This week’s COT report covers the period from June 11 – June 17.

Soybeans:

For the week, July soybeans lost 10.00 cents, August -8.00, new crop November +10.25. The COT report revealed that managed money liquidated 13,053 contracts of their long positions and added 14,600 contracts to their short positions. Commercial interests liquidated 2,053 contracts of their long positions and also liquidated 41,894 contracts of their short positions. As of the latest report, managed money is long soybeans by ratio of 2.09:1, which is down substantially from the previous week of 2.94:1 and the ratio of 2 weeks ago of 4.22:1.

Soybean meal:

For the week, July soybean meal lost $8.70, August – 3.70, new crop December +2.20. The COT report revealed that managed money liquidated 6,581 contracts of their long positions and added 1,089 contracts to their short positions. Commercial interests added 3,011 contracts to their long positions and liquidated 7,774 contracts of their short positions. As of the latest report, managed money is long soybean meal by ratio of 4.09:1, which is down from the previous week of 4.67:1 and the ratio of 2 weeks ago of 4.76:1.

Soybean oil:

For the week, July soybean oil advanced 44 points, August +45, new crop December +38. The COT report revealed that managed money added 2,864 contracts to their long positions and liquidated 2,609 contracts of their short positions. Commercial interests liquidated 4,124 contracts of their long positions and added 3,755 contracts to their short positions. As of the latest report, managed money is short soybean oil by ratio 1.19:1, which is down from the previous week of 1.28:1 and about the same as the ratio of 2 weeks ago of 1.20:1.

Corn:

For the week, July corn advanced 6.25 cents, September +5.25, new crop December +4.50. The COT report revealed that managed money added 4,176 contracts to their long positions and also added 12,716 contracts to their short positions. Commercial interests liquidated 2,813 contracts of their long positions and also liquidated 15,856 contracts of their short positions. As of the latest report, managed money is long corn by ratio of 1.93:1, which is down from the previous week of 2.07:1 and the ratio of 2 weeks ago of 2.54:1.

Chicago wheat:

For the week, July Chicago wheat lost 0.75 cents, September -3.25, new crop December -1.25. The COT report revealed that managed money liquidated 652 contracts of their long positions and added 22 contracts to their short positions. Commercial interests added 2,554 contracts to their long positions and also added 522 contracts to their short positions. As of the latest report, managed money is short Chicago wheat by ratio of 1.21:1, which is about the same as the previous week of 1.20:1, but a complete reversal from 2 weeks ago when managed money was long Chicago wheat by ratio of 1.11:1.

Kansas City wheat:

For the week, July Kansas City wheat advanced 7.50 cents, September +2.25, new crop December -1.25. The COT report revealed that managed money added 838 contracts to their long positions and also added 880 contracts to their short positions. Commercial interests liquidated 1,650 of their long positions and also liquidated 2,618 contracts of their short positions. As of the latest report, managed money is long Kansas City wheat by ratio of 2.82:1, which is down slightly from the previous week of 2.95:1, and down substantially from the ratio of 2 weeks ago of 3.66:1.

Thus far in the 2nd quarter, August soybean meal is the out performer with a gain of 0.71%, August soybeans +0.04%, August soybean oil -0.67%, September Kansas City wheat -6.85%, September corn -10.71%, September Chicago wheat -16.30%.

Year to date, August soybean meal is the out performer with a gain of 12.89%, August soybeans +10.29%, September Kansas City wheat +9.41%, September corn +1.07%, August soybean oil +0.70%, September Chicago wheat -5.31%.

Cotton:

For the week, July cotton advanced 1.18 cents, new crop December -67 points, March 2015 -73. The COT report revealed that managed money added 1,033 contracts to their long positions and liquidated 3,752 contracts of their short positions. Commercial interests added 4,200 contracts to their long positions and also added 1,312 contracts to their short positions. As of the latest report, managed money is long cotton by ratio of 2.59:1, which is up substantially from the previous week of 2.09:1, but below the ratio of 2 weeks ago of 2.85:1.

Sugar #11: On June 19, October sugar generated a short and intermediate term buy signal.

