, February 2016 -2.40. The COT report revealed that managed money liquidated 3,809 of their long positions and also liquidated 3,861 of their short positions. Commercial interests added 137 contracts to their long positions also added 1,083 to their short positions. As of the latest report, managed money is long lean hogs by a ratio of 1.59:1, which is up from the previous week of 1.51:1, but down from the ratio two weeks ago of 1.68:1.

WTI crude oil:

October WTI crude oil lost $2.66, November -3.12, December -3.33. The COT report revealed that managed money liquidated 9,435 of their long positions and added 8,143 to their short positions. Commercial interests added 11,200 contracts to their long positions and also added 16,211 to their short positions. As of the latest report, managed money is long WTI crude oil by a ratio of 1.52:1, which is down from the previous week of 1.66:1 and the ratio two weeks ago of 1.86:1.

During the past week, October, November and December WTI crude oil made new contract lows of 39.86, 40.63, and 41.38 respectively.

The current ratio of 1.52:1 is a new low and is substantially below the ratio of 1.82:1 made in the COT report of March 24, 2015, one week after the April 2015 contract made its contract low of 42.03. In summary, managed money has never been as bearish on crude oil as they are in the current COT report during the entire collapse of WTI prices, which began in June 2014.

Heating oil:

For the week, September heating oil lost 9.55 cents, October -9.52, November -9.55. The COT report revealed that managed money liquidated 888 contracts of their long positions and also liquidated 1,873 of their short positions. Commercial interests liquidated 7,241 of their long positions also liquidated 3,794 of their short positions. As of the latest report, managed money is short heating oil by a ratio of 1.91:1, which is down fractionally from the previous week of 1.92:1, but up from the ratio two weeks ago of 1.80:1.

During the past week, September, October and November heating oil made new contract lows of 1.4507, 1.4598 and 1.4779 respectively.

Gasoline:

For the week, September gasoline lost 14.20 cents, October -12.11, November -11.12. The COT report revealed that managed money liquidated 518 contracts of their long positions and also liquidated 1,826 of their short positions. Commercial interests added 4,857 to their long positions and also added 7,707 to their short positions. As of the latest report, managed money is long gasoline by a ratio of 1.32:1, which is up from the previous week of 1.28:1 and the ratio two weeks ago of 1.30:1.

During the past week, October and November gasoline made new contract lows of 1.3378 and 1.2983 respectively.It is a testament to the weakness of the petroleum complex that gasoline is making contract lows despite the fact that the summer driving season has not ended and that the low period of consumption is ahead.

Natural gas:

For the week, September natural gas lost 12.5 cents, October -14.0, November -15.1. The COT report revealed that managed money added 1,610 to their long positions and also added a massive 42,410 contracts to their short positions. Commercial interests liquidated 4,678 of their long positions and also liquidated 8,059 of their short positions. As of the latest report, managed money is short natural gas by a ratio of 1.73:1, which is a jump from the previous week of 1.53:1 and the ratio two weeks ago of 1.55:1.

Thus far in the third quarter, September natural gas is the out performer with a loss of 5.70%, October heating oil -23.49%, October gasoline -23.95%, October Brent crude oil -28.62%, October WTI crude oil -32.83%.

Year to date, September natural gas is the out performer with a loss of 10.99%, October gasoline -13.81%, October Brent crude oil -21.27%, October heating oil -21.97%, October WTI crude oil -30.76%.

Copper:

For the week, December copper lost 5.45 cents. The COT report revealed that managed money added 388 contracts to their long positions and liquidated 4,797 of their short positions. Commercial interests liquidated 3,816 of their long positions and added 424 contracts to their short positions. As of the latest report, managed money short copper by a ratio of 1.79:1, which is down from the previous week of 1.95:1 and below the high short ratio of 2.00:1 made two weeks ago.

During the past week, December copper made a new contract low of $2.2625.

