For Bloomberg access:{OIAR<GO>}

The time frame for this week’s Commitments of Traders report is from Wednesday, October 29 through Tuesday, November 4.

The USDA will release its monthly World Agriculture Supply Demand report at 12:00 noon eastern standard time.Do not enter new positions prior to the report and carry positions into the report only of they are profitable and have appropriate stop-loss protection.

Soybeans:

For the week, November soybeans lost 6.25 cents, January 2015 -12.50, March 2015 -13.00. The COT report revealed that managed money liquidated 594 contracts of their long positions and also liquidated 12,057 of their short positions. Commercial interests liquidated 10,878 contracts of their long positions and added 9,376 to their short positions. As of the latest report, managed money is long soybeans by ratio 1.51:1, which is up from the previous week of 1.31:1 and the ratio of 2 weeks ago of 1.37:1. Commercial interests have moved to a net short position of 1.05:1, which is a complete reversal from the previous week when they were long by ratio of 1.03:1 and the ratio of 2 weeks ago of 1.11:1.

Soybean meal:

For the week, December soybean meal advanced $1.40, January 2015 +5.00, March 2015 +8.00. The COT report revealed that managed money added 13,065 contracts to their long positions and liquidated 3,891 contracts of their short positions. Commercial interests liquidated 2,947 of their long positions and added 12,456 contracts to their short positions. As of the latest report, managed money is long soybean meal by a ratio of 4.52:1, which is a major increase from the previous week of 3.16:1 and the ratio of 2 weeks ago of 2.88:1.

The current ratio of 4.52:1, is the highest since the COT report of June 10, 2014 when managed money was long soybean meal by ratio of 4.67:1.

Soybean oil:

For the week, December soybean oil lost 2.40 cents, January 2015 -2.43, March 2015 -2.45. The COT report revealed that managed money added 2,099 contracts to their long positions and liquidated 9,187 of their short positions. Commercial interests added 5,676 contracts to their long positions and also added 21,588 to their short positions. As of the latest report, managed money is long soybean oil by ratio of 1.46:1, which is up from the previous week of 1.19:1 and the ratio of 2 weeks ago of 1.03:1.

Corn:

For the week, December corn lost 9.25 cents, March 2015 -8.75, May 2015-8.50. The COT report revealed that managed money liquidated 957 contracts of their long positions and also liquidated 22,063 of their short positions. Commercial interests added 17,563 contracts to their long positions and also added 34,009 contracts to their short positions. As of the latest report, managed money is long corn by ratio of 2.15:1, which is an increase from the previous week of 1.86:1 and the ratio of 2 weeks ago of 1, 61:1.

Note the increase in this week’s ratio was due to the liquidation of short positions, not the addition of new long positions.

Chicago wheat:

For the week, December Chicago wheat lost 18.00 cents, March 2015 -19.50, May 2015-19.25. The COT report revealed that managed money added 2,253 contracts to their long positions and liquidated 9,536 of their short positions. Commercial interests liquidated 1,281 contracts of their long positions and added 6,465 to their short positions. As of the latest report, managed money is short Chicago wheat by ratio of 1.37:1, which is down from the previous week of 1.52:1 and the ratio of 2 weeks ago of 1.62:1.

The current short ratio of 1.37:1 is the lowest since the COT report of June 17, 2014 when managed money was short Chicago wheat by ratio 1.21:1.The trading range encompassed by the June 17 report (June 11-June 17) was 6.08-6.44 for the December contract. In short, managed money is getting less bearish even though Chicago wheat is trading considerably below the trading range encompassed by the June 17 report.

Kansas City wheat: On November 7, December Kansas City wheat generated a short-term sell signal, and remains on an intermediate term sell signal.

