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The time frame for the current Commitments of Traders report is from Wednesday, August 26 through Tuesday, September 1.

Soybeans:

For the week, November soybeans lost 19.00 cents, January -21.00, March -21.25. The COT report revealed that managed money liquidated 1,046 of their long positions and added 20,535 to their short positions. Commercial interests liquidated 668 contracts of their long positions also liquidated 13,083 of their short positions. As of the latest report, managed money is short soybeans by a ratio of 1.04:1, which is a complete reversal from the previous week when they were long by 1.35:1 and the ratio two weeks ago of 1.63:1.

Soybean meal: On August 31, October and December soybean meal generated an intermediate term sell signals after generating short-term sell signals on August 13.

For the week, October soybean meal lost $7.30, December -5.90, March -5.00. The COT report revealed that managed money liquidated 7,117 of their long positions and added 2,820 to their short positions. Commercial interests liquidated 3,663 of their long positions and also liquidated 17,384 of their short positions. As of the latest report, managed money remains long soybean meal by a ratio of 2.26:1, which is down from the previous week of 2.78:1 and slightly above the ratio two weeks ago of 2.22:1.

Soybean oil:

For the week, October soybean oil lost 1.39 cents, December -1.44, March -1.37. The COT report revealed that managed money added 5,773 to their long positions and also added 4,106 to their short positions. Commercial interests liquidated 8,558 of their long positions and also liquidated 13,579 of their short positions.As of the latest report, managed money is short soybean oil by a ratio of 1.08:1, which is down from the previous week of 1.12:1 and the ratio two weeks ago of 1.16:1.

Corn:

For the week, December corn lost 12.00 cents, March -12.00, May -12.00. The COT report revealed that managed money liquidated 4,282 of their long positions and also liquidated 6,987 of their short positions. Commercial interests liquidated 52,501 of their long positions and also liquidated 49,531 of their short positions. As of the latest report, managed money is long corn by a ratio of 1.54:1, which is up slightly from the previous week of 1.50:1 and the ratio two weeks ago a 1.37:1.

Chicago wheat:

For the week, December Chicago wheat lost 16.00 cents, March -15.50, May -14.75. The COT report revealed that managed money liquidated 11,150 of their long positions and added 9,606 to their short positions. Commercial interests added 6,991 to their long positions and liquidated 11,239 of their short positions. As of the latest report, managed money is short Chicago wheat by a ratio of 1.46:1, which is a large jump from the previous week of 1.09:1 and the ratio two weeks ago of 1.06:1.

During the past week, December, March and May 2016 Chicago wheat made new contract lows of 4.63, 4.72 and 4.77 3/4 respectively.

Kansas City wheat:

For the week, December Kansas City wheat lost 8.75 cents, March -8.75, May -9.25. The COT report revealed that managed money liquidated 1,088 of their long positions and added 297 to their short positions. Commercial interests liquidated 2,050 of their long positions also liquidated 2,719 of their short positions. As of the latest report, managed money is short Kansas City wheat by a ratio of 1.21:1, which is an increase from the previous week of 1.17:1, and the ratio two weeks ago of 1.17:1.

During the past week, December, March and May Kansas City wheat made new contract lows of 4.65 3/4, 4.80 and 4.90 3/4 respectively.

Cotton: 

For the week, December cotton lost 38 points, March -28, May -43. The COT report revealed that managed money liquidated 9,019 of their long positions and added 4,976 to their short positions. Commercial interests added 2,594 to their long positions and liquidated 8,524 of their short positions. As of the latest report, managed money is long cotton by a ratio of 3.37:1, which is down sharply from the previous week of 5.59:1 and below the ratio two weeks ago of 3.85:1.

Remarkably, managed money remains substantially long cotton even though it is close to the contract low.On Friday the December contract closed at 62.62 and the contract low of 61.20 was made August 12. This is a classic case of professional money managers attempting to pick a bottom, which almost always is a bad idea. December cotton remains on short and intermediate term sell signals.

Sugar:

For the week, October sugar gained 30 points, March +25, May +21. The COT report revealed that managed money liquidated 2,409 of their long positions also liquidated 32,946 of their short positions. Commercial interests liquidated 6,718 of their long positions and added 20,871 to their short positions. As of the latest report, managed money is short sugar by a ratio of 1.31:1, which is down sharply from the previous week of 1.52:1 and the ratio two weeks ago of 1.51:1.

