The tabulation period for this week’s COT report is from May 7-May 13.

Soybeans:

For the week, July soybeans lost 22.00 cents, August -23.00, new crop November -4.75. The COT report revealed managed money liquidated 3,154 contracts of their long positions and added 1,558 contracts to their short positions. Commercial interests added 11,179 contracts to their long positions and liquidated 5 contracts of their short positions. As of the latest report, managed money is long soybeans by ratio of 6.27:1, which is down from the previous week of 6.76:1 and the ratio of 2 weeks ago of 7.88:1. The current ratio is the lowest since the COT tabulation date of January 28, 2014 when managed money was long by ratio of 5.59:1.

From the May 11 Weekend Wrap:

“On May 7, July soybeans generated a short-term sell signal, and as of Friday, the July contract has rallied 2 days, which is consistent with OIA’s protocol for a 1-3 day countertrend rally after the generation of a sell signal. However, July soybeans are at a crucial juncture and could rally one more day and still not generate a short-term buy signal unless the low for the day is above $14.82. Conceivably, soybeans could have a follow-through rally on Monday and then have a disappointing close.”

The above extract from last week’s report proved to be right on the money when we stated that soybeans could have follow-through on Monday and then have a disappointing close. The close was certainly disappointing. On Monday, it lost 21.75 cents and for the week the July contract lost 22.00 cents. Additionally, the extract from May 11 said that the countertrend rally was consistent with OIA’s protocol after the generation of a sell signal. As the 2nd quarter stats show for July, August and November contracts, the July contract has been the weakest of the three, which certainly should not be the case due to tightness in old crop soybeans. We think there is a good probability that the July contract could see a strong rally.  

The strength in the new crop November contract versus old crop July and August is supportive to old crop prices. Once the November contract breaks down and generates the sell signal, the psychology of old crop tightness may begin to lessen. This is especially the case because the US is importing soybeans to mitigate short term tightness.

OIA’s key pivot point in July soybeans have wisely warned clients away from entering bullish positions. Soybeans have been unable to make a daily low above the pivot point ever since the July contract generated a short-term sell signal on May 7.

Thus far in the 2nd quarter, new crop November soybeans is the out performer with a gain of 2.88%, August +2.85 percent, July +2.48%.

Year to date, July soybeans is the out performer with a gain of 15.86%, August +13.39%, new crop November +7.62%.

Soybean meal:

For the week, July soybean meal lost $7.10, August -6.30, new crop December -70 cents. The COT report revealed managed money added 4,906 contracts to their long positions and liquidated 2,714 contracts of their short positions. Commercial interests liquidated 954 contracts of their long positions and added 6,454 contracts to their short positions. As of the latest report, managed money is long soybean meal by a ratio of 4.82:1, which is up substantially from the previous week of 4.01:1 and only slightly above the ratio of 2 weeks ago of 4.74:1. Note that managed money did the exact opposite in soybean meal compared to soybeans. 

Thus far in the 2nd quarter, August soybean meal is the out performer with a gain of 4.40%, July +3.58 percent, new crop December +3.38%.

Year to date, July soybean meal is the out performer with a gain of 15.86%, August +13.39%, new crop November +7.62%.

Soybean oil:

For the week, July soybean oil lost 43 points, August -33, new crop December -19. The COT report revealed that managed money added 1,637 contracts to their long positions and also added 7,193 contracts to their short positions. Commercial interests liquidated 6,213 contracts of their long positions and also liquidated 6,934 contracts of their short positions. As of the latest report, managed money is long soybean oil by ratio 1.37:1, which is down from the previous week of 1.56:1 and the ratio of 2 weeks ago of 2.00:1.

Corn: On May 12, December corn generated a short-term sell signal and an intermediate term sell signal on May 15.

On May 15, July corn generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, July corn lost 24.00 cents, September -20.50, new crop December -17.75. The COT report revealed that managed money liquidated 5,239 contracts of their long positions and added 9,196 contracts to their short positions.Commercial interests added 11,678 contracts to their long positions and liquidated 2,078 contracts of their short positions. As of the latest report, managed money is long corn by ratio of 5.32:1, which is down dramatically from the previous week of 6.37:1 and the ratio of 2 weeks ago of 6.29:1.The current ratio is the lowest since the COT tabulation date of March 25, 2014 when managed money was long by ratio of 4.82:1.