For the week, December Kansas City wheat lost 24.50 cents, March 2015 -25.00, May 2015-23.75. The COT report revealed that managed money liquidated 1,155 contracts of their long positions and also liquidated 1,903 of their short positions. Commercial interests added 1,845 contracts to their long positions and also added 470 contracts to their short positions. As of the latest report, managed money is long Kansas City wheat by ratio 1.65:1, which is up from the previous week of 1.57:1 and the ratio of 2 weeks ago of 1.57:1.

Thus far in the 4th quarter, December soybean meal is the out performer with a gain of 30.61%, December corn +14.58%, January soybeans +12.54%, December Chicago wheat +7.69%, December Kansas City wheat +2.02%, December soybean oil +0.09%.

Year to date, December soybean meal is the out performer with a gain of 11.61%, January soybeans – 9.10%, December Kansas City wheat -14.94%, December corn -18.38%, December soybean oil -19.14%, December Chicago wheat -19.67%.

Cotton:

For the week, December cotton lost 49 points, March 2015 -31, May 2015 -23. The COT report revealed that managed money added 1,951 contracts to their long positions and liquidated 1,452 of their short positions. Commercial interests liquidated 4,645 contracts of their long positions and added 2,407 to their short positions. As of the latest report, managed money is long cotton by ratio of 1.54:1, which is up from the previous week of 1.41:1 and the ratio of 2 weeks ago of 1.23:1.

Sugar #11:

For the week, March 2015 sugar lost 35 points, May 2015-27, July 2015 -28. The COT report revealed that managed money added 943 contracts to their long positions and also added 6,659 to their short positions. Commercial interests added 27,578 contracts to their long positions and also added 15,590 to their short positions. As of the latest report, managed money is short sugar by ratio 1.37:1, which is an increase from the previous week of 1.33:1 and the ratio of 2 weeks ago of 1.28:1.

The current ratio of 1.37:1 is the highest short ratio since the beginning of the current bear market that began in late June 2014.

During the past week, March, May and July 2015 sugar made new contract lows of 15.42, 15.84, 16.17 respectively.

Coffee: On November 5, December 2014 and March 2015 coffee generated an intermediate term sell signal after generating short-term sell signals on October 23.

For the week, December coffee lost 5.60 cents, March 2015 -5.55, May 2015-5.55. The COT report revealed that managed money liquidated 2,715 contracts of their long positions and added 693 to their short positions. Commercial interests liquidated 3,251 of their long positions and also liquidated 6,645 of their short positions. As of the latest report, managed money is long coffee by ratio of 6.73:1, which is down from the previous week of 8.03:1 and down dramatically from the ratio of 2 weeks ago of 9.53:1.

The current ratio of 6.73:1 is the lowest since the COT tabulation date of September 30 when managed money was long coffee by ratio of 6.66:1.The trading range encompassed by the September 30 report was 1.7945-1.9730.

Coffee is in a critical stage, and this week’s action is likely to determine how much lower coffee goes before liquidation runs its course. Remarkably, the moving averages remain in a bullish set up with the 20 day moving average standing at 1.9668, 50 day, 1.9619, 100 day 1.8958, and the 200 day moving average of 1.8694. This week, if December coffee makes a daily high below OIA’s weekly pivot point for the week of November 10 of 1.8290, coffee is likely to take out the September 19 and 22 lows of 1.7640. 

Cocoa:

For the week, December cocoa lost $10.00, March 2015 -10.00, May 2015-4.00. The COT report revealed that managed money liquidated 5,510 contracts of their long positions and also liquidated 3,286 of their short positions. Commercial interests liquidated 633 contracts of their long positions and also liquidated 5,269 of their short positions. As of the latest report, managed money is long cocoa by ratio of 3.7:1, which is up from the previous week of 3.37:1 and the ratio of 2 weeks ago of 3.56:1.

Thus far in the 4th quarter, December cotton is the out performer with a gain of 4.22%, March 2015 sugar -4.62%, December coffee -5.66%, December cocoa -12.45%.

