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The time frame for the current Commitments of Traders report is from Wednesday, September 23 through Tuesday, September 29.

Soybeans:

For the week, November soybeans lost 15.00 cents, March -15.50, May -13.25. The COT report revealed that managed money liquidated 3,333 of their long positions and also liquidated 13,570 of their short positions. Commercial interests added 853 contracts to their long positions and also added 24,092 to their short positions. As of the latest report, managed money is short soybeans by a ratio of 1.25:1, which is down from the previous week of 1.38:1, but up from the ratio two weeks ago of 1.17:1.

Note: manage money was liquidating long positions and the only reason the short ratio went down was greater liquidation of short positions. Commercials barely added to their long positions and added substantially to their short positions. In summary, there appears to be little appetite for the long side of soybeans.

Soybean meal:

For the week, December soybean meal lost $7.00, March -6.60, May -6.10. The COT report revealed that managed money liquidated 866 of their long positions and also liquidated 848 of their short positions. Commercial interests liquidated 3,379 of their long positions and also liquidated 9,618 of their short positions. As of the latest report, managed money is long soybean meal by a ratio of 1.60:1, which is up fractionally from the previous week of 1.59:1, but down substantially from the ratio two weeks ago of 2.25:1.

Soybean oil:

For the week, December soybean oil gained 15 points, March +11, May +13. The COT report revealed that managed money liquidated 4,758 of their long positions and also liquidated 18,352 of their short positions. Commercial interest liquidated 11,514 of their long positions and added 5775 to their short positions. As of the latest report, managed money is short soybean oil by ratio of 1.08:1, which is down from the previous week of 1.27:1 and the ratio two weeks ago of 1.25:1.

Soybean oil is getting close to generating a short-term buy signal. OIA’s key pivot point for October 2 was 27.51, (December close of 28.06 on October 2) although this is likely to change somewhat on October 4. The impetus for the advance is the sharp rise in palm oil prices, which reached a 14 month high last week. Preliminary stats for trading on October 2 show that total open interest rose on the 74 point gain in the December contract. We will provide coverage of October 2’s action in the Monday report.

Corn:

For the week, December corn advanced 0.25 cents, March -0.75, May -1.50. The COT report revealed that managed money liquidated 3,507 of their long positions and added 4,335 to their short positions. Commercial interests added 8,710 to their long positions and also added 23,808 to their short positions. As of the latest report, managed money is long corn by a ratio of 1.36:1, which is down from the previous week of 1.42:1 and the ratio two weeks ago of 1.43:1.

The COT stats show there is little appetite for corn by managed money or commercial interests.

Chicago wheat: On October 1, December Chicago wheat generated a short-term buy signal, but remains on an intermediate term sell signal.

For the week, December Chicago wheat advanced 5.50 cents, March +4.00, May +3.75. The COT report revealed that managed money liquidated 2,104 their long positions and also liquidated 11,299 of their short positions. Commercial interests liquidated 3,596 of their long positions and added 5,074 to their short positions. As of the latest report, managed money is short Chicago wheat by a ratio of 1.42:1, which is down from the previous week of 1.56:1 and the ratio two weeks ago of 1.67:1.

Similar to corn and soybeans, the COT stats show that managed money and commercial interests have little appetite for the long side of Chicago wheat.

Kansas City wheat:

For the week, December Kansas City wheat advanced 0.25 cents, March unchanged, May unchanged. The COT report revealed that managed money liquidated 1,462 of their long positions and also liquidated 2,691 of their short positions. Commercial interests liquidated 13 contracts of their long positions and added 4,735 to their short positions. As of the latest report, managed money is short Kansas City wheat by a ratio of 1.19:1, which is down from the previous week of 1.22:1, but up from the ratio two weeks ago of 1.18:1.

Cotton:

For the week, December cotton lost 50 points, March -38, May -26. The COT report revealed that managed money added 1,398 to their long positions and also added 601 to their short positions. Commercial interests added 1,607 to their long positions and liquidated 21 contracts of their short positions. As of the latest report, managed money is long cotton by a ratio of 1.56:1, which is up a fraction from the previous week of 1.55:1, but down substantially and the ratio two weeks ago of 2.67:1.

