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The time frame for this week’s Commitments of Traders report is from Wednesday, September 10 through Tuesday, September 16.

From the September 14 Weekend Wrap: 

“Last week, the Greenhaven Continuous Commodity Index took out the previous week’s low of 25.32 with another new low of 25.23. The deflationary cycle in the commodity complex has become well entrenched, and we expect the 52-week low of 25.09 made on November 19, 2013 to be taken out shortly.”

It didn’t take long for the Greenhaven Continuous Commodity Index to take out the November 19, 2013 low of 25.09 with another new low of 24.90, which is the lowest print for the index since the week of July 19, 2010 when the economy was recovering from the crash of 2008 -2009. Support on the weekly chart comes in at $23.80-23.90, the lows during May 2010.

Soybeans:

For the week, November soybeans lost 28.25 cents, January 2015 -27.25, March 2015 -25.75. The COT report revealed that managed money added 9,263 contracts to their long positions and liquidated 3,345 contracts of their short positions. Commercial interests added 22,327 contracts to their long positions and also added 1,516 contracts to their short positions. As of the latest report, managed money is long soybeans by ratio 1.24:1, which is up from the previous week of 1.10:1 and the same as 2 weeks ago of 1.24:1. Commercial interests are long soybeans by ratio of 1.25:1, which is up from the previous week of 1.16:1 and the ratio of 2 weeks ago of 1.11:1.

During the past week, November, January 2015 and March 2015 soybeans made new contract lows of 9.56, 9.64 1/4 and 9.71 1/2 respectively

Soybean meal:

For the week, October soybean meal lost $14.40, January 2015 -12.50, March 2015 -11.80. The COT report revealed that managed money liquidated 1,873 contracts of their long positions and added 4,826 to their short positions. Commercial interests added 5,623 contracts to their long positions and liquidated 6,994 of their short positions. As of the latest report, managed money is long soybean meal by ratio of 2.17:1, which is down from the previous week of 2.68:1 and the ratio of 2 weeks ago of 3.19:1.

This week’s ratio of 2.17:1 is the lowest of the current bear market.

During the past week, October, December and January 2015 soybean meal made new contract lows of 323.00, 315.00, 312.40 respectively.

Soybean oil:

For the week, October soybean oil lost 9 points, December -19, January 2015 -20. The COT report revealed that managed money added 2,168 contracts to their long positions and liquidated 4,980 of their short positions. Commercial interests liquidated 7,813 contracts of their long positions and liquidated 1,280 of their short positions. As of the latest report, managed money is short soybean oil by ratio 1.20:1, which is down from the previous week of 1.32:1 and the ratio of 2 weeks ago of 1.27:1.

Corn:

For the week, December corn lost 7.00 cents, March 2015 -6.75, May 2015-6.50. The COT report revealed that managed money added 5,354 contracts to their long positions and liquidated 2,301 contracts of their short positions. Commercial interests liquidated 1,137 contracts of their long positions and added 11,654 to their short positions. As of the latest report, managed money remains long corn by ratio of 1.36:1, which is up slightly from the previous week of 1.32:1 and the ratio of 2 weeks ago of 1.34:1.

During the past week, December, March 2015 and May 2015 corn made new contract lows of 3.31 1/2, 3.44, and 3.52 3/4 respectively

Chicago wheat:

For the week, December Chicago wheat lost 28.00 cents, March 2015 -29.00, May 2015-28.25. The COT report revealed that managed money added 1,123 contracts to their long positions and also added 3,472 to their short positions. Commercial interests added 1,176 contracts to their long positions and liquidated 2,083 of their short positions.As of the latest report, managed money remains short Chicago wheat by ratio of 1.80:1, which is up slightly from the previous week of 1.78:1 and the ratio of 2 weeks ago of 1.68:1.

During the past week, December, March 2015 and May 2015 Chicago wheat contracts made new contract lows of 4.73 3/4, 4.90 1/4, and 5.02 1/2 respectively.