Year to date, December coffee is the out performer with a gain of 51.87%, December cocoa + 6.53%, March 2015 sugar -11.61%, December cotton -18.45%.

Live cattle:

For the week, December live cattle advanced 75 points, February 2015 +2.27 cents, April 2015 +1.55. The COT report revealed that managed money liquidated 1,438 contracts of their long positions and added 522 to their short positions. Commercial interests liquidated 1,808 contracts of their long positions and also liquidated 5,531 of their short positions. As of the latest report, managed money remains long live cattle by ratio of 10.87:1, which is down from the previous week of 11.56:1 and the ratio of 2 weeks ago of 11.23:1.

Lean hogs:

For the week, December lean hogs advanced 75 points, February 2015 +37, April 2015 + 95. The COT report revealed that managed money added 288 contracts to their long positions and also added 3,104 to their short positions. Commercial interests liquidated 201 contracts of their long positions and also liquidated 4,436 of their short positions. As of the latest report, managed money remains long lean hogs by ratio of 3.67:1, which is down from the previous week of 4.44:1 and the ratio of 2 weeks ago of 5.28:1.

Thus far in the 4th quarter, February live cattle is the out performer with a gain of 2.95%, December live cattle +2.14%, February 2015 lean hogs -2.45%, December lean hogs -6.26%.

Year-to-date, February live cattle is the out performer with a gain of 27.46%, December live cattle +26.53%, December lean hogs +11.67%, February lean hogs +9.78%.

WTI crude oil:

For the week, December WTI crude oil lost $1.89, January 2015 -1.82, February 2015-1.82. The COT report revealed that managed money liquidated 3,015 contracts of their long positions and added 10,048 to their short positions. Commercial interests liquidated 3,781 contracts of their long positions and also liquidated 613 of their short positions. As of the latest report, managed money remains long WTI crude oil by ratio of 3.54:1, which is down from the previous week of 4.13:1 and the ratio of 2 weeks ago of 4.20:1.

During the past week, December, January 2015 and February 2015 WTI crude oil made new contract lows of 75.84, 75.95, and 76.05 respectively.

Heating oil:

For the week, December heating oil lost 1.14 cents, January 2015 -1.81, February 2015-2.65. The COT report revealed that managed money added 2,137 contracts to their long positions and liquidated 3,483 of their short positions. Commercial interests added 1,440 contracts to their long positions and also added 3,588 to their short positions. As of the latest report, managed money is short heating oil by ratio of 1.7:1, which is down from the previous week of 1.92:1 and the ratio of 2 weeks ago of 1.80:1.

We have not written about heating oil in quite a while, and are writing now because it appears that heating oil prices may have made a major low on November 5 of 2.4138. This was a test of the October 16 low of 2.4159.  The November 5 low on the heating oil continuation chart is the lowest print since December 2010.

From October 16 through November 7, heating oil has been outperforming WTI crude oil and gasoline.During this time, December heating oil advanced 1.26% versus December WTI crude oil which lost 4.06% and December gasoline, which lost 0.70%. From October 16 through November 6, total open interest increased by 11,808 contracts. This is bullish open interest action relative to the price advance, especially during a period in which petroleum prices in general have been declining.

Although December heating oil remains on a short and intermediate term sell signal, it would generate a short-term buy signal if the low the day was above OIA’s key pivot point for November 7 of $2.5021.On Friday, December heating oil closed at 2.4995, up 4.08 cents. Preliminary exchange stats show that total open interest increased by 4,833 on volume of 193,457 contracts. Preliminary open interest stats are subject to change once the final report is published on Monday.From a seasonal point of view, heating oil tends to top out during September and October and then decline into winter. However, at this juncture the market has already collapsed to such an extent we think the downside has been played out for now.

Managed money has a major short position in heating oil , and if a rally is to ensue, managed money will provide additional fuel for the upside. Additionally, low heating oil prices will encourage consumption as weather grows colder and natural gas prices ratchet higher.