Palladium:

For the week, December palladium lost $13.35. The COT report revealed that managed money added 222 contracts to their long positions and liquidated 1,016 of their short positions. Commercial interests liquidated 506 contracts of their long positions and also liquidated 253 of their short positions. As of the latest report, managed money is long palladium by a ratio of 1.70:1, which is up from the previous week of 1.55:1 and the ratio two weeks ago of 1.57:1.

Platinum:

For the week, October platinum advanced $33.10. The COT report revealed that managed money added 681 contracts to their long positions and liquidated 1,197 of their short positions. Commercial interests liquidated 578 contracts of their long positions and added 1,501 to their short positions. As of the latest report, managed money is long platinum by a ratio of 1.31:1, which is up from the previous week of 1.23:1 and the ratio two weeks ago of 1.22:1.

Gold: On August 20, December gold generated a short-term buy signal, but remains on an intermediate term sell signal.

For the week, December gold advanced $46.90. The COT report revealed that managed money added 3,568 to their long positions and liquidated 9,779 of their short positions. Commercial interests liquidated 918 of their long positions and added 1,477 to their short positions. As of the latest report, managed money is long gold by a ratio of 1.08:1, which is a reversal from the previous week when they were short by a ratio of 1.05:1 and the ratio two weeks ago of 1.11:1.

We have been unimpressed with the rally in gold and silver, and tend to think the move will reverse. The open interest action in gold has been positive, but based upon the increase, it is not indicative of a massive move to the precious metals. September and December silver generated short-term buy signals on August 11 and through August 21, the December contract has lost 18.00 cents. Additionally, the open interest action for silver has been negative and as the stats in the most recent COT report indicate, managed money remains net short. The move up from early August lows is not supported by fund managers.

Silver:

For the week, December silver advanced 8.5 cents. The COT report revealed that managed money liquidated 1,935 of their long positions and also liquidated 1,845 of their short positions. Commercial interests added 2,068 to their long positions also added 3,149 to their short positions. As of the latest report, managed money is short silver by a ratio of 1.008:1, which is up slightly from the previous week of 1.006:1, but substantially below the ratio two weeks ago of 1.28:1.

Thus far in the third quarter, December gold is the out performer with a loss of 1.23%, December silver -1.80%, October platinum -4.83%.

Year to date, December gold is the out performer with a loss of 2.34%, December silver -2.49%, October platinum -15.09%.

Canadian dollar:

For the week, the September Canadian dollar lost 52 pips. The COT report revealed that leverage funds liquidated 6,581 of their long positions and also liquidated 4,627 contracts of their short positions. As of the latest report, leverage funds are short the Canadian dollar by a ratio of 7.18:1, which is a large jump from the previous week of 4.45:1 and the ratio two weeks ago of 3.41:1.

Australian dollar:

For the week, the September Australian dollar lost 47 pips. The COT report revealed that leverage funds liquidated 1,037 of their long positions also liquidated 381 of their short positions. As of the latest report, leverage funds are short the Australian dollar by a ratio of 7.85:1, which is a sizable jump from the previous week of 7.01:1 and the ratio two weeks ago of 6.15:1.

Swiss franc: On August 21, the September and December Swiss franc generated short term buy signals, but remain on intermediate term sell signals.

For the week, the September Swiss franc advanced 3.07 cents. The COT report revealed that leverage funds liquidated 1,473 of their long positions and added 1,311 to their short positions. As of the latest report, leverage funds are short the Swiss franc by a ratio of 2.44:1, which is a sizable jump from the previous week of 1.81:1 and the ratio two weeks ago of 1.20:1.

Just as managed money became extremely bearish on the Swiss franc, the franc had one of its largest rallies during the past couple of months.

British Pound: On August 19, the September and December British pound generated short term buy signals and remain on intermediate term buy signals.

For the week, the September British pound advanced 47 pips. The COT report revealed that leverage funds added 1,520 to their long positions and also added 3,829 to their short positions. As of the latest report, leverage funds are long the British pound by a ratio of 2.18:1, which is down from the previous week of 2.44:1 and the ratio two weeks ago of 2.77:1.

