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The time frame for the current Commitments of Traders report is from Wednesday, May 13 through Tuesday, May 19.

Soybeans:

For the week, July soybeans lost 29.00, August -30.25, new crop November -27.50. The COT report revealed that managed money liquidated 13,959 contracts of their long positions and added 23,157 to their short positions. Commercial interests added 7,980 to their long positions and liquidated 29,258 of their short positions. As of the latest report, managed money is short soybeans by ratio of 2.14:1, which is up substantially from the previous week of 1.48:1 and the ratio of two weeks ago of 1.19:1.

The current short ratio of 2.14:1 is the highest recorded during the course of the bear market, which began in 2014. During the past week, July, August and new crop November contracts made new contract lows of 9.22 3/4, 9.15 and 9.06 respectively.

Soybean meal:

For the week, July soybean meal advanced 90 cents, August – $1.30, new crop December -1.70. The COT report revealed that managed money liquidated 1,392 of their long positions and also liquidated 3,344 their short positions. Commercial interests added 2,124 to their long positions and also added 1,547 to their short positions. As of the latest report, managed money is short soybean meal by ratio of 1.15:1, which is down slightly from the previous week of 1.18:1, but above the ratio of two weeks ago of 1.002:1.

Soybean oil:

For the week, July soybean oil lost 1.43 cents, August -1.43, new crop December -1.43. The COT report revealed that managed money liquidated 7,767 of their long positions and added 5,334 to their short positions. Commercial interests liquidated 2,847 of their long positions and also liquidated 3,770 of their short positions. As of the latest report, managed money is long soybean oil by a ratio of 1.59:1, which is down from the previous week of 1.98:1 and the ratio two weeks ago of 1.80:1.

Corn:

For the week, July corn lost 5.50 cents, September -5.75, new crop December -5.00. The COT report revealed that managed money added 12,618 contracts to their long positions and also added 32,037 to their short positions. Commercial interests added 18,158 contracts to their long positions and also added 7,100 to their short positions. As of the latest report, managed money is short corn by ratio of 1.73:1, which is an increase from the previous week of 1.68:1 and matches the high short ratio recorded during the course of the bear market of 1.73:1.

Chicago wheat:

For the week, July Chicago wheat advanced 4.25 cents, September +5.50, new crop December +5.00. The COT report revealed that managed money added 11,907 to their long positions and liquidated 22,812 of their short positions. Commercial interests liquidated 2,161 of their long positions and added 10,141 contracts to their short positions. As of the latest report, managed money is short Chicago wheat by ratio of 2.17:1, which is down substantially from the previous week of 3.14:1 and the high short ratio recorded during the bear market, which began in 2014 of 3.28:1.

Kansas City wheat:

For the week, July Kansas City wheat advanced 4.75 cents, September +5.75, new crop December +5.75. The COT report revealed that managed money added 2,672 to their long positions and liquidated 6,358 of their short positions. Commercial interests liquidated 3,411 of their long positions and added 3,726 to their short positions. As of the latest report, managed money is short Kansas City wheat by a ratio of 1.03:1, which is down substantially from the previous week of 1.32:1 and the ratio of two weeks ago of 1.48:1.

Year to date, July soybean oil is the out performer with a loss of 2.80%, July soybean meal -10.35%, July soybeans -10.87%, July corn -12.73%, July Chicago wheat -13.77%, July Kansas City wheat -14.04%.

Thus far in the second quarter, July soybean oil is the out performer with a gain of 3.33%, July Chicago wheat +0.24%, July Kansas City wheat -3.06%, July soybeans -5.47%, July corn -6.31%, July soybean meal -6.46%.

Cotton: On May 20, July cotton generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, July cotton lost 3.54 cents, new crop December -2.44, March 2016 -2.01. The COT report revealed that managed money liquidated 4,640 of their long positions and added 2,162 to their short positions. Commercial interests liquidated 1,811 of their long positions and also liquidated 5,264 of their short positions. As of the latest report, managed money is long cotton by a ratio of 2.54:1, which is down from the previous week of 2.95:1 and dramatically below the ratio of two weeks ago of 3.44:1.

