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The time frame for the current Commitments of Traders report is from Wednesday, July 8 through Tuesday, July 14.

Soybeans:

For the week, August soybeans lost 17.25 cents, new crop November -18.25, January 2016 -15.50. The COT report revealed that managed money added 169 contracts to their long positions and liquidated 10,106 of their short positions. Commercial interests added 11,219 contracts to their long positions and also added 14,450 to their short positions. As of the latest report, managed money is long soybeans by a ratio of 2.81:1, which is a sizable jump from the previous week of 2.25:1 and the ratio two weeks ago of 2.03:1.

In last week’s report, we said that the highest ratio of managed money longs going back to July 2014 occurred in the December 9, 2014 report when managed money was long soybeans by a ratio of 2.07:1.We took a look at the COT stats for June 2014 and found that managed money was long soybeans by a ratio of 2.94:1 in the June 10, 2014 report. This means that managed money has never been as bullish as they are in the current report since 13 months ago.

To place this in context, consider that on June 10 2014, managed money was net long by 100,186 contracts, which represented a ratio of 2.94:1 and as of the July 14, 2015 COT report, managed money was net long by 73,509 contracts, or a ratio of 2.81:1. Although participation by managed money is considerably lower in the current report than last year, the ratio of long to short positions is approximately the same.

Commercial participation is a major contrast to that of managed money. For example, in the June 10, 2014 report, commercial interests held a net short position of 110,524 contracts, or a short ratio of 1.64:1 and by the current report, commercials were net short by 193,118 contracts or a short ratio of 2.01:1, which has more than compensated for the reduction in participation by managed money in the current report.In summary, commercial interests are far more bearish today than they were in the June 10, 2014 report.

The major difference between the current report and the one tabulated on June 10, 2014 is the price level of soybeans. For example, the trading range encompassed by the 2014 COT report of June 10 (June 4-June 10) was dramatically higher during June 2014 and the range from low to high was $14.52-14.95 3/4. In summary, managed money has never been this bullish since June 2014, but soybean prices are more than $4.00 lower.

We think that August soybean prices topped at 10.54 3/4 on July 1, and with managed money holding a net long position of over 73,000 contracts, selling pressure will again reassert itself as managed money liquidates this long positions as prices move lower and new short-sellers enter the market further depressing prices while the dollar index continues its ascent.

We now have two back-to-back COT reports, which confirm that managed money new buying has not been supporting higher soybean prices. In last weekend’s report, OIA reported that managed money liquidated 3,529 contracts of their long positions and also liquidated 3,815 of their short positions.

In summary, during the two most recent to COT reporting periods, managed money has liquidated 3,360 contracts of long positions and also liquidated 13,921 contracts of their short positions. This sums up the degree of enthusiasm for the long side of soybeans by managed money

If prices are to move higher, there will have to be a major weather event, and participation by managed money is likely to be  characterized by more short covering and muted new buying. There is a deflationary mindset throughout the entire commodity complex and the reduced participation by managed money in the current COT report compared to June 10, 2014 highlights this.

Additionally, precious metals are making new multi-year lows and of course the bearish story in crude oil has been in the headlines for many months. Also, it appears that China may be headed for a hard economic landing with ripple effects across Chinese consumers. In other words, there is little to compel professional money managers to enter into substantial long positions in commodities.

From the July 12 Weekend Wrap:

“It is likely the COT report of next week will show an increase in the net long position of managed money. And if this is the case, a lopsided net long position will be held by managed money. For prices to continue to advance more new longs must be willing to make commitments at ever higher prices because the number of short sellers covering positions are diminishing. We do not think this is in the cards unless a major weather scare occurs. As we pointed out before, soybeans tend to top in the June-July time frame. We think the party is about to end.”

Soybean meal:

For the week, August soybean meal advanced $5.50, new crop December +10 cents, January 2016 -70. The COT report revealed that managed money liquidated 2.250 of their long positions and also liquidated 8,186 of their short positions. Commercial interests added 976 contracts to their long positions and also added 14,947 contracts to their short positions. As of the latest report, managed money is long soybean meal by a ratio of 2.62:1, which is an increase from the previous week of 2.16:1 and a dramatic jump from the ratio two weeks ago 1.87:1.