Thus far in the 2nd quarter, new crop December corn is the out performer with a loss of 3.46%, September -4.13%, July -4.59%.

Year to date, July corn is the out performer with a gain of 10.64%, September +8.51%, new crop December +6.83%.

Chicago wheat: On May 14, July Chicago wheat generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, July Chicago wheat lost 48.25 cents, September -47.75, new crop December -46.50. The COT report revealed that managed money added 2,856 contracts to their long positions and also added 1,152 contracts to their short positions. Commercial interests liquidated 2,125 contracts of their long positions and also liquidated 6,565 contracts of their short positions. As of the latest report, managed money is long Chicago wheat by ratio of 2.05:1, which is slightly above the previous week’s ratio of 2.03:1 and the ratio of 2 weeks ago of 1.90:1.

Thus far in the 2nd quarter, new crop December wheat is the out performer with a loss of 2.58%, September -3.60%, July -3.88%.

Year to date, July Chicago wheat is the out performer with a gain of 9.32%, new crop December +9.09%, September + 9.06%.

Kansas City wheat:

For the week, July Kansas City wheat lost 61.00 cents, September -60.75, new crop December -57.50. The COT report revealed that managed money liquidated 711 contracts of their long positions and added 1,631 contracts to their short positions. Commercial interests liquidated 1,400 contracts of their long positions and also liquidated 5,669 contracts of their short positions. As of the latest report, managed money is long Kansas City wheat by ratio of 4.55:1, which is down from the previous week of 5.55:1 and the ratio of 2 weeks ago of 5.24:1.The current ratio is the lowest since the COT tabulation date of March 11, 2014 when managed money was long KC wheat by ratio of 4.73:1.Ironically, Chicago wheat is trading at the very high-end of its ratio and Kansas City is trading at a multi-month low ratio.

Thus far in the 2nd quarter, December Kansas City wheat is the out performer with a gain of 0.77%, September +0.36%, July +0.33%.

Year to date, July Kansas City wheat is the out performer with a gain of 19.31%, September +17.87%, December +17.48%.

Thus far in the 2nd quarter, July soybean meal is the out performer with a gain of 3.58%, July soybeans +2.48%, July Kansas City wheat + 0.33%, July soybean oil + 0.30%, July Chicago wheat -3.88%, July corn -4.59 percent.

Year to date, July soybean meal is the out performer with a gain of 19.78%, July Kansas City wheat +19.31%, July soybeans +15.86%, July corn +10.64%, July Chicago wheat +9.32%, July soybean oil +2.23%.

Cotton: On May 12, July cotton generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, July cotton lost 2.54 cents, new crop December – 1.37, March 2015 -1.20. The COT report revealed that managed money liquidated 5,402 contracts of their long positions and added 1,546 contracts to their short positions. Commercial interests added 2,382 contracts to their long positions and liquidated 5,044 contracts of their short positions. As of the latest report, managed money is long cotton by ratio of 5.88:1, which is down substantially from the previous week of 7.35:1 and the ratio of 2 weeks ago of 7.38:1. The current ratio is the lowest since the COT tabulation date of April 15, 2014 when managed money was long cotton by ratio of 5.34:1.

Sugar #11: On May 14, July sugar generated a short-term buy signal, and remains on an intermediate term buy signal.

For the week, July sugar gained 71 points, October + 69, March 2015 +65. The COT report revealed that managed money added 5,651 contracts to their long positions and liquidated 1,728 contracts of their short positions. Commercial interests added 9,175 contracts to their long positions and also added 18,042 contracts to their short positions. As of the latest report, managed money is long sugar by ratio of 3.08:1, which is up from the previous week of 2.92:1 and the ratio of 2 weeks ago of 2.87:1.

Coffee:  On May 12, July coffee generated a short-term sell signal, but remains on an intermediate term buy signal.