Kansas City wheat:

For the week, December Kansas City wheat lost 33.00 cents, March 2015 -35.25, May 2015-36.50. The COT report revealed that managed money liquidated 1,616 contracts of their long positions and added 3,691 contracts to their short positions. Commercial interests added 5,710 contracts to their long positions and also added 1,433 to their short positions. As of the latest report, managed money is long Kansas City wheat by ratio of 1.26:1, which is down from the previous week of 1.51:1 and the ratio of 2 weeks ago of 1.59:1.

This week’s ratio of 1.26:1 is the lowest since the beginning of the current bear market.

During the past week, December March 2015 in May 2015 Kansas City wheat made new contract lows of 5.57 1/2, 5.64 1/4 and 5.67 1/2 respectively

Thus far in the 3rd quarter, December soybean meal is the out performer with a loss of 14.15%, December soybean oil -16.78 %, November soybeans -17.30%, December Chicago wheat -20.69%, December Kansas City wheat -20.70%, December corn -22.05%.

Year to date, December soybean meal is the out performer with a loss of 9.83%, November soybeans -15.60%, December Kansas City wheat -16.29%, December soybean oil -18.69%, December wheat -25.92%, December corn -26.37%.

Cotton:

For the week, December cotton lost 3.61 cents, March 2015 – 3.14, May 2015 -2.73. The COT report revealed that managed money liquidated 366 contracts of their long positions and also liquidated 2,975 their short positions. Commercial interests added 834 contracts to their long positions and also added 4,733 to their short positions. As of the latest report, managed money remains long cotton by ratio of 1.33:1, which is up from the previous week of 1.22:1, but a complete reversal from the ratio of 2 weeks ago when managed money was short cotton by ratio 1.002:1.

Sugar #11:

For the week, October sugar lost 28 points, March 2015 -52, May 2015 -59. The COT report revealed that managed money liquidated 25,673 contracts of their long positions and also liquidated 14,486 of their short positions. Commercial interests liquidated 8,815 contracts of their long positions and also liquidated 34,488 of their short positions. As of the latest report, managed money is short sugar by ratio of 1.16:1, which is up from the previous week of 1.08:1 and the ratio of 2 weeks ago of 1.05:1.

The current ratio of 1.16:1 is the highest since the beginning of the bear market in sugar.

During the past week, October, March 2015 in May 2015 sugar made new contract lows of 13.32, 15.77, and 16.21 respectively.

Coffee:

For the week, December coffee lost 6.55 cents, March 2015 -6.40, May 2015-6.35. The COT report revealed that managed money liquidated 5,439 contracts of their long positions and added 1,646 to their short positions. Commercial interests added 3,243 contracts to their long positions and liquidated 3,220 of their short positions. As of the latest report, managed money is long coffee by ratio of 5.01:1, which is down substantially from the previous week of 6.84:1 and the ratio of 2 weeks ago of 8.34:1.

The current ratio of 5.01:1 is the lowest since the COT reporting date of July 22 when managed money was long coffee by ratio of 4.64:1.

Cocoa: On September 18, December Cocoa generated an intermediate term buy signal, and generated a short-term buy signal on September 19.

For the week, December cocoa advanced $206.00, March 2015 + 175.00, May 2015+155.00. The COT report revealed that managed money liquidated 10,002 contracts of their long positions and also liquidated 2,904 contracts of their short positions. Commercial interests liquidated 223 contracts of their long positions and also liquidated 5,267 contracts of their short positions. As of the latest report, managed money is long cocoa by ratio 4.15:1, which is up from the previous week of 4.07:1 and the ratio of 2 weeks ago of 3.93:1.

Cocoa had an amazing week, and the impetus for the move higher for was the ongoing threat of the Ebola virus, which is increasingly becoming a scourge in the cocoa growing regions of West Africa, primarily Ghana and the Ivory Coast. The spread of the virus and the impact on the workforce of cocoa exporting countries could put a large dent in cocoa exports for quite a while. Late last week, December cocoa generated a short and intermediate term buy signal, and usually after this, a pullback occurs, which lasts from 1-3 days, and this is the opportunity to initiate bullish positions, which we strongly recommend.