Sugar #11:

For the week, July sugar lost 58 points, October -54, March -48. The COT report revealed that managed money added 1,415 contracts to their long positions and also added 12,688 to their short positions. Commercial interests added 14,472 contracts to their long positions and liquidated 2,881 of their short positions. As of the latest report, managed money is short sugar by a ratio of 1.20:1, which is an increase from the previous week’s ratio of 1.12:1 (the lowest short ratio since February 17, 2015 of 1.05:1), but below the ratio of two weeks ago 1.33:1.

Coffee:

For the week, July coffee lost 11.30, September -10.85, December -10.50. The COT report revealed that managed money liquidated 881 contracts of their long positions and also liquidated 6,982 of their short positions. Commercial interests liquidated 4,118 of their long positions and added 3,472 to their short positions. As of the latest report, managed money is short coffee by ratio of 1.15:1, which is a decline from the previous week’s high short ratio of 1.33:1, and below ratio the ratio of two weeks ago of 1.24:1.

On May 1, July coffee generated a short-term sell signal and has been on an intermediate-term sell signal for several months. We wanted to point out that in bear markets, the worst part of the decline can actually occur when prices are trading at relatively low levels. During the past week, July coffee declined over 11 cents, which represents a loss for the week of over 8%, a huge drop for a commodity whose price was already trading at multi-month lows.

This is a cautionary tale for grain traders who may think prices cannot undergo large declines because they are trading at major lows. In our September 2, 2014 report, we provided the research that showed the two major stock market crashes of the 20th century occurred when prices were trading at relatively low levels compared to the all time highs that occurred several weeks before.

From the September 2, 2014 report: “Why Its Time For Defense”

“There are a number of similarities between 1929 in 1987. First, it should be noted that exceptionally large market crashes do not come out of the blue. Both 1929 in 1987 markets showed ongoing weakness prior to the crash. Second, before the crashes occurred, one market was already in a bear market(1929), the other close to it. Third, the crashes of 1929 and 1987 occurred approximately 5 1/2 weeks after the all time high close. Fourth, there was a major period of weakness (-15.45% in 1929 and -15.83% in 1987) that occurred over several days before the crash.”

Cocoa:

For the week, July cocoa advanced $20.00, September +18.00, December +15.00. The COT report revealed that managed money had an 11,032 to their long positions and also added 1842 to their short positions. Commercial interest liquidated 1431 of their long positions and added 8038 to their short positions. As of the latest report, managed money is long cocoa by a ratio of 2.69:1, which is above the previous week of 2.41:1 and up substantially from the ratio two weeks ago of 2.00:1.

Year to date, July cocoa is the out performer with a gain of 9.14%, July cotton +2.10%, July sugar -19.28%, July coffee -26.15%.

Thus far in the second quarter, July cocoa is the out performer with a gain of 16.82%, July sugar +2.07%, July cotton -0.25%, July coffee -6.72%.

Live cattle:

For the week, June live cattle lost 40 points, August -10, October +93. The COT report revealed that managed money added 6,363 contracts to their long positions and liquidated 886 of their short positions. Commercial interests liquidated 584 contracts of their long positions and added 4,917 to their short positions. As of the latest report, managed money is long live cattle by a ratio of 9.82:1, which is up substantially from the previous week of 8.49:1 and the ratio of two weeks ago of 7.10:1.

The current ratio of 9.82:1 is the highest recorded since January 27, 2015 when managed money was long live cattle by a ratio of 9.73:1.

Lean hogs:

For the week, June lean hogs advanced 37 points, August -30, October +52. The COT report revealed that managed money added 230 contracts to their long positions and liquidated 1,672 of their short positions. Commercial interests added 380 contracts to their long positions and also added 4,415 to their short positions. As of the latest report, managed money is long lean hogs by a ratio of 1.90:1, which is up from the previous week of 1.79:1 and the ratio of two weeks ago of 1.53:1.