For the week, July sugar advanced 88 points, October +90, March 2015 +82. The COT report revealed that managed money liquidated 5,924 contracts of their long positions and added 8,912 contracts to their short positions. Commercial interests liquidated 1,141 contracts of their long positions and also liquidated 12,279 contracts of their short positions. As of the latest report, managed money is long sugar by ratio of 1.64:1, which is down from the previous week of 1.84:1 and the ratio of 2 weeks ago of 2.34:1.

The current ratio is lower than the ratio of the March 4 report when managed money was long sugar by ratio of 1.77:1, but above the ratio recorded on the COT tabulation date of February 25, 2014 when managed money was long sugar by ratio of 1.25:1.

Coffee:

For the week, the September coffee lost 95 points, December -95, March 2015 -85. The COT report revealed that managed money liquidated 541 contracts of their long positions and added 288 contracts to their short positions. Commercial interests liquidated 3,103 contracts of their long positions and added 331 contracts to their short positions. As of the latest report, managed money is long coffee by ratio of 6.01:1, which is down from the previous week of 6.31:1 and the ratio of 2 weeks ago of 6.53:1.

The current ratio is the lowest since the beginning of the bull market in late January 2014.

Cocoa:

For the week, September cocoa gained $5.00, December +7.00, March 2015 +8.00. The COT report revealed that managed money added 3,678 contracts to their long positions and also added 1,716 contracts to their short positions. Commercial interests liquidated 2,608 contracts of their long positions and added 1,582 contracts of their short positions. As of the latest report, managed money is long cocoa by ratio of 4.09:1, which is down from the previous week of 4.25:1 and the ratio of 2 weeks ago of 4.50:1.

Thus far in the 2nd quarter, September cocoa is the out performer with a gain of 4.40%, October sugar +1.08%, September coffee -3.60%, December cotton -3.65%.

Year to date, September coffee is the out performer with a gain of 49.81%, September cocoa +13.89%, October sugar +9.97%, December cotton -1.72%.

Live cattle:

For the week, August cattle lost 30 points, October -70, December -1.25 cents. The COT report revealed that managed money liquidated 2,567 contracts of their long positions and added 1,743 contracts to their short positions. Commercial interests added 5,426 contracts to their long positions and liquidated 2,475 contracts of their short positions. As of the latest report, managed money is long cattle by ratio of 12.51:1, which is down from the previous week of 15.37:1 and the ratio of 2 weeks ago of 15.55:1.

The current ratio is the lowest since the March 11 COT tabulation date when managed money was long cattle by ratio of 12.19:1.

Lean hogs:

For the week, July lean hogs advanced 82 points, August -2.12 cents, October – 2.03. The COT report revealed that managed money liquidated 201 contracts of their long positions and also liquidated 267 of their short positions. Commercial interests liquidated 1,001 contracts of their long positions and added 4,505 contracts to their short positions. As of the latest report, managed money is long hogs by ratio of 6.63:1, which is up slightly from the previous week of 6.47 : 1 but down significantly from the ratio of 2 weeks ago of 7.97:1.

Thus far in the 2nd quarter, August live cattle is the out performer with a gain of 8.86%, August lean hogs +4.51%. Year to date, August lean hogs is the out performer with a gain of 33.04%, August live cattle +14.50%.

WTI crude oil:

For the week, August WTI crude oil advanced 66 cents, September +90, October + $1.08. The COT report revealed that managed money added 10,594 contracts to their long positions and also added 7,708 contracts of their short positions. Commercial interests liquidated 7,155 contracts of their long positions and added 2,887 contracts to their short positions. As of the latest report, managed money is long WTI crude oil by ratio of 10.55:1, which is down substantially from the previous week of 13.20:1 and the ratio of 2 weeks ago of 13.54:1.

The reduction of the ratio was due to the addition of short positions. The current ratio is the lowest since the COT tabulation date of May 20 when managed money was long WTI crude oil by ratio of 10.33:1.