During the past week, December and May 2016 cotton recorded new contract lows of 59.78 and 60.11 respectively.

From the September 20 Weekend Wrap on cotton:

“OIA cannot remember a time when a commodity or currency has been at contract lows accompanied by a heavy net long position as currently exists in cotton. This informs OIA that cotton will make another leg down and that managed money will provide some of the fuel for the downtrend. The next downside target is 57.05, the low made during the week of January 19, 2015 for the March 2015 contract.”

Sugar #11: On September 28, March 2016 sugar generated a short-term buy signal and an intermediate term buy signal on October 1.

For the week, March sugar advanced 1.12 cents, May +1.02, July +96 points. The COT report revealed that managed money added 6,210 to their long positions and liquidated 32,761 of their short positions. Commercial interests liquidated 18,631 contracts of their long positions and added 27,438 to their short positions. As of the latest report, managed money is long sugar by a ratio of 1.20:1, which is a complete reversal from the previous week when they were short by ratio of 1.12:1. Two weeks ago, managed money was long by a ratio of 1.007:1.

Although, COT stats show there was buying by managed money, the dominant action that moved manage money from a net short to a net long position was the substantial liquidation of short positions, not major new buying.

However, it should be noted that the front month March is selling at a large premium to its cousins, May and July and on October 2 the March-May 2016 sugar spread closed at 20 point premium (March-July + 35 point premium), which takes out the previous high print made on May, 14, 2014 when the March contract closed at at a 12 point premium to May ( 21 point premium to July) when the March contract closed at 19.78.

The bull spread price action is positive, but the market is massively overbought and is likely to have a sharp correction in the days ahead. We continue to recommend a stand aside posture until the market has corrected. Also, with more short-sellers getting blown out of the market, new buying will be far more important because the impact short covering will diminish as short sellers leave the market.

Coffee:

For the week, December coffee advanced 1.60 cents, March +1.45, May +1.55. The COT report revealed that managed money added 1,085 to their long positions and liquidated 2,729 of their short positions. Commercial interests added 992 to their long positions and also added 3,472 to their short positions. As of the latest report, managed money is short coffee by a ratio of 1.69:1, which is down from the previous week’s record high short ratio of 1.84:1 and the ratio two weeks ago of 1.82:1.

December coffee is getting close to generating a short term buy signal and we will provide coverage of Friday’s action in Monday’s report.

Cocoa: On October 1, December cocoa generated short and intermediate term sell signals.

For the week, December cocoa lost $181.00, March -174.00, May -171.00. The COT report revealed that managed money added 70 contracts to their long positions and liquidated 3,203 of their short positions. Commercial interests added 5,107 to their long positions and also added 3,558 to their short positions. As of the latest report, managed money is long cocoa by a ratio of 3.46:1, which is a substantial jump from the previous week of 2.84:1 and the ratio two weeks ago of 2.82:1.

Note: The substantial increase in this week’s ratio was due to the liquidation of short positions, not major new buying. The timing of short-seller liquidation could not have been worse. In summary, it appears that short-sellers liquidated near the top end of the trading range during the span of the COT report (September 23-September 29).

Live cattle:

For the week, October live cattle lost 10.63 cents, December -5.63, February -3.78. The COT report revealed that managed money liquidated 1,049 of their long positions and also liquidated 2,146 of their short positions. Commercial interests added 2,967 to their long positions and also added 3,837 to their short positions. As of the latest report, managed money remains long live cattle by a ratio of 1.12:1, which is up from the previous week of 1.09:1 and the ratio two weeks ago of 1.21:1.

Remarkably, managed money is still net long live cattle. We do not think the market will bottom until managed money assumes a substantial net short position.

Lean hogs:

For the week, October lean hogs advanced 1.48 cents, December -40 points, February -73. The. The COT report revealed that managed money added 2,024 to their long positions and liquidated 1,433 of their short positions. Commercial interests added 589 contracts to their long positions and also added 5,603 to their short positions. As of the latest report, managed money is long lean hogs by a ratio of 2.21:1, which is up from the previous week of 2.01:1 and the ratio two weeks ago of 1.76:1.