A conservative way to trade heating oil is through a futures spread: buying December 2014 and selling April 2015 for example. On September 23, the spread made a low of 91 points premium to April 2015, and has rallied dramatically ever since and made a high of 4.63 cents premium to December 2014 on November 7. On Friday, the premium expanded by 94 points (almost one cent). The recent low in the spread occurred on November 5 and closed at 2.61 cents premium to December 2014 as the December contract made its major low of 2.4138.This could be used as an exit point for the spread. However, before initiating the spread we recommend waiting for a short-term buy signal.

From the November 4 report from the Energy Information Administration:

Distillate fuel inventories decreased by 0.7 million barrels last week and are near the lower limit of the average range for this time of year.

Gasoline:

For the week, December gasoline lost 1.26 cents, January 2015 -2.55, February 2015 -3.26. The COT report revealed that managed money liquidated 432 contracts of their long positions and also liquidated 309 of their short positions. Commercial interests liquidated 841 contracts of their long positions and also liquidated 411 of their short positions. As of the latest report, managed money is long gasoline by ratio of 1.84:1, which is the same as the previous week (1.84:1), and slightly below the ratio of 2 weeks ago of 1.86:1.

During the past week, December, January 2015 and February 2015 gasoline made new contract lows of 2.0484, 2.0453, and 2.0584 respectively.

Natural gas: On November 3, December natural gas generated a short-term buy signal and an intermediate term buy signal on November 5.

For the week, December natural gas advanced 53.9 cents, January 2015 +54.8, February 2015 +50.7. The COT report revealed that managed money added 8,590 contracts to their long positions and liquidated 16,217 of their short positions. Commercial interests added 12,869 contracts to their long positions and also added 21,304 to their short positions. As of the latest report, managed money remains short natural gas by ratio 1.01:1, which is down from the previous week’s high of 1.13:1 and below the ratio of 2 weeks ago of 1.06:1.

When the COT report was tabulated on November 4, December natural gas made a high of 4.179 and closed at 4.129. Apparently, there were a significant number of participants who did not believe the rally was for real and continued to hold a large short position as of November 4. The decline in the short ratio was more the function of a reduced short position rather than the addition of new long positions.

For natural gas to continue its rally, it must make a weekly low above OIA’s key pivot point of $4.425. Keep in mind this for the entire week of November 10.

Thus far in the 4th quarter, December ethanol is the out performer with a gain of 20.63%, December natural gas +4.39%, December heating oil -6.43%, December gasoline -11.08%, December Brent crude oil -13.09%, December WTI crude oil -13.42%.

Year to date, December ethanol is the out performer with a gain of 16.38%, December natural gas +1.53%, December WTI crude oil -15.37%, December heating oil -16.50%, December gasoline -18.00%, December Brent crude oil -21.93%.

Copper: On November 5, December copper generated a short-term sell signal and remains on an intermediate term sell signal.

For the week, December copper lost 85 points. The COT report revealed that managed money liquidated 5,588 contracts of their long positions and also liquidated 896 of their short positions. Commercial interests added 2,686 contracts to their long positions and also added 407 contracts to their short positions. As of the latest report, managed money is short copper by ratio of 1.18:1, which is up from the previous week of 1.03:1 but down from the ratio of 2 weeks ago of 1.34:1.

Palladium:

For the week, December palladium lost $19.25. The COT report revealed that managed money added 286 contracts to their long positions and liquidated 1,163 contracts of their short positions. Commercial interests added 27 contracts to their long positions and also added 741 to their short positions. As of the latest report, managed money is long palladium by ratio of 11.89:1, which is up dramatically from the previous week of 6.84:1 and the ratio of 2 weeks ago of 6.63:1.

The recent for the large increase in the net long position of managed money was due to the massive liquidation of short positions.