Year to date, August live cattle is the out performer with a loss of 1.20%, June live cattle -2.22%, August lean hogs -7.15%, June lean hogs -8.55%.

Thus far in the second quarter, June lean hogs is the out performer with a gain of 10.09%, August lean hogs +7.62%, August live cattle +0.58%, June live cattle -0.29%.

WTI crude oil: On May 20, July WTI crude oil generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, July WTI crude oil lost 82 cents, August -86, September -93. The COT report revealed that managed money liquidated 6,924 of their long positions and added 5,535 to their short positions. Commercial interests liquidated 33,699 contracts of their long positions and also liquidated 30,156 of their short positions. As of the latest report, managed money is long WTI crude oil by a ratio of 4.67:1, which is down from the previous week’s ratio of 5.19:1 (the high ratio recorded during the recent advance) and slightly above the ratio two weeks ago 4.58:1.

As we pointed out in last weekend’s report, we did not see the compelling reason for prices to move substantially higher, and during the past week we were proved correct. On May 21 one day after the generation of the sell signal on May 20, WTI had its typical counter trend rally and closed 1.74 higher on the day. However, this was reversed on May 22 with the July contract closing $1.00 lower. Clients should be looking to establish bearish positions on rallies. OIA especially likes writing out of the money calls.

From the May 17 Weekend Wrap: 

“Last week, we wrote about our reasons for thinking that WTI prices would stall at current levels. The fact is for prices to move considerably higher from here new buyers must be willing to pay ever increasing prices, and based upon recent history, we think this is highly unlikely. Market participants are well aware of burdensome stocks, and this should temper any major new buying.”

Brent crude oil: On May 20, July Brent crude oil generated a short-term sell signal, but remains on an intermediate term buy signal.

Heating oil:

For the week, June heating oil lost 5.23 cents, July -5.05, August -4.78. The COT report revealed that managed money liquidated 1,785 of their long positions and also liquidated 5,732 of their short positions. Commercial interests liquidated 6,983 of their long positions and added 1,453 contracts to their short positions. As of the latest report, managed money is short heating oil by a ratio of 1.13:1, which is down from the previous week of 1.23:1 and the ratio of two weeks ago of 1.24:1.

Gasoline:

For the week, June gasoline lost 29 points, July -66, August -1.06 cents. The COT report revealed that managed money added 347 contracts to their long positions and also added 543 to their short positions. Commercial interests liquidated 696 of their long positions and also liquidated 2,190 of their short positions. As of the latest report, managed money is long gasoline by a ratio of 1.61:1, which is down fractionally from the previous week of 1.63:1 and the ratio two weeks ago of 1.68:1.

Natural gas:

For the week, June natural gas lost 12.9 cents, July -15.1, August -15.6. The COT report revealed that managed money added 6,975 contracts to their long positions and liquidated 10,541 of their short positions. Commercial interests liquidated 3,506 of their long positions and added 2,445 to their short positions. As of the latest report, managed money is short natural gas by a ratio of 1.36:1, which is down from the previous week of 1.45:1 and the ratio two weeks ago of 1.56:1.

Year to date, July gasoline is the out performer with the gain of 19.05%, July Brent crude oil +13.94%, July WTI crude oil +11.31%, July heating oil +7.00%, July natural gas -0.60%, July ethanol -3.20%.

Thus far in the second quarter, July WTI crude oil is the out performer with the gain of 25.90%, July Brent crude oil +18.70%, July gasoline +18.51%, July heating oil +13.25%, July natural gas +8.83%, July ethanol +5.92%.

Copper: For July copper to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for May 22 of 2.8373. This number will change slightly on Monday, but it gives clients an idea how close copper is to a sell signal. The July contract closed at 2.8110 on May 22. 