It is important to note that the current ratio of managed money longs is actually quite low when comparing it to ratios earlier this year.For example, the COT report of February 25, 2014 showed that managed money was long cocoa by a ratio of 7.07:1. The trading range encompassed by the February 25 report was 2,891-2,986, or approximately 300 dollars lower than Friday’s close.

On the tabulation date of September 16, December cocoa closed at 3,070, or approximately 100-200 dollars above the range traded during the tabulation period of the February 25 report. The COT tabulation date of January 28, 2014 showed that managed money was long by 7.94:1, almost double the current ratio. The trading range encompassed by the report was 2,675-2,902, or approximately 100- 300 dollars below the closing price on September 16.In the current COT report, the increase in the ratio was result of shorts liquidating, which offset the massive decline in long positions. As it stands now, there is plenty of potential firepower to send cocoa prices considerably higher from here.

Thus far in the 3rd quarter, December cocoa is the out performer with a gain of 4.29%, December coffee -0.39%, December cotton -12.41%, October sugar -25.04%.

Year to date, December coffee is the out performer with a gain of 48.21%, December cocoa +20.17%, December cotton -17.90%, October sugar -20.82%.

Live cattle:

For the week, October live cattle lost 65 points, December -55, February 2015 +68. The COT report revealed that managed money added 8,838 contracts to their long positions and also added 492 to their short positions. Commercial interests added 2,769 contracts to of their long positions and also added 2,071 to their short positions. As of the latest report, managed money is long live cattle by ratio of 10.85:1, which is up from the previous week of 10.53:1 and dramatically above the ratio of 2 weeks ago of 7.88:1.

Lean hogs:  On September 17, December lean hogs generated an intermediate term sell signal, but remains on a short-term buy signal.

For the week, October lean hogs advanced 27 points, December -1.45 cents, February 2015 -2.15. The COT report revealed that managed money added 4,017 contracts to their long positions and liquidated 1,703 contracts of their short positions. Commercial interests added 369 contracts to their long positions and also added 3,670 to their short positions. As of the latest report, managed money is long lean hogs by ratio of 6.31:1, which is up from the previous week of 5.09:1, and the ratio of 2 weeks ago of 4.25:1.

Thus far in the 3rd quarter, December live cattle is the out performer with a gain of 3.02%, October live cattle +1.40%, December lean hogs -3.80%, October lean hogs -6.96%.

Year to date, October lean hogs is the out performer with a gain of 26.54%, December live cattle +20.39%, December lean hogs +19.31%, October live cattle +18.71%.

WTI crude oil:

For the week, October WTI crude oil advanced 14 cents, November +28, December + 37. The COT report revealed that managed money added 6,878 contracts to their long positions and liquidated 3,710 of their short positions. Commercial interests liquidated 15,706 contracts of their long positions and also liquidated 18,075 their short positions. As of the latest report, managed money is long WTI crude oil by ratio of 4.05:1, which is up from the previous week of 3.75:1 and the ratio of 2 weeks ago of 3.39:1.

Despite lower prices during the past couple of weeks, managed money has become less bearish as prices have declined.

Heating oil:

For the week, October heating oil lost 2.39 cents, November -2.52, December -2.57. The COT report revealed that managed money added 533 contracts to their long positions and also added 1,720 to their short positions. Commercial interests added 4,066 contracts to their long positions and also added 1,177 to their short positions. As of the latest report, managed money is short heating oil by ratio of 1.71:1, which is up slightly from the previous week of 1.68:1 and the ratio of 2 weeks ago of 1.50:1.

Gasoline:

For the week, October gasoline advanced 9.26 cents, November +5.39, December +3.83. The COT report revealed that managed money liquidated 3,021 contracts of their long positions and added 5,938 to their short positions. Commercial interests added 3,442 contracts to their long positions and liquidated 2,852 of their short positions. As of the latest report, managed money is long gasoline by ratio of 1.21:1, which is down significantly from the previous week of 1.52:1 and the ratio of 2 weeks ago of 1.53:1.