During the rally in  WTI, crude oil, We have been advising a stand aside posture. The reason is we think crude oil and this includes Brent, may be surprised by a rapprochement between the United States and Iran. If crude oil continues to climb there is a great deal of incentive on the part of the United States to allow Iran to begin pumping oil and exporting it to world markets. Iran, who’s oil has been embargoed desperately wants to increased exports and therefore a potential win-win situation with respect to oil may be created by the chaos in Iraq. It is becoming more apparent the United States needs Iran to help bring some measure of control to the civil war within Iraq, which could spill over into Syria and other parts of the Middle East.

We think the potential for a pact between the U.S. and Iran is too great to merit long crude positions. If trading WTI or Brent, we strongly suggest that options be used instead of futures. Another point is that being long silver (and eventually gold) benefits from increasing petroleum prices because of inflation implications. Therefore, clients will indirectly benefit if crude oil prices continue to climb. Stand aside in crude oil.

Heating oil:

For the week, July heating oil gained 6.36 cents, August +6.42, September +6.39. The COT report revealed that managed money added 10,825 contracts to their long positions and liquidated 91 contracts of their short positions. Commercial interests liquidated 6,075 contracts of their long positions and added 9,158 contracts to their short positions. As of the latest report, managed money is long heating oil by ratio of 2.47:1, which is up substantially from the previous week of 1.87:1 and up fractionally from the ratio of 2 weeks ago of 2.39:1.

Gasoline:

For the week, July gasoline advanced 7.00 cents, August +7.28, September +7.04. The COT report revealed that managed money added 1,696 contracts to their long positions and liquidated 3,015 contracts of their short positions. Commercial interests added 2,301 contracts to their long positions and also added 6,588 contracts to their short positions. As of the latest report, managed money is long gasoline by ratio of 3.75:1, which is up in the previous week of 3.24:1 and the ratio of 2 weeks ago of 3.56:1.

Natural gas:

For the week, July natural gas lost 20.8 cents, August -19.6, September -19.5. The COT report revealed that managed money added 13,635 contracts to their long positions and also added 6,452 contracts to their short positions. Commercial interests added 9,807 contracts to their long positions and also added 11,920 contracts to their short positions. As of the latest report, managed money is long natural gas by ratio of 1.35:1, which is up fractionally from the previous week of 1.33:1, but below the ratio of 2 weeks ago of 1.39:1.

As the extract shows from last weekend’s report, we were concerned about the change in the spread for the July-November 2014 contracts. Our concern was well-founded and the July contract lost 20.8 cents for the week.  Additionally, the August contract appears to be on the verge of generating a short-term sell signal.  The July-November 2014 spread closed at 4.1 cents premium to November, which is the lowest print since April 1, 2014 when the spread closed at 4.3 cents premium to November and the July contract closed at $4.348. Stand aside

From the June 15 Weekend Wrap:

“Beginning with the May 11 Weekend Wrap, we wrote about the nearby months inverting over the distant months, in particular the November contract. We said that this was an indication of higher prices in the offing, which occurred prior to natural gas generating a short-term buy signal on June 6. The market has rallied, but we are concerned that the July 2014-November 2014 spread has moved from a premium to a discount. For example, on Friday, the spread closed at 3 cents premium to November, which broke below the most recent low of 2.8 cents premium to November on June 11, which was support going back to May 12 when the spread closed at 2.8 cents premium to November.”

Thus far in the 2nd quarter, August gasoline is the out performer with a gain of 8.68%, August WTI crude oil +7.88%, August Brent crude oil +7.21%, August heating oil +4.67%, August natural gas +3.08%, August ethanol -5.37%.

Year to date, August ethanol is the out performer with a gain of 19.60%, August WTI crude oil +11.58%, August natural gas +10.13%, August gasoline +8.47%, August Brent crude oil +5.75%, August heating oil +1.61%.

Copper:

For the week, July copper advanced 9.20 cents. The COT report revealed that managed money liquidated 2,045 contracts of their long positions and added 3,357 contracts to their short positions. Commercial interests added 938 contracts to their long positions and liquidated 1,663 contracts of their short positions. As of the latest report, managed money is short copper by ratio of 1.01:1, which is a complete reversal from the previous week when managed money was long by ratio of 1.19:1 and the ratio of 2 weeks ago when they were long by 1.74:1.