For the week, July copper lost 11.35 cents. The COT report revealed that managed money added 646 contracts to their long positions and also added 2,097 to their short positions. Commercial interests liquidated 486 contracts of their long positions and added 2,338 to their short positions. As of the latest report, managed money is long copper by a ratio of 2.88:1, which is down from the previous week of 3.17:1 (the high ratio  thus far in 2015), but up from the ratio of two weeks ago of 2.77:1.

Last week, we wrote about copper and the lopsided long position held by managed money (see extract below), which was nearly as large as the position held in the July 22, 2014 COT report when copper prices traded substantially higher. It appears to be a certainty that July copper will generate a short-term sell signal early next week.

From the May 17 Weekend Wrap:

“We would not be involved in copper. There are better trades on the board, especially gold and silver who have substantially lower ratios of managed money longs. Additionally, when looking at the performance of copper year to date and during the second quarter, it does not merit its current large net long position, and certainly doesn’t when comparing the current lopsided number of longs to previous periods when copper prices were trading at higher levels. July copper remains on a short and intermediate term buy signal.”

Palladium:

For the week, September palladium lost $10.80. The COT report revealed that managed money liquidated 40 contracts of their long positions and added 491 to their short positions. Commercial interests liquidated 595 contracts of their long positions and also liquidated 767 of their short positions. As of the latest report, managed money is long palladium by a ratio of 5.80:1, which is below the previous week of 6.88:1 and down substantially from the ratio of two weeks ago of 7.96:1.

Platinum:

For the week, July platinum lost $20.50. The COT report revealed that managed money added 1,018 contracts to their long positions and liquidated 3,939 of their short positions. Commercial interests liquidated 116 contracts of their long positions and added 2,231 to their short positions. As of the latest report, managed money is long platinum by a ratio of 2.24:1, which is up from the previous week of 1.74:1 and the ratio of two weeks ago of 1.83:1.

Gold: On May 18, August gold generated an intermediate term buy signal after generating a short-term buy signal on May 14.

For the week, August gold lost $21.40. The COT report revealed that managed money added 28,099 contracts to their long positions and liquidated 22,799 of their short positions. Commercial interests liquidated 2740 of their long positions and added 30,846 to their short positions. As of the latest report, managed money is long gold by a ratio of 2.46:1, which is a massive jump from the previous week of 1.36:1 and almost double the ratio two weeks ago of 1.30:1.

Silver:

For the week, July silver lost 51.2 cents. The COT report revealed that managed money added 8,554 to their long positions and liquidated 19,680 of their short positions. Commercial interests liquidated 1,206 of their long positions and added 9,875 to their short positions. As of the latest report, managed money is long silver by a ratio of 4.60:1, which is a threefold increase from the previous week of 1.47:1 and the ratio of two weeks ago of 1.36:1.

Year to date, July silver is the out performer with a gain of 9.80%, August gold +1.69%, July copper -1.04%, September palladium -2.00%, July platinum -4.40%.

Thus far in the second quarter, September palladium is the out performer with a gain of 6.41%, July silver +3.07%, July copper +1.99%, August gold +1.84%, July platinum +1.19%.

Canadian dollar:

For the week, the June Canadian dollar lost 1.98 cents. The COT report revealed that leverage funds liquidated 2,409 of their long positions and also liquidated 13,053 of their short positions. As of the latest report, leverage funds are short the Canadian dollar by a ratio of 1.03:1, which is a substantial drop from the previous week of 1.65:1 and nearly half the ratio of two weeks ago of 2.04:1.

Australian dollar:

For the week, the June Australian dollar lost 2.15 cents. The COT report revealed that leverage funds added 4,717 to their long positions and liquidated 3,040 of their short positions. As of the latest report, leverage funds are short the Australian dollar by a ratio of 1.39:1, which is a substantial drop from the previous week of 1.97:1 and the ratio of two weeks ago of 2.05:1.