The current ratio of 1.21:1 is the lowest according to our records going back to September 3, 2013 and the previous lowest ratio we could find during the past year occurred on November 5, 2013 when managed money was long gasoline by ratio of 2.88:1. We examined the records of COT reports when prices were trading at the low-end of the trading range in late October 2012 and June 2012, and found that managed money was net long at the bottom of those moves: $2.4785 ( COT June 26, 2012) and 2.5661 (COT October 30, 2012).

Managed money is extremely bearish on gasoline, and gasoline made its low this week on September 15, and touched the lowest level going back to late 2011.However, from September 15 through September 19, November gasoline has advanced 1.51% while the October contract gained 2.61%. November WTI lost 0.16% in the same time frame. Very importantly, the term structure gasoline is inverted, which is bullish.

We find it fascinating that managed money is massively bearish on gasoline even though gasoline has outperformed WTI thus far in the 3rd quarter and is only trailing WTI slightly on the year to date basis.We think the short side of gasoline has been played out, and that it may make a counter seasonal move higher.For November gasoline to generate a short-term buy signal, the low the day must be above OIA’s key pivot point for September 19 of $2.5595. November gasoline remains on a short and intermediate term sell signal. Stand aside.

Natural gas: On September 17, October natural gas generated a short-term buy signal, but remains on an intermediate term sell signal.

October natural gas lost 2.00 cents, November – 7 ticks, December + 1 tick. The COT report revealed that managed money liquidated 7,690 of their long positions and also liquidated 2,289 of their short positions. Commercial interests added 12,258 contracts to their long positions and also added 12,876 to their short positions. As of the latest report, managed money is long natural gas by ratio of 1.04:1, which is down slightly from the previous week of 1.06:1 and the ratio of 2 weeks ago of 1.07:1.Commercial interests are long natural gas by ratio of 1.02:1, which is down slightly from the previous week of 1.03:1 and the ratio of 2 weeks ago of 1.03:1.

Thus far in the 3rd quarter, October gasoline is the out performer with a loss of 8.31%, October heating oil -9.33%, October WTI crude oil -11.05%, October Brent crude oil -11.65%, October natural gas -13.49%, October ethanol -14.06%.

Year to date, October WTI crude oil is the out performer with a loss of 1.65%, October gasoline -2.05%, October ethanol -2.60%, October natural gas -7.71%, November rent crude oil -7.94%, October heating oil -9.48%.

Copper:

For the week, December copper lost 1.50 cents. The COT report revealed that managed money added 3,443 contracts to their long positions and also added 586 to their short positions. Commercial interests liquidated 425 contracts of their long positions and also liquidated 4,466 of their short positions. As of the latest report, managed money is long copper by ratio of 1.02:1, which is a complete reversal from the previous week when managed money was short by ratio of 1.07:1. Two weeks ago, managed money was long copper by ratio of 1.27:1.

Managed money has been whipsawed by the action in copper. However, clients of OIA have avoided the long side ever since copper generated a short-term sell signal on August 6 and an intermediate term sell signal on September 10

Palladium:

For the week, December palladium lost $23.45. The COT report revealed that managed money liquidated 991 contracts of their long positions and also liquidated 621 of their short positions. Commercial interests liquidated 228 contracts of their long positions and also liquidated 1,046 of their short positions. As of the latest report, managed money is long palladium by ratio of 16.35:1, which is up substantially from the previous week of 12.33:1 and the ratio of 2 weeks ago of 11.94:1.

The ratio for palladium increased due to the liquidation of short positions which represents a large percentage of outstanding short positions.

Platinum:

For the week, October platinum lost $33.20. The COT report revealed that managed money liquidated 3,601 contracts of their long positions and added 1,107 contracts to their short positions. Commercial interests liquidated 135 contracts of their long positions and also liquidated 1,416 of their short positions. As of the latest report, managed money is long platinum by ratio of 3.26:1, which is down from the previous week of 4.07:1 and the ratio of 2 weeks ago of 5.15:1.