Coffee:

For the week, December coffee lost 4.90 cents, March -4.90, May -4.85. The COT report revealed that managed money added 68 contracts to their long positions and also added 5,007 to their short positions. Commercial interests added 3,683 to their long positions and liquidated 1,448 of their short positions. As of the latest report, managed money is short coffee by a ratio of 1.68:1, which is up from the previous week of 1.51:1 and a major reversal from two weeks ago when managed money was long coffee by a ratio of 1.14:1.

During the past week, December, March and May coffee made new contract lows of 1.1775, 1.2135, and 1.2370 respectively.

Cocoa:

For the week, December cocoa advanced $56.00, March +51.00, May +47.00. The COT report revealed that managed money added 1,683 to their long positions and liquidated 901 contracts of their short positions. Commercial interests added 247 contracts to their long positions and also added 3,550 to their short positions. As of the latest report, managed money is long cocoa by a ratio of 3.00:1, which is up from the previous week of 2.74:1 and the ratio two weeks ago of 2.63:1.

It appears that December cocoa is on the verge of generating a short-term buy signal. OIA’s key pivot point for September 4 is $3,139, although this may change slightly on September 6.On September 4, December cocoa closed at $3,168, up $54.00 and for a buy signal to occur, the low of the day must be above the pivot point.

The longer-term moving averages are in a bullish set up with the 50 day moving average standing at $3,192, 100 day: 3,115, the 200 day: 2,970.

The December contract made its contract high of 3,375 on July 15, 2015 and the contract low of 2,660 on February 2, 2015. December cocoa generated a short-term sell signal on July 27 and an intermediate term sell signal on August 12. Though managed money is net long by 3 to 1, this position is at the low end of the range going back several weeks with the low occurring two weeks ago at 2.63:1.  

If a short and intermediate term buy signal is generated, we expect December cocoa to test its contract high, and there is plenty of potential buying power on the sidelines to power the market substantially higher. A bull market in a commodity is rare these days.

Live cattle:

For the week, October live cattle lost 3.50 cents, December -3.28, February -3.20. The COT report revealed that managed money liquidated 98 contracts of their long positions and added 2,610 to their short positions. Commercial interests added 4,497 to their long positions and liquidated of 1,199 of their short positions. As of the latest report, managed money is long live cattle by a ratio of 1.35:1, which is down from the previous week of 1.44:1 and the ratio two weeks ago of 1.56:1.

The current long ratio of 1.35:1 for live cattle is the lowest recorded during 2015.

Lean hogs:

For the week, October lean hogs advanced 2.73 cents, December +1.30, February +1.63. The COT report revealed that managed money liquidated 375 contracts of their long positions and added 572 to their short positions. Commercial interests added 882 contracts to their long positions and liquidated 261 of their short positions. As of the latest report, managed money is long lean hogs a ratio of 1.64:1, which is down slightly from the previous week of 1.69:1, and up slightly from the ratio two weeks ago of 1.59:1.

WTI crude oil: On September 3, October and November WTI crude oil generated short-term buy signals, but remain on intermediate-term sell signals.

For the week, October WTI crude oil advanced 83 cents, November +65, December ++37. The COT report revealed that managed money added 5,653 to their long positions and liquidated 15,303 of their short positions. Commercial interests liquidated 8121 of their long positions and also liquidated 1200 of their short positions.

As of the latest report, managed money is long WTI crude oil by a ratio of 1.78:1, which is up from the previous week of 1.57:1 and is a substantial increase from the ratio of 1.52:1, which has been the lowest ratio recorded during the course of the bear market, which began in June of 2014.

From August 26 through September 1 (the span of the COT report), October WTI crude advanced 16.15%. Total open interest increased by 11,643 contracts in this time frame. As we have pointed out in past reports, new buying is the dominant factor moving prices higher, not short covering. The current COT report bears this out with the net short position of managed money declining only 9,650 contracts.

Breaking down the COT report further, we find that “Swap Dealers” increased their net long position by 804 contracts while “Other Reportables” increased their net short positions by 16,177 contracts. “Non-Reportables” showed a decline in long positions of 2,558.

Heating oil: On September 3, October and November heating oil generated short term buy signals, but remain on intermediate term sell signals.

For the week, October heating oil advanced 49 ticks, November +68, December +60. The COT report revealed that managed money liquidated 6,625 of their long positions and also liquidated 8,469 of their short positions. Commercial interests liquidated 1,513 of their long positions also liquidated 2,506 of their short positions. As of the latest report, managed money is short heating oil by a ratio of 2.12:1, which is up from the previous week of 1.94:1 and the ratio two weeks ago of 1.91:1.