Note the increase in this week’s ratio was due to the liquidation of short positions, not the addition of new long positions, and in fact managed money was liquidating their longs. In short, managed money will not pay ever higher prices for soybean meal.

Soybean oil:

For the week, August soybean oil lost 64 points, new crop December -69, January 2016 -65. The COT report revealed that managed money added 1,117 to their long positions and liquidated 7,908 of their short positions. Commercial interests added 3,349 to their long positions and also added 11,295 to their short positions. As of the latest report, managed money is long soybean oil by a ratio of 1.76:1, which is an increase from the previous week of 1.43:1, but about the same as the ratio two weeks ago of 1.77:1.

Corn:

For the week, September corn lost 14.50 cents, new crop December -13.75, March 2016 -13.25. The COT report revealed that managed money liquidated 3,893 of their long positions also liquidated 30,296 of their short positions. Commercial interests added 14,676 to their long positions also added 67,131 contracts to their short positions. As of the latest report, managed money is long corn by a ratio of 2.93:1, which is up substantially from the previous week of 2.23:1 and approximately 150% above the ratio two weeks ago of 1.19:1.

Like soybeans and soybean meal, the reason for the increase in this week’s ratio for corn was due solely to the liquidation of short positions, not the addition of new long positions. In last weekend’s report we noted the same phenomenon and as a consequence have solid proof that managed money has been unwilling to initiate new long positions to support ever higher corn prices (see extract below).

The current ratio of 2.93:1 is the highest since January 20, 2015 when managed money was long corn by a ratio of 2.98:1.The trading range encompassed by the nearby March 2015 contract during the January 20 reporting period of the report was 3.76-3.91, or below the trading range encompassed by the July 14, 2015 report of 4.18 1/2 – 4.43 1/4.

The participation by managed money in the January 20 report showed a net long position of 185,148 contracts versus the net long of 175,295 contracts held by managed money in the July 14 report. In short, managed money is less bullish in the current report than the January 20 report when prices were lower.

Like soybeans, commercial participation is considerably greater in the current report with commercial interests holding a net short position of 398,959 contracts, or a short ratio of 2.49:1 versus the January 20 net short position of 308,984 contracts or a short ratio of 2.00:1. 

Although the net long position held by managed money is reasonable based upon its past history relative to price levels, the fact is the bulky net long position will exert selling pressure if prices are unable to rally substantially.This will be exacerbated if prices accelerate on the downside and there is a dearth of short covering to lift prices as they decline.

The fact is during the past two COT reporting periods managed money has added only 9,423 contracts to their long positions while they have liquidated 125,542 contracts of their short positions. This sums up the level of enthusiasm for the long side of corn by managed money.

From the July 12 Weekend Wrap:

“Again, note that the bulk of the increase in this week’s ratio was the result of managed money liquidating a massive short position, rather than the addition of long positions. In last week’s COT report, managed money added 44,411 contracts to their long positions and liquidated a massive 118,887 of their short positions.”

“In summary, the liquidation of short positions has been the prime impetus in the shift from net short to net long. Also, note that the number of new longs added in the current report is substantially less than the previous week’s report, indicating a slowdown in the number of new longs willing to pay ever higher prices.”

Chicago wheat:

For the week, September Chicago wheat lost 22.00 cents, new crop of December -20.00, March 2016 -19.00. The COT report revealed that managed money added 791 contracts to their long positions and also added 4,281 to their short positions. Commercial interests added 5,793 to their long positions and also added 3,781 to their short positions. As of the latest report, managed money is long Chicago wheat by a ratio of 1.49:1, which is a decline from the previous week of 1.60:1, but an increase from the ratio two weeks ago of 1.21:1.