Gold:

For the week, December gold lost $14.90. The COT report revealed that managed money liquidated 5,049 contracts of their long positions and added 14,863 to their short positions. Commercial interests liquidated 107 contracts of their long positions and also liquidated 5,873 of their short positions. As of the latest report, managed money is long gold by ratio of 1.55:1, which is down from the previous week of 2.03:1 and the ratio of 2 weeks ago of 2.18:1.

The current ratio of 1.55:1 is the lowest since the COT tabulation date of June 10, 2014 when managed money was long gold by ratio of 1.52:1.

Silver:

For the week, December silver lost 76.2 cents. The COT report revealed that managed money liquidated 757 contracts of their long positions and added 5,168 to their short positions. Commercial interests added 3,905 contracts to their long positions and also added 146 to their short positions. As of the latest report, managed money is now short silver by ratio of 1.04:1, which is a complete reversal from the previous week when managed money was long by ratio of 1.11:1 and the ratio of 2 weeks ago when they were long by ratio of 1.21:1.

The current short ratio of managed money (1.04:1) is the highest since June 10 when managed money was short silver by ratio of 1.11:1. 

During the past week, December silver made a new contract low of 17.780.

Thus far in the 3rd quarter, December copper is the out performer with a loss of 3.51%, December palladium -3.69%,December gold -8.42%, October platinum -10.24%, December silver -15.68%.

Year to date, December palladium is the out performer with a gain of 12.47%, December gold +0.95%, October platinum -3.05%, December copper -8.01%, December silver -8.75%.

Canadian dollar:

For the week, the December Canadian dollar advanced 1.11 cents. The COT report revealed that leveraged funds added 4,331 contracts to their long positions and also added 7,253 to their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio of 1.14:1, which is up from the previous week of 1.02:1, but down from the ratio of 2 weeks ago when leveraged funds were short by ratio of 1.19:1.

Australian dollar:

For the week, the December Australian dollar lost 1.05 cents. The COT report revealed that leveraged funds liquidated 18,089 contracts of their long positions and also liquidated 4,117 contracts of their short positions. As of the latest report, leveraged funds remain long the Australian dollar by ratio of 2.65:1, which is down from the previous week of 2.93:1 and 3.54:1, the recent high ratio.

From the September 14 Weekend Wrap:

“The collapse in the Australian dollar began last week, and despite the sharp move lower on Monday and Tuesday (Tuesday is the COT tabulation date) totaling 1.79 cents, managed money remained long the Australian dollar by a hefty amount according to the report. On September 10 and 11, open interest increased each day on the declines of Wednesday and Thursday.This is bearish. In short, speculative longs are not liquidating.This means that rallies will be muted and the inexorable pressure of selling by distressed longs will weigh on the market. The Australian dollar remains on a short and intermediate term sell signal.”

Swiss franc:

For the week, the December Swiss franc lost 77 pips. The COT report revealed that leveraged funds added 1,885 contracts to their long positions and also added 16 contracts to their short positions. As of the latest report, leveraged funds are short the Swiss franc by ratio of 1.72:1, which is down from the previous week of 1.99:1 and the ratio of 2 weeks ago of 2.02:1.

British pound:

For the week, the December British pound advanced 56 pips. The COT report revealed that leveraged funds liquidated 30,148 contracts of their long positions and also liquidated 13,417 of their short positions. As of the latest report, leveraged funds remain long the British pound by ratio of 1.71:1, which is down from the previous week of 1.84:1 and the ratio of 2 weeks ago of 1.86:1.

From the September 14 Weekend Wrap:

“It is remarkable that the number of managed money longs remains at elevated level despite the collapse of the British pound. Consider that 3 weeks ago ( COT report of August 26), the net long position of leveraged funds stood at 52,998 contracts. By the September 9 report the net long position of managed money was 47,320 contracts or a decline of only 5,678 contracts.”

“During the time frame encompassed by the August 26 report (August 20-September 9) through the September 9 COT tabulation, the December British pound lost a substantial 4.93 cents.  In short, large numbers of managed money longs are digging in and refusing to liquidate.”