Euro: On August 21, the September and December euro generated intermediate term buy signals after generating short-term buy signals on August 13.

For the week, the September euro advanced 2.34 cents. The COT report revealed that leverage funds added 1,841 to their long positions and liquidated 11,499 contracts of their short positions. As of the latest report, leverage funds are short the euro by a ratio of 2.40:1, which is down from the previous week of 2.81:1 and the ratio two weeks ago of 2.83:1.

Yen:

For the week, the September yen advanced 141 pips. The COT report revealed that leverage funds liquidated 435 contracts of their long positions and also liquidated 270 of their short positions. As of the latest report, leverage funds are short the yen by a ratio of 5.73:1, which is up from the previous week of 5.64:1 and is a substantial increase from the ratio two weeks ago of 4.05:1.

Managed money increased their bearish positions at the very bottom of the trading range and then the yen had one of its largest rallies of the past month.

Dollar index: On August 21, the September and December dollar indices generated intermediate term sell signals after generating short-term sell signals on August 13.

For the week, the September dollar index lost 1.53 points. The COT report revealed that leverage funds added 5,565 to their long positions and also added 2027 to their short positions. As of the latest report, leverage funds are long the dollar index by a ratio of 2.00:1, which is up from the previous week of 1.85:1, and almost double the ratio two weeks ago of 1.08:1.

Managed money increased their net long exposure just before the dollar index took a dive.

Thus far in the third quarter, the September euro is the out performer with a gain of 1.95%, September Yen +0.13%, September British pound -0.18%, September dollar index -0.61%, September Swiss franc -1.53%, September Australian dollar -4.76%, September Canadian dollar -5.10%.

Year to date, the September dollar index is the out performer with a gain of 5.19%, September Swiss franc +4.38%, September British pound -0.06%, September Yen -2.21%, September euro -6.31%, September Australian dollar -9.89%, September Canadian dollar -11.36%.

S&P 500 (250 x):

For the week, the September S&P 500 futures contract lost 118.00 points. The COT report revealed that leverage funds added 2,421 to their long positions and liquidated 1,207 of their short positions. As of the latest report, leverage funds are short the S&P 500 futures contract by a ratio of 1.14:1, which is down substantially from the previous week of 1.86:1 and the ratio two weeks ago of 2.55:1.

Leverage funds reduced their net short position just before the market fell sharply. 

Thus far in the third quarter, the S&P 500 cash index is the out performer with a loss of 4.47%, NASDAQ 100 cash index -4.54%, S&P 400 cash index -5.26%, New York Composite cash index -5.64%, Dow Jones Industrial Average cash index -6.58%, Russell 2000 cash index -7.75%.

Year to date, the NASDAQ 100 cash index is the out performer with a loss of 0.92%, S&P 400 cash index -2.01%, Russell 2000 cash index -3.98%, S&P 500 cash index -4.28%, New York Composite cash index -5.94%, Dow Jones Industrial Average cash index -7.65%.

S&P 500 E mini: On August 20, the September and December S&P 500 E mini generated intermediate term sell signals after generating short-term sell signals on July 27.

10 Year Treasury Note:

For the week, the September 10 year treasury note advanced 1-10 points. The COT report revealed that leverage funds liquidated 33,791 contracts of their long positions and added 24,862 to their short positions. As of the latest report, leverage funds are short the 10 year note by a ratio of 1.96:1, which is above the previous week of 1.77:1 and the ratio two weeks ago of 1.94:1.

On Friday, the September note made a high of 128-280, which is the highest print since 128-290 made on April 29. Leverage funds have been on the wrong side of the market, and at the very least, we expect a test of the April 6 high of 129-290. On July 6, OIA announced that the September 10 year note generated a short-term buy signal and an intermediate term buy signal on August 3.