Platinum:

For the week, January platinum lost $22.40. The COT report revealed that managed money added 706 contracts to their long positions and liquidated 108 of their short positions. Commercial interests liquidated 101 contracts of their long positions and also liquidated 856 of their short positions. As of the latest report, managed money is long platinum by ratio of 1.90:1, which is up slightly from the previous week of 1.83:1, but down from the ratio of 2 weeks ago of 1.98:1.

Gold:

For the week, December gold lost $1.80. The COT report revealed that managed money liquidated 15,096 contracts of their long positions and added 6,166 to their short positions. Commercial interests added 1,045 contracts to their long positions and liquidated 10,980 of their short positions. As of the latest report, managed money is long gold by ratio of 1.52:1, which is down from the previous week of 1.88:1 and the ratio of 2 weeks ago of 1.89:1.

On Friday November 7, December gold made a new contract low of 1133.00.

We would not be surprised if many commodity traders did not know that on November 7, December gold was down only $35.60 year to date. The real carnage in gold occurred during 2013 when gold lost $470.20 and had a trading range from high to low of 518.40.During 2012, gold on the continuation chart made a high of 1794.80 and a low of 1526.70, or a range of 268.10. During 2014, the range traded through November 7 has been from a high of 1392.60 to a low of 1133.00 or $259.60.

We are discussing gold this week because we think there is a high likelihood that a capitulation type low may have occurred on Friday. We encourage you to pull up a 60 minute chart for trading during the Thursday evening session through Friday’s close. December gold made its contract low of 1133.00 during the evening session on Thursday, and from approximately midnight began to rally and continued its advance through the remaining early morning hours and for the rest of the day session.From 7:00 a.m. Eastern standard time on Friday through the end of the session, December gold closed higher in each subsequent 60 minute interval on very strong volume.

Preliminary stats from the exchange show that 328,098 contracts were traded, and total open interest increased by a massive 19,548 contracts. This is approximately 140% above average, which clearly indicates new longs were heavily entering the market at an aggressive pace to drive prices from contract lows to close $27.20 higher on the day.Preliminary stats for open interest are subject to change and can often change dramatically from the preliminary report to the final report, but there is no doubt aggressive new buying was occurring on Friday.

From a seasonal point of view, gold is entering a strong period if one looks at the seasonal trend over period of 20 to 30 years. However, this has not been the case during the past 2 years. For example, during 2012, the gold made a high of 1755.00 in November and fell to 1635.80 during December 2012 and closed at 1675.80. During 2013, gold made a high at 1327.30 in November and by December had fallen to 1181.40 and closed at 1202.30.

Because December gold remains on a short and intermediate term sell signal, we are not advocating bullish positions at this juncture. However, this is a market that bears watching, especially since sentiment is extremely bearish.

Silver:

For the week, December silver lost 39.2 cents. The COT report revealed that managed money added 2,361 contracts to their long positions and liquidated 1,894 of their short positions. Commercial interests liquidated 1,112 contracts of their long positions and added 30 to their short positions. As of the latest report, managed money is short silver by ratio of 1.03:1, which is down sharply from the previous week of 1.14:1 and the ratio of 2 weeks ago of 1.12:1.

On Friday November 7, December silver made a new contract low of 15.045.

Thus far in the 4th quarter, December copper is the out performer with a gain of 0.78%, December palladium -0.006%, December gold -2.71%, January platinum -6.40%, December silver -7.44%.

Year to date, December palladium is the out performer with a gain of 7.17%, December gold -2.47%, December copper -9.61%, January platinum – 11.67%, December silver -19.36%.

Canadian dollar:

For the week, the December Canadian dollar lost 42 pips. The COT report revealed that leveraged funds added 471 contracts to their long positions and also added 4,023 to their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio 4.17:1, which is up from the previous week of 3.99:1 and the ratio of 2 weeks ago of 3.26:1.

During the past week, the December Canadian dollar made a new contract low of 87.12.