The addition of 3,781 contracts to short positions held by managed money in the current report is the first such increase since the June 23 report when managed money added 1,404 contracts to short positions, which indicates that they are beginning to get bearish on Chicago wheat again. As we pointed out in Friday’s report, the September contract is likely to generate a short-term sell signal any day.

Kansas City wheat:

For the week, September Kansas City wheat lost 25.75 cents, new crop December -26.25, March 2016 -26.00. The COT report revealed that managed money liquidated 791 contracts of their long positions and also liquidated 1,433 of their short positions. Commercial interests added 1,781 to their long positions and also added 6,824 to their short positions. As of the latest report, managed money is long Kansas City wheat by a ratio of 1.24:1, which is up slightly from the previous week of 1.21:1 and the ratio two weeks ago of 1.06:1.

Thus far in the third quarter, August soybean meal is the out performer with a gain of 0.45%, September corn -0.41%, August soybeans -3.31%, August soybean oil -5.30%, September Chicago wheat -10.03%, Kansas City wheat -10.45%.

Year to date, September corn is the out performer with a gain of 1.20%, August soybean oil -0.59%, August soybean meal -0.96%, August soybeans -2.00%, September Chicago wheat -8.39%, September Kansas City wheat -15.40%.

Cotton:

For the week, December cotton lost 30 points, March 2016 -57, May 2016-68. The COT report revealed that managed money liquidated 2,570 of their long positions and added 1,015 to their short positions. Commercial interests added 371 contracts to their long positions and also added 279 to their short positions. As of the latest report, managed money is long cotton by a ratio of 4.12:1, which is down from the previous week of 4.55:1, but up substantially in the ratio two weeks ago up 3.37:1.

Sugar #11: On July 13, October sugar generated a short-term buy signal, but remains on intermediate term sell signal.

For the week, October sugar lost 45 points, March 2016 -30, May -24. The COT report revealed that managed money added 8,283 to their long positions and liquidated 27,732 contracts of their short positions. Commercial interests liquidated 2,127 contracts of their long positions and added 37,842 to their short positions. As of the latest report, managed money is short sugar by a ratio of 1.003:1, which is down substantially from the previous week of 1.27:1 and the ratio two weeks ago of 1.52:1.

Coffee:

For the week, September coffee advanced 2.15, December +2.20, March 2016 +2.20. The COT report revealed that managed money added 1,503 to their long positions and liquidated 2,789 of their short positions. Commercial interests liquidated 1,129 of their long positions and added 677 to their short positions. As of the latest report, managed money is short coffee by a ratio of 1.60:1, which is down from the previous week of 1.78:1, but up from the ratio two weeks ago of 1.39:1.

Cocoa:

For the week, September cocoa advanced $43.00, December +49.00, March 2016 +51.00. The COT report revealed that managed money added 2,591 to their long positions and also added 2,376 to their short positions. Commercial interests liquidated 932 contracts of their long positions and also liquidated 4,919 of their short positions. As of the latest report, managed money is long cocoa by a ratio of 3.15:1, which is down from the previous week of 3.38:1 and about the same as the ratio two weeks ago of 3.14:1.

During the past week September, December 2015, and March 2016 cocoa made new contract highs of $3,386, 3,375 and 3,368 respectively.

Live cattle: On July 13, August live cattle generated an intermediate term sell signal after generating a short-term sell signal on June 26.

For the week, August live cattle lost 82 points, October -1.30 cents, December -70. The COT report revealed that managed money liquidated a massive 17,662 contracts of their long positions and added 2,860 to their short positions. Commercial interests added 3,762 to their long positions and liquidated 9,719 of their short positions. As of the latest report, managed money is long live cattle by a ratio of 3.99:1, which is down dramatically from the previous week of 5.90:1 and the ratio two weeks ago of 6.11:1.

Lean hogs:

For the week, August lean hogs advanced 2.02 cents, October +1.00, December +1.57. The COT report revealed that managed money added 994 contracts to their long positions and liquidated 3,905 of their short positions. Commercial interests added 1,599 contracts to their long positions and also added 133 to their short positions. As of the latest report, managed money is long lean hogs by a ratio of 1.25:1, which is up from the previous week of 1.13:1 and the ratio two weeks ago of 1.19:1.