For the week, July coffee advanced 1.70 cents, September +1.15, December +1.55. The COT report revealed that managed money liquidated 1,554 contracts of their long positions and added 965 contracts to their short positions. Commercial interests added 3,122 contracts to their long positions and liquidated 2,797 contracts of their short positions. As of the latest report, managed money is long coffee by ratio of 10.25:1, which is down dramatically from the previous week of 13.38:1 (the highest recorded ratio during the run of the bull market, which began in late January). Two weeks ago, the ratio stood at 12.20:1. The current ratio is the lowest since the April 22 COT tabulation date when managed money was long coffee by ratio of 6.50:1.

Cocoa:

For the week, July cocoa advanced $53.00, September +53.00, December +55.00. The COT report revealed that managed money liquidated 4,876 contracts of their long positions and added 764 contracts to their short positions. Commercial interests liquidated 146 contracts of their long positions and also liquidated 4,863 contracts of their short positions. As of the latest report, managed money is long cocoa by ratio of 3.30:1, which is down from the previous week of 3.65:1 and the ratio of 2 weeks ago of 3.84:1.The current ratio is the lowest of 2014.

Thus far in the 2nd quarter, July coffee is the out performer with a gain of 2.81%, July sugar -1.21%, July cocoa -1.72%, July cotton -3.99%.

Year to date, July coffee is the out performer with a gain of 60.77%, July cocoa +7.09%, July sugar +7.05%, July cotton +6.95%.

Live cattle:

For the week, August + 17, October -15. The COT report revealed that managed money liquidated 4,548 contracts of their long positions and also liquidated 176 contracts of their short positions. Commercial interests liquidated 716 contracts of their long positions and also liquidated 4,272 contracts of their short positions. As of the latest report, managed money is long live cattle by ratio of 14.98:1, which is down slightly from the previous week of 15.18:1, but slightly above the ratio of 2 weeks ago of 13.83:1.

Lean hogs:

For the week, June lean hogs lost 1.25 cents, July +70 points, August +3.10 cents. The COT report revealed that managed money liquidated 1,999 contracts of their long positions and added 1,849 contracts to their short positions. Commercial interests added 390 contracts to their long positions and liquidated 6,996 contracts of their short positions. As of the latest report, managed money is long lean hogs by ratio of 14.62:1, which is down dramatically from the previous week of 24.60:1 and the ratio of 2 weeks ago of 29.14:1. The current ratio is the lowest since the COT tabulation date of March 4, 2014 when managed money was long lean hogs by ratio of 9.41:1.

Thus far in the 2nd quarter, August cattle is the out performer with a gain of 2.88%, June cattle +0.29%, June hogs -6.49%.

Year to date, June hogs is the out performer with a gain of 18.75%, August cattle +8.21%, June cattle +6.55%.

WTI crude oil: On May 14, June WTI crude oil generated a short-term buy signal and remains on an intermediate term buy signal.

For the week, June WTI crude oil advanced $2.03, July +2.27, August +2.33. The COT report revealed that managed money added 1,789 contracts to their long positions and liquidated 2,184 contracts of their short positions. Commercial interests liquidated 13,692 contracts of their long positions and also liquidated 4,351 contracts of their short positions. As of the latest report, managed money is long WTI crude oil by ratio of 11.34:1, which is up from the previous week of 10.48:1 and the ratio of 2 weeks ago of 10.38:1.

Heating oil:

For the week, June heating oil advanced 4.68 cents, July +4.69, August +4.70. The COT report revealed that managed money liquidated 2,661 contracts of their long positions and also liquidated 3,155 contracts of their short positions. Commercial interests added 12,432 contracts to their long positions and also added 6,589 contracts of their short positions. As of the latest report, managed money is long heating oil by ratio of 2.51:1, which is up slightly from the previous week of 2.25:1, but down from the ratio of 2 weeks ago of 3.01:1.