WTI crude oil:

For the week, November WTI crude oil lost 16 cents, December -19, January -16. The COT report revealed that managed money liquidated 6,267 of their long positions and added 7,184 to their short positions. Commercial interests added 11,055 to their long positions and also added 19,640 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 2.55:1, but up from the ratio two weeks ago of 2.25:1.

Heating oil:

For the week, November heating oil lost 2.57 cents, December -2.17, January -2.05. The COT report revealed that managed money liquidated 811 contracts of their long positions and added 3,123 to their short positions. Commercial interests liquidated 2,455 of their long positions and also liquidated 326 of their short positions. As of the latest report, managed money a short heating oil by a ratio of 2.45:1, which is up from the previous week of 2.21:1 and the ratio two weeks ago of 2.13:1.

The the current short ratio of 2.45:1 is the highest recorded during 2015.

Gasoline:

For the week, November gasoline lost 3.79 cents, December -3.42, January -3.17. The COT report revealed that managed money liquidated 898 contracts of their long positions and also liquidated 1,931 of their short positions. Commercial interests liquidated 7,094 of their long positions and also liquidated 10,226 of their short positions. As of the latest report, managed money is long gasoline by a ratio of 1.46:1, which is up slightly from the previous week of 1.41:1 and the same as the ratio two weeks ago of 1.46:1.

Natural gas:

For the week, November natural gas lost 18.00 cents, December -13.80, January -12.00. The COT report revealed that managed money liquidated 3,412 of their long positions and added 10,381 to their short positions. Commercial interests added 2,135 to their long positions and liquidated 2,295 of their short positions. As of the latest report, managed money a short natural gas by a ratio of 2.13:1, which is an increase from the previous week of 2.04:1 and a substantial jump from the ratio two weeks ago of 1.65:1.

The current ratio of 2.13:1 is the highest recorded during 2015.

During the past week, November, December and January natural gas recorded new contract lows of $2.403, 2.607, 2.745 respectively.

Copper:

For the week, December copper advanced 4.20 cents. The COT report revealed that managed money liquidated 1,313 of their long positions and added 2,472 to their short positions. Commercial interests added 1,377 to their long positions and liquidated 3,528 of their short positions. As of the latest report, managed money is short copper by ratio of 1.28:1, which is up from the previous week of 1.15:1 and a complete reversal from two weeks ago when managed money was long copper by a ratio of 1.03:1.

Palladium:

For the week, December palladium advanced $30.00. The COT report revealed that managed money did not add or liquidate long positions, but liquidated 2,488 of their short positions. Commercial interests liquidated 290 contracts of their long positions and added 2,262 to their short positions. As of the latest report, managed money is long palladium by a ratio of 2.57:1, which is a large jump from the previous week of 1.83:1 and the ratio two weeks ago of 1.63:1.

Platinum:

For the week, January platinum lost $41.80. The COT report revealed that managed money liquidated 1,967 of their long positions and added 329 to their short positions. Commercial interests added 358 to their long positions and liquidated 2,785 of their short positions. As of the latest report, managed money remains long platinum by a ratio of 1.38:1, which is down from the previous week of 1.49:1 and the ratio two weeks ago of 1.49:1.

During the past week, January platinum recorded a new contract low of $893.40, which is the lowest print on the monthly continuation chart since December 2008 when platinum made a low of $783.00. The January contract broke below the January 2009 low of 914.00 last week. The low print made during 2008 occurred in October of that year when platinum made a low of 761.80.

To put the platinum move in context consider that palladium, which is a competitor to platinum made a low of 176.10 in January 2009. The January 2016 contract closed at $697.60 on October 2 while the January 2016 platinum contract closed at 907.30. In summary, the relationship of platinum to palladium and gold has changed dramatically. Typically, platinum is priced at a $100.00- $200.00 premium to gold and on Friday closed at more than a $200.00 discount to the yellow metal. It is remarkable that managed money remains net long platinum despite it selling at nearly 7 year lows.

Gold: On October 1, December gold generated a short-term sell signal, which reversed the September 25 short-term buy signal. December gold remains on an intermediate term sell signal.