July copper began rallying on June 13 and through June 19 has advanced 6.30 cents while total open interest declined by 9321 contracts.This is negative open interest action relative to the price advance. On June 20, July copper advanced 4.30 cents on volume of 72,357 contracts and total open interest declined by 25 contracts. Keep in mind these are the preliminary stats, and although volume figures are generally accurate, open interest numbers change by the final report. However, if  final open interest is anywhere close to preliminary stats, this would be negative for copper prices going forward. Also, on June 20, July copper remains on a short and intermediate term sell signal. It appears that copper may be moving higher in sympathy with gold and silver. At this juncture, we recommend a stand aside posture.

Palladium:

For the week, September palladium advanced $9.60. The COT report revealed that managed money liquidated 1,264 contracts of their long positions and added 275 contracts to their short positions. Commercial interests added 169 contracts to their long positions and liquidated 1,440 contracts of their short positions. As of the latest report, managed money is long palladium by ratio of 4.60:1, which is down significantly from the previous week of 5.10:1 and the ratio of 2 weeks ago of 5.50:1.

Platinum:

For the week, July platinum gained $22.30. The COT report revealed that managed money liquidated 3,230 contracts of their long positions and added 316 contracts to their short positions. Commercial interests added 663 contracts to their long positions and also added 611 contracts to their short positions. As of the latest report, managed money is long platinum by ratio of 10.82:1, which is down substantially from the previous week of 13.00:1 and down dramatically from the ratio of 2 weeks ago of 18.17:1.

Gold: On June 20, August gold generated a short and intermediate term buy signal.

For the week, August gold advanced $42.50. The COT report revealed that managed money added 1,829 contracts to their long positions and liquidated 13,676 contracts of their short positions. Commercial interests added 369 contracts to their long positions and also added 4,091 contracts to their short positions. As of the latest report, managed money is long gold by ratio of 1.89:1, which is up from the previous week of 1.52:1 and the ratio of 2 weeks ago of 1.52:1.

After the generation of buy signals, the market has a tendency to pullback from 1-3 days and this is the opportunity to initiate bullish positions. Stand aside until gold has corrected. We will inform clients when it is the opportune time to initiate bullish positions.

Silver:

For the week, July silver advanced $1.305. The COT report revealed that managed money added 925 contracts to their long positions and liquidated 9,128 contracts of their short positions.Commercial interests added 924 contracts to their long positions and added 1,843 contracts to their short positions. As of the latest report, managed money is long silver by ratio of 1.20:1, which is a complete reversal from the previous week when they were short by ratio of 1.11:1 and the ratio of 2 weeks ago when managed money was short silver by ratio of 1.22:1.

In the June 16 report OIA recommended initiating bullish positions and use the June 17 low of 19.435 as the exit point for bullish positions. The trade has worked out very well, and we expect to see silver move higher after it has had a chance to correct its overbought condition.As the extracts from the June 1 report indicate, OIA made a prescient observation when we noted the net short position in silver might indicate silver was close to a bottom.

From the June 1 Weekend Wrap:

“In all the years that we have followed silver, rarely do we ever see managed money net short, therefore this week’s ratio is something of a milestone.”

“This week, July silver closed at $18.682, which is the lowest close since the week of July 1, 2013 when July silver closed at 18.726. The previous week (June 24, 2013), July silver made a low of 18.185 and this appears to be the next downside target. We have no idea whether silver will find support at this level, and will not speculate about what may or may not happen. However, the fact that managed money is significantly net short silver, may be an indicator that we are closer to a low than many people think. The 500 week moving average for silver is $19.02.”

Thus far in the 2nd quarter, September palladium is the out performer with a gain of 5.70%, July silver +5.11%, July copper +3.03%, July platinum +2.80%, August gold +2.45%.

Year to date, September palladium is the out performer with a gain of 14.03%, August gold +9.24%, July silver +7.39%, July platinum +6.09%, July copper -7.65%.

Canadian dollar:

For the week, the September Canadian dollar gained 89 pips. The COT report revealed that leveraged funds liquidated 11,456 contracts of their long positions and added 368 contracts to their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio of 2.42:1, which is up dramatically from the ratio of 1.59:1 of the previous week and the ratio of 2 weeks ago of 1.62:1.