Gasoline:

For the week, June gasoline advanced 7.75 cents, July +7.74, August +7.25. The COT report revealed that managed money liquidated 10,712 contracts of their long positions and also liquidated 589 contracts of their short positions. Commercial interests added 7,238 contracts to their long positions and also added 1,811 contracts to their short positions. As of the latest report, managed money is long gasoline by ratio of 4.17:1, which is down from the previous week of 4.59:1 and the ratio of 2 weeks ago of 5.50:1.

Remarkably, the current ratio is the lowest since the COT tabulation date of March 25, 2014 when managed money was long by a ratio of 3.75:1.  It is remarkable because the current period is usually strong seasonally, yet the ratio is trading at the level last seen in early spring.

Natural gas: On May 12, June natural gas generated a short-term sell signal and generated an intermediate term sell signal on May 13.

For the week, June natural gas lost 11.8 cents, July -11.9, August -12.1. The COT report revealed that managed money liquidated 26,636 contracts of their long positions and also liquidated 3,043 contracts of their short positions. Commercial interests added 348 contracts to their long positions and liquidated 6,723 contracts of their short positions. As of the latest report, managed money is long natural gas by ratio of 1.43:1, which is down from the previous week of 1.55:1 and the ratio of 2 weeks ago of 1.58:1. The current ratio is the lowest since the COT tabulation date of December 10, 2013 when managed money was long natural gas by ratio of 1.24:1.

From the May 11 Weekend Wrap:

“We wanted to bring to your attention that near-term spreads have been acting in a very bullish fashion even as natural gas prices have declined. For example, the June 2014-September 2014 spread closed at a 2.3 cents premium to June on May 9, which is the highest close for the spread since February 21, 2014 when the June-September 2014 spread closed at 3.6 cents premium to June and the June contract closed at $4.773. The low for the spread occurred on April 17 when June sold at a 7 tick premium to the September 2014 contract and June natural gas closed at $4.754. Spreads widening out as the general price level declines is bullish.”

The report from last weekend pointed out that near-term spreads were acting in a bullish fashion despite natural gas prices declining. This continued during the past week when the June contract lost 11.8 cents and the June 2014-September 2014 spread widened out a fraction and closed at a 2.5 cents premium to June. Although June natural gas has generated a short and intermediate term sell signal, we fully expect it to reverse and headed higher. We have no time frame in mind, but the spread action tells us it is not far away. The June contract will enter 1st notice day during the next 2 weeks, and therefore the July contract is going to be the new near-term contract to follow. A bull spread in natural gas is a low-cost and low risk way of entering the market, especially if the uptrend is not well-established. 

Some key moving averages to keep your eye on is the 20 day ma of 4.641, 50 day ma and a 4.556, 100 day ma 4.458 and the 200 day moving average of 4.158, which should provide support if natural gas continues on its downtrend.The year to date moving average for the June contract is 4.476 and June natural gas closed at 4.414 on Friday.

Thus far in the 2nd quarter, July gasoline is the out performer with a gain of 2.64%, July Brent crude oil +2.22%, July WTI crude oil + 1.89%, July heating oil + 0.86%, June natural gas +0.25%, June ethanol -6.59%.

Year to date, June ethanol is the out performer with a gain of 29.86%, June natural gas +6.95%, July WTI crude oil +5.41%, July gasoline +2.19%, July Brent crude oil +0.69%, July heating oil -2.31%.

Copper:

For the week, July copper advanced 6.40 cents. The COT report revealed that managed money added 8,392 contracts to their long positions and liquidated 4,095 contracts of their short positions. Commercial interests liquidated 1,442 contracts of their long positions and added 3,662 contracts to their short positions. As of the latest report, managed money is long copper by a large ratio of 1.48:1, which is up dramatically from the previous week when managed money was long by 1.02:1 and the ratio of 2 weeks ago of 1.17:1.