For the week, December gold lost $9.00. The COT report revealed that managed money added 5,102 to their long positions and liquidated 14,633 of their short positions. Commercial interests added 5,838 to their long positions and also added 12,410 to their short positions. As of the latest report, managed money is long gold by a ratio of 1.56:1, which is up from the previous week of 1.24:1 and is a substantial jump from the ratio of two weeks ago of 1.09:1.

Silver:

For the week, December silver advanced 15.2 cents. The COT report revealed that managed money liquidated 64 contracts of their long positions and added 5,294 to their short positions. Commercial interests added 307 contracts to their long positions and liquidated 42 of their short positions. As of the latest report, managed money is long silver by a ratio of 1.29:1, which is down from the previous week of 1.53:1, but up from the ratio two weeks ago of 1.06:1.

Canadian dollar:

For the week, the December Canadian dollar advanced 80 pips. The COT report revealed that leverage funds liquidated 6,830 of their long positions and also liquidated 1,378 of their short positions. As of the latest report, leverage funds are short the Canadian dollar by a ratio of 3.72:1, which is a large jump from the previous week of 2.67:1 and a substantial increase from the ratio two weeks ago of 3.29:1.

Australian dollar:

For the week, the December Australian dollar advanced 16 pips. The COT report revealed that leverage funds liquidated 1,028 of their long positions and also liquidated 2,747 of their short positions. As of the latest report, leverage funds are short the Australian dollar by a ratio of 3.09:1, which is up slightly from the previous week of 3.07:1 and a large jump from the ratio two weeks ago of 1.88:1.

Swiss franc:

For the week, the December Swiss franc advanced 98 pips. The COT report revealed that leverage funds liquidated 307 contracts of their long positions and added 383 to their short positions. As of the latest report, leverage funds are short the Swiss franc by a ratio of 1.74:1, which is up from the previous week of 1.65:1 and a large jump from the ratio two weeks ago of 1.04:1.

British pound:

For the week, the December British pound lost 3 pips. The COT report revealed that leverage funds added 2,833 to their long positions and also added 3,153 to their short positions. As of the latest report, leverage funds are long the British pound by a ratio of 1.90:1, which is down from the previous week of 2.03:1 and the ratio two weeks ago of 2.11:1.

Euro:

For the week, the December euro advanced 38 pips. The COT report revealed that leverage funds added 1,800 contracts to their long positions and also added 3,286 to their short positions. As of the latest report, leverage funds are short the euro by a ratio of 2.62:1, which is down from the previous week of 2.66:1 and the ratio two weeks ago of 2.77:1.

Yen:

For the week, the December yen advanced 52 pips. The COT report revealed that leverage funds liquidated 7,334 of their long positions and also liquidated 4,299 of their short positions. As of the latest report, leverage funds are short the yen by a ratio of 2.17:1, which is up from the previous week of 1.86:1, but down from the ratio two weeks ago of 2.49:1.

Dollar index:

For the week, the December dollar index lost 47 points. The COT report revealed that leverage funds added 5,477 to their long positions and liquidated 2,909 of their short positions. As of the latest report, leverage funds are long the dollar index by a ratio of 2.00:1, which is almost double the previous week’s ratio of 1.05:1 and the ratio two weeks ago of 1.04:1.

S&P 500 (250 x):

For the week, the December S&P 500 futures contract advanced 23.90 points. The COT report revealed that leverage funds added 1,208 contracts to their long positions and also added 753 to their short positions. As of the latest report, leverage funds are long the S&P 500 futures contract by a ratio of 1.18:1, which is up from the previous week of 1.13:1, but down from the ratio two weeks ago of 1.52:1.

10 Year Treasury Note:

For the week, the December 10 year treasury note advanced 1-16 points. The COT report revealed that leverage funds added 42,105 to their long positions and also added 77,369 to their short positions. As of the latest report, leverage funds are short the 10 year note by ratio of 1.80:1, which is up from the previous week of 1.79:1, but down from the record short ratio of 2.16:1 made two weeks ago.

During the past week (Friday October 2), the December 10 year note recorded a new contract high of 130-004.

Though leverage funds are massively short the 10 year note, OIA has kept its clients on the correct side of the trade ever since the 10 year note generated a short-term buy signal on July 6 and an intermediate term buy signal on August 3.