The current short ratio of 2.12:1, is the highest recorded during the course of the bear market, which began during June of 2014. Interestingly, the record high short ratio occurs at a time when heating oil generated a short-term buy signal and is headed higher.

Gasoline:

For the week, October gasoline advanced 2.11 cents, November +2.41, December +2.17. The COT report revealed that managed money liquidated 15,454 contracts of their long positions also liquidated 10,072 of their short positions. Commercial interests liquidated 17,600 contracts of their long positions also liquidated 11,083 of their short positions.As of the latest report, managed money is long gasoline by a ratio of 1.44:1, which is down from the previous week of 1.46:1, but up from the ratio two weeks ago of 1.32:1.

Thus far in the third quarter, October heating oil is the out performer with a loss of 16.98%, October Brent crude oil -21.87%, October gasoline -22.32%, October WTI crude oil -23.13%.

Year to date, October gasoline is the out performer with a loss of 11.97%, October Brent crude oil -13.81%, October heating oil -15.33%, October WTI crude oil -20.76%.

From August 27, when the rally in the petroleum complex began through September 4, October WTI crude oil is the out performer with a gain of 18.28%, October Brent crude oil +13.81%, October heating oil +13.70%, October gasoline +13.35%.

Natural gas:

For the week, October natural gas lost 6.00 cents, November -5.10, December -4.20. The COT report revealed that managed money liquidated 1,473 of their long positions and also liquidated 13,129 of their short positions.Commercial interests liquidated 1,523 of their long positions and also liquidated 2,492 of their short positions. As of the latest report, managed money is short natural gas by a ratio of 1.77:1, which is down from the previous week of 1.83:1, but up slightly from the ratio two weeks ago of 1.73:1.

Copper:

For the week, December copper lost 3.40 cents. The COT report revealed that managed money added 16 contracts to their long positions and liquidated 2,459 of their short positions. Commercial interests liquidated 74 contracts of their long positions and added 1,854 to their short positions. As of the latest report, managed money is short copper by a ratio of 1.46:1, which is down from the previous week of 1.53:1 and a substantial reduction from the ratio two weeks ago of 1.79:1. Copper remains on a short and intermediate sell signal.

Palladium:

For the week, December palladium lost $13.00. The COT report revealed that managed money added 1,206 contracts of their long positions and also added 7 contracts to their short positions. Commercial interests liquidated 326 of their long positions and added 233 to their short positions. As of the latest report, managed money is long palladium by a ratio of 1.73:1, which is up from the previous week of 1.60:1 and the ratio two weeks ago of 1.70:1.

Platinum:

For the week, October platinum lost $29.30. The COT report revealed that managed money liquidated 1,858 of their long positions and also liquidated 3,552 of their short positions. Commercial interests liquidated 320 contracts of their long positions and added 152 to their short positions. As of the latest report, managed money is long platinum by a ratio of 1.54:1, which is an increase from the previous week of 1.39:1 and the ratio two weeks ago of 1.31:1.

Gold:

For the week, December gold lost $12.60. The COT report revealed that managed money liquidated 6815 of their long positions and also liquidated 6798 of their short positions. Commercial interests liquidated 1523 of their long positions and also liquidated 131 of their short positions. As of the latest report, managed money remains long gold by a ratio of 1.56:1, which is up from the previous week of 1.52:1 and is a substantial increase from the ratio two weeks ago of 1.08:1.

December gold is getting close to generating a short-term sell signal, and the key pivot point for September 4 is $1117.60. Though this will change somewhat on September 7, it provides a frame of reference for Monday’s trading. December gold closed at $1121.40 on September 4. For a short-term sell signal to occur, the high of the day must be below the pivot point, and we think this is likely during the coming week.

For the rally to resume, the December contract must make a daily low above OIA’s key pivot point for September 4 of $1134.80. We think this is unlikely.

On August 20, December gold generated a short-term buy signal, but has been unable to generate an intermediate term buy signal. During the time gold has been on a short-term buy signal, the open interest action has been negative for the most part and trading volumes have been disappointing as well.  Due to the sizable net long position of managed money, there should be sufficient selling pressure to push gold prices down to contract lows ($1073.70/July 24).

The current net long position of managed money is the largest in a couple of months and the most recent high ratio occurred in the COT report tabulated on June 23 when managed money was long gold by a ratio of 1.47:1. If long, we suggest positions be liquidated. We have not recommended long or short positions in gold recently.