The rally in July copper began in earnest on May 8, and through May 15, total open interest has increased by 7,666 contracts and during this time rallied 11.20 cents. This is a healthy open interest increase relative to the advance. As the extract from the May 12 report shows, OIA stated that in order for July copper to generate an intermediate term buy signal, it had to make a low above 3.1670. After making a new high for the move on May 14 of 3.1780, the July contract has been unable to make a low above OIA’s key pivot point.We cannot determine with any degree of certainty whether copper has the wherewithal to continue its move higher, but the high of May 14 was the highest print since March 7, 2014 (3.2160)

Examining the moving averages, we find that copper currently is trading (Friday’s close 3.1470) slightly below the 100 day moving average of $3.1514 and slightly above the year to date moving average (93 trading days) of 3.1383. It is overbought relative to the 20 day moving average of 3.0796 and the 50 day moving average of 3.0303 However, the 50 day moving average continues to trade below the 200 day moving average of 3.2184, which is a bearish moving average set up.In short, we see nothing compelling about being long copper. Until the July contract trades above OIA’s pivot point, copper will trade sideways to lower. A market that is trading near its year to date moving average is nothing to get excited about. In short, copper is trading within a normal range considering price and time frame.

From the May 12 report:

“On April 24, July copper generated a short-term buy signal, and as of May 13 remains on an intermediate term sell signal. For July copper to generate an intermediate term buy signal, the low the day must be above $3.1670.”

Palladium:

For the week, June palladium advanced $15.25. The COT report revealed that managed money added 163 contracts to their long positions and also added 524 contracts to their short positions. Commercial interests liquidated 501 contracts of their long positions and added 133 contracts to their short positions. As of the latest report, managed money is long palladium by a ratio of 5.14:1, which is down from the previous week of 5.77:1 and the ratio of 2 weeks ago of 6.68:1.

Platinum:

For the week, July platinum advanced $36.20. The COT report revealed that managed money added 1,093 contracts to their long positions and liquidated 506 contracts of their short positions. Commercial interests liquidated 1,409 contracts of their long positions and added 1,215 contracts to their short positions. As of the latest report, managed money is long by a stratospheric 12.48:1, which is up substantially from the previous week of 10.34:1 and almost double the ratio of 2 weeks ago of 6.76:1.

Gold:

For the week, June gold advanced $5.80. The COT report revealed that managed money liquidated 4,824 contracts of their long positions and added 3,361 contracts to their short positions. Commercial interests liquidated 479 contracts of their long positions and added 6,701 contracts to their short positions. As of the latest report, managed money is long gold by ratio of 3.57:1, which is down substantially from the previous week of 4.15:1, but only slightly below the ratio of 2 weeks ago of 3.62:1.

Silver:

For the week, July silver gained 20.8 cents. The COT report revealed that managed money added 71 contracts to their long positions and liquidated 675 contracts of their short positions. Commercial interests added 222 contracts to their long positions and liquidated 730 contracts of their short positions. As of the latest report, managed money is long silver by ratio of 1.14:1, which is up slightly from the previous week of 1.12:1, but down slightly from the ratio of 2 weeks ago of 1.15:1.

Thus far in the 2nd quarter, June palladium is the out performer with a gain of 5.36%, July copper +4.00%, July platinum +3.34%, June gold +0.65%, July silver -2.57%.

Year to date, June palladium is the out performer with a gain of 13.67%, June gold +7.45%, July platinum +6.65%, July silver -0.45%, July copper -6.77%.

Canadian dollar:

For the week, the June Canadian dollar advanced 31 pips. The COT report revealed that leveraged funds liquidated 337 contracts of their long positions and also liquidated 5,596 contracts of their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio of 1.85:1, which is down from the previous week of 2.03:1 and about the same as the ratio of 2 weeks ago of 1.87:1.

Australian dollar:

For the week, the June Australian dollar advanced 15 pips. The COT report revealed that leveraged funds added 6,139 contracts to their long positions and liquidated 4,865 contracts of their short positions. As of the latest report, leveraged funds are long the Australian dollar by ratio of 2.33:1, which is up dramatically from the previous week of 1.69:1 and the ratio of 2 weeks ago of 1.80:1. The current ratio is the highest of 2014 and took out the previous high of 2.17:1 made in the COT report of April 22.

Swiss franc: On May 12, the June Swiss franc generated a short and intermediate term sell signal.