Swiss Franc:

For the week, the June Swiss franc lost 3.37 cents. The COT report revealed that leverage funds liquidated 2,617 of their long positions and also liquidated 1,530 of their short positions. As of the latest report, leverage funds are long the Swiss franc by a ratio of 2.58:1, which is an increase from the previous week of 2.29:1 and approximately 150% greater than the ratio of two weeks ago of 1.03:1.

British Pound:

For the week, the June British pound lost 2.64 cents. The COT report revealed that leverage funds added 15,036 contracts to their long positions and liquidated 4,375 of their short positions. As of the latest report, leverage funds are long the British pound by a ratio of 1.78:1, which is a large jump from the previous week of 1.16:1 and the ratio of two weeks ago of 1.10:1.

Euro:

For the week, the June euro lost 4.26 cents. The COT report revealed that leverage funds liquidated 6,025 of their long positions and also liquidated 10,294 of their short positions. As of the latest report, leverage funds are short the euro by a ratio of 4.89:1, which is an increase from the previous week of 4.30:1 and the ratio of two weeks ago of 4.32:1.

Yen:

For the week, the June yen lost 154 pips. The COT report revealed that leverage funds added 22,901 contracts to their long positions and also added 23,974 to their short positions. As of the latest report, leverage funds are short the yen by a ratio of 2.15:1, which is a substantial drop from the previous week of 3.41:1 and the ratio of two weeks ago of 3.09:1.

Dollar index:

For the week, the June dollar index advanced 2.93 points. The COT report revealed that leverage funds added 668 contracts to their long positions and liquidated 2,461 of their short positions. As of the latest report, leverage funds are long the dollar index by a ratio of 1.44:1, which is an increase from the previous week of 1.17:1, and a complete reversal from two weeks ago when leverage funds were short the dollar index by ratio of 1.13:1.

Last week, we wrote about the position of leverage funds and that they had the characteristics of commercial traders. It appears they are quite adept at picking tops and bottoms and they moved from a net short to a net long position at exactly the right time. The dollar index is getting close to generating a short term buy signal. 

From the May 17 Weekend Wrap:

“The positioning of leveraged funds in the dollar index has all the characteristics of commercial traders: They were massively short at the top of the market and now are increasing their long exposure at the bottom end of the trading range.”

Year to date, the June dollar index is the out performer with a gain of 6.53%, June Swiss franc +5.15%, June British pound -0.55%, June Yen -1.52%, June Australian dollar -3.73%, June Canadian dollar -5.26%, June euro -9.09%.

Thus far in the second quarter, the June British pound is the out performer with a gain of 4.37%, June Australian dollar +3.14%, June Canadian dollar +3.11%, June Swiss franc +2.91%, June euro +2.45%, June yen -1.27%, June dollar index -2.27%.

S&P 500 (250 x):

For the week, the June S&P 500 futures contract advanced 5.70 points. The COT report revealed that leverage funds added 4,102 contracts to their long positions and also added 641 contracts to their short positions. As of the latest report, leverage funds are long the S&P 500 futures contract by ratio of 1.36:1, which is a complete reversal from the previous week when they were short by 1.18:1 and the ratio of two weeks ago of 1.08:1.

Year to date, the NASDAQ 100 cash index is the out performer with a gain of 6.87%, S&P 400 cash index +6.14%, Russell 2000 cash index + 3.95%, New York Composite cash index +3.31%, S&P 500 cash index +3.26%, Dow Jones Industrial Average cash index +2.29%.

Thus far in the second quarter, the NASDAQ 100 cash index is the out performer with a gain of 4.46%, S&P 500 cash index +2.81%, New York Composite cash index +2.74%, Dow Jones Industrial Average cash index +2.56%, S&P 400 cash index +1.15%, Russell 2000 cash index -0.04%.

10 Year Treasury Note:

For the week, the June 10 year treasury note lost 24 points. The COT report revealed that leverage funds added 13,779 contracts to their long positions and also added 63,988 to their short positions. As of the latest report, leverage funds are short the 10 year note by a ratio of 1.62:1, which is an increase on the previous week of 1.52:1, but down from the ratio of two weeks ago 1.95:1.