WTI crude oil:

For the week, August of WTI crude oil lost $1.85,  September -2.01, October -2.03. The COT report revealed that managed money liquidated 21,348 contracts of their long positions and added 12,333 to their short positions. Commercial interests added 9,373 to their long positions and also added 6,981 to their short positions. As of the latest report, managed money is long WTI crude oil by a ratio of 2.33:1, which is down from the previous week of 2.84:1 and is almost half the ratio two weeks ago of 4.36:1.

Heating oil:

For the week, August heating oil lost 7.58 cents, September -7.74, October -7.50. The COT report revealed that managed money added 26 contracts to their long positions and also added 1,482 to their short positions. Commercial interests liquidated 2,887 of their long positions and added 1,729 to their short positions. As of the latest report, managed money is short heating oil by a ratio of 1.70:1, which is an increase from the previous week of 1.64:1 and a substantial advance from the ratio two weeks ago of 1.16:1.

Gasoline:

For the week, August gasoline lost 8.79 cents, September -5.23, October -4.84. The COT report revealed that managed money added 1,718 to their long positions and liquidated 2,945 of their short positions. Commercial interests liquidated 735 contracts of their long positions and added 641 to their short positions. As of the latest report, managed money is long gasoline by a ratio of 1.26:1, which is an increase from the previous week of 1.15:1, but down from the ratio two weeks ago of 1.36:1.

Natural gas:

For the week, August natural gas advanced 10.00 cents, September +9.4, October +8.8. The COT report revealed that managed money liquidated 1,120 of their long positions and also liquidated 29,430 of their short positions. Commercial interests liquidated 8,614 of their long positions and also liquidated 18,071 of their short positions.As of the latest report, managed money is short natural gas by a ratio of 1.58:1, which is down from the previous week of 1.71:1 and the ratio two weeks ago of 1.63:1.

Copper:

For the week, September copper lost 4.15 cents. The COT report revealed that managed money liquidated 1,391 of their long positions and also liquidated 5,056 of their short positions. Commercial interests liquidated 1,733 of their long positions and added 1,961 to their short positions. As of the latest report, managed money is short copper by a ratio of 1.65:1, which is down from the previous week of 1.73:1, but up slightly from the ratio two weeks ago of 1.60:1.

Palladium:

For the week, September palladium lost $31.35. The COT report revealed that managed money liquidated 818 contracts of their long positions and added 54 to their short positions. Commercial interests added 228 contracts to their long positions and liquidated 43 of their short positions. As of the latest report, managed money is long palladium by a ratio of 1.69:1, which is down from the previous week of 1.77:1 and the ratio two weeks ago of 1.88:1.

During the past week, September palladium made a new contract low of $613.70. This is the lowest print since $596.05 made during the month of November 2012.

Platinum:

For the week, October platinum lost $31.00. The COT report revealed that managed money liquidated 383 contracts of their long positions and added 1,833 to their short positions. Commercial interests added 514 contracts to their long positions and also added 610 to their short positions. As of the latest report, managed money is long platinum by a ratio of 1.25:1, which is down from the previous week of 1.35:1 and the ratio two weeks ago of 1.34:1.

During the past week, October platinum made a new contract low of $993.00. This is the lowest print since $956.70 made during the month of February 2009.

Gold:

For the week, August gold lost $26.00. The COT report revealed that managed money liquidated 3,069 of their long positions and added 153 to their short positions. Commercial interests added 3,527 to their long positions and also added 2,159 to their short positions. As of the latest report, managed money is short gold by a ratio of 1.01:1, which is a complete reversal from the previous week when they were long by a ratio of 1.02:1. Two weeks ago, managed money was long gold by a ratio of 1.16:1.

During the past week, August gold made a new contract low of $1129.60. This is the lowest print since $1111.30 made during the month of April 2010.