Australian dollar:

For the week, the December Australian dollar lost 1.54 cents. The COT report revealed that leveraged funds liquidated 2,481 contracts of their long positions and added 396 to their short positions. As of the latest report, leveraged funds are short the Australian dollar by ratio of 1.46:1, which is up from the previous week of 1.32:1 and about the same as the ratio of 2 weeks ago of 1.45:1.

During the past week, the December Australian dollar made a new contract low of 85.20.

Swiss franc:

For the week, the December Swiss franc lost 50 pips. The COT report revealed that leveraged funds added 1,319 contracts to their long positions and also added 899 to their short positions. As of the latest report, leveraged funds are short the Swiss franc by ratio of 3.14:1, which is down from the previous week of 3.57:1, but up from a ratio of 2 weeks ago of 3.03:1.

During the past week, the December Swiss franc made a new contract low of 1.0268.

British pound:

For the week, the December British pound lost 1.25 cents. The COT report revealed that leveraged funds added 2,550 contracts to their long positions and also added 4,698 to their short positions. As of the latest report, leveraged funds are long the British pound by ratio 1.60:1, which is down from the previous week of 1.78:1 and the ratio of 2 weeks ago of 2.07:1.

Euro:

For the week, the December euro lost 86 pips. The COT report revealed that leveraged funds added 817 contracts to their long positions and also added 8,237 to their short positions. As of the latest report, leveraged funds are short the euro by ratio of 3.49:1, which is up from the previous week of 3.39:1 and the ratio of 2 weeks ago of 3.12:1.

During the past week, the December euro made a new contract low of 1.2361.

Yen:

For the week, the December yen lost 175 pips. The COT report revealed that leveraged funds added 5,012 contracts to their long positions and also added 16,537 to their short positions. As of the latest report, leveraged funds are short the yen by ratio 2.74:1, which is up from the previous week of 2.64:1, but down from the ratio of 2 weeks ago of 2.87:1.

During the past week, the December yen made a new contract low of .8652.

Dollar index:

For the week, the December dollar index gained 71 points. The COT report revealed that leveraged funds added 314 contracts to their long positions and also added 13,867 to their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 1.22:1, which is a complete reversal from the previous week when they were long by ratio of 1.42:1. Two weeks ago leveraged funds were long the dollar index by ratio of 1.38:1.

During the past week, the December dollar index made a new contract high of 88.31.

Thus far in the 4th quarter, the December dollar index is the out performer with a gain of 1.86%, December Australian dollar -0.94%, December Canadian dollar -1.01%, December Swiss franc -1.31%, December euro -1.51%, December British pound -2.04%, December yen -4.29%.

Year to date, the December dollar index is the out performer with a gain of 8.64%, December Australian dollar -1.25%, December British pound -3.96%, December Canadian dollar -5.51%, December yen -8.33%, December Swiss franc -8.41%, December euro -9.80%.

S&P 500 (250 x): 

For the week, the December S&P 500 futures contract advanced 14.60 points. The COT report revealed that leveraged funds liquidated 991 contracts of their long positions and also liquidated 876 of their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by ratio of 1.36:1, which is up slightly from the previous week of 1.31:1 and the ratio of 2 weeks ago of 1.27:1.

During the past week, the S&P 500 futures contract made a new contract high of 2033.10, which is a new all-time high.

Thus far in the 4th quarter, the Russell 2000 cash index is the out performer with a gain of 6.50%, S&P 400 cash index +4.31%, Dow Jones Industrial Average cash index +3.12%, S&P 500 cash index +3.02%, NASDAQ 100 cash index +2.74%, New York Composite cash index +1.51%.

Year to date, the NASDAQ 100 cash index is the out performer with a gain of 15.83%, S&P 500 cash index +9.93%, S&P 400 cash index +6.52%, Dow Jones Industrial Average cash index +6.02%, New York Composite cash index + 4.46%, Russell 2000 cash index +0.83%.