Silver:

For the week, December silver closed unchanged. The COT report revealed that managed money added 1,300 contracts to their long positions and liquidated 2,829 of their short positions. Commercial interests liquidated 2,864 of their long positions and also liquidated 5,229 of their short positions. As of the latest report, managed money is long silver by a ratio of 1.12:1, which is a substantial jump from the previous week of 1.002:1 and the ratio two weeks ago of 1.008:1. December silver remains on short and intermediate term sell signals.

Canadian dollar:

For the week, the September Canadian dollar lost 22 pips. The COT report revealed that leverage funds added 1,122 to their long positions and liquidated 1,417 of their short positions. As of the latest report, leverage funds are short the Canadian dollar by a ratio of 4.92:1, which is down from the previous week of 5.44:1 and is a dramatic drop from the ratio two weeks ago of 7.18:1.

Australian dollar:

For the week, the September Australian dollar lost 2.38 cents. The COT report revealed that leverage funds added 1,651 to their long positions and also added 465 to their short positions. As of the latest report, leverage funds are short the Australian dollar by a ratio of 5.96:1, which is down from the previous week of 6.94:1 and the ratio two weeks ago of 7.85:1.

During the past week, the September Australian dollar made a new contract low of 69.05, which is the lowest print on the monthly continuation chart since April 2009 when the June 2009 contract made a monthly low of 68.22.

Swiss franc: On September 3, the September and December Swiss franc generated short and intermediate term sell signal signals.

For the week, the September Swiss franc lost 1.09 cents. The COT report revealed that leverage funds added 825 contracts to their long positions and liquidated 3,396 of their short positions. As of the latest report, leverage funds are short the Swiss franc by a ratio of 2.65:1, which is a substantial drop from the previous week of 3.90:1, but up from the ratio two weeks ago of 2.44:1.

British Pound:

For the week, the September British pound lost 2.06 cents. The COT report revealed that leverage funds liquidated 11,020 of their long positions and added 2,081 to their short positions. As of the latest report, leverage funds are long the British pound by a ratio of 2.15:1, which is down substantially from the previous week of 2.68:1, and down fractionally from the ratio two weeks ago of 2.18:1.

As of September 4, the September pound has  fallen for 9 consecutive sessions, which is the longest losing streak for the pound since 2008. On August 27, OIA announced the September and December pound generated short and intermediate term sell signals. We have cautioned clients to remain on the sidelines until the British pound has had a substantial rally, which we think is on the horizon. Managed money has been piling in on the short side and we expect them to cover vigorously once the pound begins to rally.

Euro:

For the week, the September euro lost 35 pips. The COT report revealed that leverage funds liquidated 7,996 of their long positions also liquidated 10,170 contracts of their short positions. As of the latest report, leverage funds are short the euro by ratio of 1.86:1, which is up from the previous week of 1.77:1, the down substantially from the ratio two weeks ago of 2.40:1.

Yen:

For the week, the September yen advanced 167 pips. The COT report revealed that leverage funds added 8,212 to their long positions and liquidated 23,155 of their short positions. As of the latest report, leverage funds are short the yen by a ratio of 2.40:1, which is down substantially from the previous week’s ratio of 3.95:1 and is a dramatic reduction from the ratio two weeks ago of 5.73:1.

On August 24, OIA announced the September and December yen generated short and intermediate term buy signals.

Dollar index:

For the week, the September dollar index gained 11 ticks. The COT report revealed that leverage funds liquidated 3,533 of their long positions and also liquidated 4,335 of their short positions. As of the latest report, managed money is long the dollar index by a ratio of 3.14:1, which is a large jump from the previous week of 2.39:1 and the ratio two weeks ago of 2.00:1.

Despite the large net long position of managed money in the dollar index, it remains on short and intermediate term sell signals.

S&P 500 (250 x):

For the week, the September S&P 500 futures contract lost 68.00 points. The COT report revealed that leverage funds liquidated 304 of their long positions and added 1,292 to their short positions. As of the latest report, leverage funds are short the S&P 500 futures contract by a ratio of 1.12:1, which is a substantial jump from the previous week up 1.005:1, but below the ratio two weeks ago 1.14:1.

10 Year Treasury Note:

For the week, the September 10 year treasury note advanced 16-4 points. The COT report revealed that leverage funds added 9,519 to their long positions and liquidated 17,808 of their short positions. As of the latest report, leverage funds are short the 10 year note by a ratio of 1.92:1, which is down from the previous week of 2.01:1, which is the highest short ratio since the September note generated a short term buy signal on July 6.