Australian dollar:

For the week, the September Australian dollar lost 8 pips. The COT report revealed that leveraged funds liquidated 2,293 contracts of their long positions and added 4,863 contracts to their short positions. As of the latest report, leveraged funds are long the Australian dollar by ratio of 2.07:1, which is down substantially from the previous week of 2.57:1 and the ratio of 2 weeks ago of 2.37:1.

Swiss franc:

For the week, the September Swiss franc advanced 58 pips. The COT report revealed that leveraged funds added 6,050 contracts to their long positions and liquidated 5,216 contracts of their short positions. As of the latest report, leveraged funds are now long the Swiss franc by ratio of 1.32:1, which is a complete reversal from the previous week when they were short by ratio of 1.76:1 and the ratio of 2 weeks ago of 1.55:1.

British pound:

For the week, the September British pound advanced 46 pips. The COT report revealed that leveraged funds added 15,112 contracts to their long positions and also added 6,039 contracts to their short positions. As of the latest report, leveraged funds are long the British pound by ratio of 3.27:1, which is down slightly from the ratio of 2 weeks ago of 3.37:1, but down dramatically from the ratio of 2 weeks ago of 4.40:1.

Euro:

For the week, the September euro advanced 58 pips. The COT report revealed that leveraged funds added 13,319 contracts to their long positions and also added 11,002 contracts to their short positions. As of the latest report, leveraged funds are short the euro by ratio of 2.20:1, which is down substantially from the previous week of 2.85:1, but up from the ratio of 2 weeks ago of 1.78:1.

Yen:

For the week, the September yen lost 9 pips. The COT report revealed that leveraged funds liquidated 4,917 contracts of their long positions and also liquidated 5,487 contracts of their short positions. As of the latest report, leveraged funds are short the yen by ratio of 3.97:1, which is up substantially from the previous week of 3.41:1 and the ratio of 2 weeks ago of 3.10:1.

Dollar index:

For the week, the September dollar index lost 31 points. The COT report revealed that leveraged funds added 2,160 contracts to their long positions and liquidated 16,598 contracts of their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 1.47:1, which is down dramatically from the previous week of 3.18:1 and the ratio of 2 weeks ago of 3.99:1.

Although the ratio of shorts is the lowest that we have seen in a couple of months, it appears that the dollar index is getting close to generating a short-term sell signal. This will occur if the high for the day is below OIA’s key pivot point of 80.452..This has bullish implications for commodities and precious metals in particular. Additionally, the moving average set up is bearish for the cash dollar index with the 50 day moving average at 80.097, 100 day 80.104, 200 day 80.294.

Thus far in the 2nd quarter, the September Canadian dollar is the out performer with a gain of 2.93%, September British pound +2.11%, September Australian dollar +1.77%, September yen +1.08%, September dollar index + 0.0037%, September euro -1.29%, September Swiss franc -1.39%.

Year to date, the September Australian dollar is the out performer with a gain of 6.30%, September yen +3.03%, September British pound +2.84%, September dollar index -0.12%, September Canadian dollar -0.75%, September Swiss franc -0.94%, September euro -1.42%.

S&P 500 futures contract (250 x):

For the week, the September S&P 500 futures contract gained 24.90 points. The COT report revealed that leveraged funds liquidated 3,074 contracts of their long positions and added 1,995 contracts to their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by ratio of 1.87:1, which is up from the previous week of 1.37:1 but down from the ratio of 2 weeks ago of 2.06:1.

Thus far in the 2nd quarter, the NASDAQ 100 cash index is the out performer with a gain of 5.75%, S&P 500 cash index +4.84%, New York composite cash index +4.66%, S&P 400 cash index +3.40%, Dow Jones Industrial Average cash index +2.97%, Russell 2000 cash index +1.31%.

Year to date, the S&P 500 cash index is the out performer with a gain of 6.20%, S&P 400 cash index +6.17%, New York composite cash index +5.94%, NASDAQ 100 cash index + 5.86%, Dow Jones Industrial Average cash index +2.23%, Russell 2000 cash index +2.13%.

10 year Treasury Notes: On June 20 September treasury notes generated an intermediate term sell signal after generating a short-term sell signal on June 10.