For the week, the June Swiss franc lost 58 pips. The COT report revealed that leveraged funds liquidated 8,094 contracts of their long positions and added 357 contracts to their short positions. As of the latest report, leveraged funds are short the Swiss franc by ratio of 1.21:1, which is down dramatically from the previous week when leveraged funds were long by ratio of 1.26:1 and the ratio of 2 weeks ago when they were long by 1.39:1. This is the first time during 2014 that leveraged funds have been short the Swiss franc.

British pound:

For the week, the June British pound lost 21 pips. The COT report revealed that leveraged funds liquidated 15,157 contracts of their long positions and also liquidated 2,886 contracts of their short positions. As of the latest report, leveraged funds are long the British pound by ratio of 4.80:1, which is down slightly from the previous week of 4.85:1, but up slightly from the ratio of 2 weeks ago of 4.66: 1.

Euro: On May 12th, the June euro generated a short-term sell signal, and generated an intermediate term sell signal on May 14.

For the week, the June euro lost 48 pips. The COT report revealed that leveraged funds liquidated 27,087 contracts of their long positions and added 9,680 contracts to their short positions. As of the latest report, leveraged funds are long the euro by ratio of 1.14:1, which is down dramatically from the previous week of 1.90:1 and the ratio of 2 weeks ago of 1.82:1. The current ratio is the lowest of 2014 and took out the previous low made in the COT report of February 4 when leveraged funds were long the euro by ratio of 1.21:1.

Yen:

For the week, the June yen gained 27 pips. The COT report revealed that leveraged funds liquidated 1,231 contracts of their long positions and added 15 contracts to their short positions. Remarkably, leveraged funds remain short the yen by a ratio of 3.03:1, which is up from the previous week of 2.89:1, but down from the ratio of 2 weeks ago of 3.65:1. Below, see second quarter and year to date stats for the yen.

Dollar index: On May 13, the June dollar index generated a short-term buy signal, but remains on an intermediate term sell signal.

For the week, the June dollar index advanced 14 points. The COT report revealed that leveraged funds liquidated 4,825 contracts of their long positions and also liquidated 5,423 contracts of their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 3.96:1, which is up substantially from the previous week of 2.93:1, but up only slightly from the ratio of 2 weeks ago of 3.66:1.

Thus far in the 2nd quarter, the June Canadian dollar is the out performer with a gain of 1.76%, June yen +1.62%, June Australian dollar +1.32%, June British pound +0.93%, June dollar index -0.17%, June euro -0.56%, June Swiss franc -0.90%.

Year to date, the June Australian dollar is the out performer with a gain of 5.87%, June yen +3.59%, June British pound +1.64%, June dollar index -0.30%, June Swiss franc -0.45%, June euro -0.57%, June Canadian dollar -1.87%.

S&P 500 futures contract (x 250):

For the week, the June S&P 500 futures contract advanced 1.30 points. The COT report revealed that leveraged funds added 2,619 contracts to their long positions and liquidated 842 of their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by ratio of 1.48:1, which is down substantially from the ratio of 2 weeks ago of 2.15:1 and a complete reversal from 2 weeks ago when leveraged funds were long the S&P 500 futures contract by ratio of 1.36:1.

Thus far in the 2nd quarter, the New York Composite Index is the out performer with a gain of 0.72%, S&P 500 cash index +0.29%, Dow Jones Industrial Average cash index +0.20%, NASDAQ 100 cash index -0.24%, S&P 400 cash index -1.88%, Russell 2000 cash index -5.98%.

Year to date, the New York Composite Index is the out performer with a gain of 1.95%, S&P 500 cash index +1.60%, S&P 400 cash index +0.74%, NASDAQ 100 cash index -0.13%, Dow Jones Industrial Average cash index -0.51%, Russell 2000 cash index -5.22%.

10 year Treasury Note: On May 14, the June 10 year Treasury Note generated an intermediate term buy signal after having been on a short-term buy signal.

AAII Index                                                  Recent week                            2 weeks ago                        3 weeks ago
Bullish 33.1% 28.3% 29.8%
Bearish 22.6 28.7 29.5
Neutral 44.3 43.0 40.8