Silver:

For the week, September silver lost 64.7 cents. The COT report revealed that managed money liquidated 1,558 of their long positions and also liquidated 1,508 of their short positions. Commercial interests liquidated 1,195 of their long positions and added 759 contracts to their short positions. As of the latest report, managed money is short silver by a ratio of 1.21:1, which is down from the previous week of 1.28:1 and the ratio two weeks ago of 1.24:1.

Canadian dollar:

For the week, the September Canadian dollar lost 1.77 cents. The COT report revealed that leverage funds added 1,250 to their long positions and also added 7,149 to their short positions. As of the latest report, leverage funds are short the Canadian dollar by a ratio of 2.21:1, which is up from the previous week of 2.15:1, but down from the ratio two weeks ago of 2.26:1.

Australian dollar:

For the week, the September Australian dollar lost 56 pips. The COT report revealed that leverage funds liquidated 1,484 of their long positions and added 8,325 to their short positions. As of the latest report, leverage funds are short the Australian dollar by a ratio of 4.45:1, which is up from the previous week of 3.27:1 and the ratio two weeks ago of 2.50:1.

Swiss Franc:

For the week, the September Swiss franc lost 2.18 cents. The COT report revealed that leverage funds liquidated 2,711 of their long positions and added 313 to their short positions. As of the latest report, leverage funds are long the Swiss franc by a ratio of 1.56:1, which is down in the previous week of 3.12:1 and the ratio two weeks ago of 3.16:1.

British Pound:

For the week, the September British pound advanced 1.09 cents. The COT report revealed that leverage funds liquidated 7,165 contracts of their long positions also liquidated 7,712 of their short positions. As of the latest report, leverage funds are long the British pound by a ratio of 2.64:1, which is up from 2.14:1 and the ratio two weeks ago of 1.61:1.

Euro: On July 16, the September euro generated an intermediate term sell signal after generating a short-term sell signal on July 6.

For the week, the September euro lost 2.81 cents. The COT report revealed that leverage funds liquidated 3,278 of their long positions and added 3,471 to their short positions. As of the latest report, leverage funds are short the euro by a ratio of 2.97:1, which is up from the previous week of 2.74:1 and the ratio two weeks ago of 2.16:1.

Yen: On July 16, the September yen generated a short-term sell signal, which reversed the short-term buy signal of July 6. The September yen remains on intermediate-term sell signal.

For the week, the September yen lost 84 pips. The COT report revealed that leverage funds added 733 contracts to their long positions and liquidated 27,143 of their short positions. As of the latest report, leverage funds are short the yen by a ratio of 3.50:1, which is down from the previous week of 4.70:1 and the ratio two weeks ago of 5.7:1.

Dollar index: On July 16, the cash dollar index generated an intermediate term buy signal after the September futures contract generated a short term buy signal on July 7.

For the week, the September dollar index advanced 1.81 points. The COT report revealed that leverage funds added 554 contracts to their long positions and liquidated 2,718 of their short positions. As of the latest report, leverage funds are long the dollar index by a ratio of 1.15:1, which is a complete reversal from the previous week when they were short by a ratio of 1.10:1, and the ratio two weeks ago of 1.45:1.

S&P 500 (250 x):

For the week, the S&P 500 futures contract gained 49.80 points. The COT report revealed that leverage funds added 1,146 contracts to their long positions and liquidated 1,049 of their short positions. As of the latest report, leverage funds are short the S&P 500 futures contract by a ratio of 1.22:1, which is down from the previous week of 1.49:1 and the ratio two weeks ago of 2.91:1.

S&P 500 E mini: On July 15, the September S&P 500 E mini generated an intermediate term buy signal and a short term buy signal on July 16.

10 Year Treasury Note:

For the week , the September 10 year treasury note advanced 12.6 points. The COT report revealed that leverage funds liquidated 18,827 contracts of their long positions and also liquidated 29,204 of their short positions. As of the latest report, leverage funds are short the 10 year treasury note by a ratio of 1.90:1, which is up from the previous week of 1.80:1 and the ratio two weeks ago of 1.71:1.