Euro:

For the week, the December euro lost 1.14 cents. The COT report revealed that leveraged funds added 12,593 contracts to their long positions and liquidated 4,098 of their short positions. As of the latest report, leveraged funds are short the euro by ratio of 2.27:1, which is down from the previous week of 2.75:1 and the ratio of 2 weeks ago of 3.07:1.

The current ratio of 2.27:1 is the lowest since the July 29 COT report when leveraged funds were short the euro by ratio of 2.35:1. As the euro has continued its move lower, leveraged funds are becoming less bearish.

During the past week, the December euro made a new contract low of 1.2835.

Yen:

For the week, the December yen lost 138 pips. The COT report revealed that leveraged funds added 8,117 contracts to their long positions and liquidated 1,915 of their short positions. As of the latest report, leveraged funds are short the yen by ratio of 3.07:1, which is down from the previous week of 4.00:1 and the ratio of 2 weeks ago of 4.92:1.

The current ratio of 3.07:1 is the lowest since the COT tabulation date of July 22 when leveraged funds were short by ratio of 3.71:1.

During the past week, the December yen made a new contract low of .9143.

Dollar index:

For the week, the December dollar index advanced 48 points. The COT report revealed that leveraged funds added 2,640 contracts to their long positions and liquidated 18,801 of their short positions. As of the latest report, leveraged funds are long the dollar index by ratio of 1.16:1, which is a complete reversal from the previous week when they were short by ratio of 1.51:1. Two weeks ago, leveraged funds were short by ratio of 1.32:1.

During the past week, the December dollar index made a new contract high of 84.930.

From the week of July 14 through September 15, the dollar index has closed higher each week for a 10 week consecutive gain of 4.636 points.On July 16, OIA announced that the dollar index had generated a short and intermediate term buy signal. The December dollar index contract high of 84.930 takes it up to the high of 84.965 made during the week of July 8, 2013.

As stated in the September 7 report, we thought the July 2013 high would provide resistance. Additionally, we said once managed money assumed a net long position, the dollar index was vulnerable to making a top or a temporary top. Interestingly, this week’s contract high coincided with managed money assuming a net long position. The dollar index is overdue for a significant correction, and clients should wait for correction before considering bullish positions.

From the September 7 Weekend Wrap:

“We took a look at the weekly continuation chart for the dollar index, and the next major area of resistance is 84.965, which was the high the week of July 8, 2013. The previous week, the dollar index reached 84.930. The high for the dollar index going back 5 years occurred during the week of June 7, 2010 when it printed 88.80. There is little resistance from the current price to the July 8, 2013 high. However, the first indication the dollar index may have reached a top, or temporary top will likely occur when leveraged funds assume a net long position.”

Thus far in the 3rd quarter, the December dollar index is the out performer with a gain of 6.22%, December Canadian dollar -2.48%, December British pound -4.56%, December Australian dollar -4.71%, December Swiss franc -5.80%, December euro -6.27%, December yen -7.05%.

Year to date, the December dollar index is the out performer with a gain of 5.23%, December Australian dollar +1.77%, December British pound -1.30%, December Canadian dollar -2.42%, December yen -3.58%, December Swiss franc -5.77%, December euro -6.90%.

S&P 500 (250 x):

For the week, the December S&P 500 futures contract gained 27.10 points. The COT report revealed that leveraged funds added 6,227 contracts to their long positions and liquidated 2,385 of their short positions. As of the latest report, leveraged funds are short the S&P 500 futures contract by ratio of 1.37:1, which is down dramatically from the previous week of 2.52:1 and the ratio of 2 weeks ago of 1.95:1.

During the past week, the S&P 500 futures contract  made a new contract high of 2014.30.           

Thus far in the 3rd quarter, the NASDAQ 100 cash index is the out performer with a gain of 6.51%, Dow Jones Industrial Average cash index +2.69%, S&P 500 cash index +2.56%, New York Composite cash index +0.09%, S&P 400 cash index – 0.96%, Russell 2000 cash index -3.87%.

Year to date, the NASDAQ 100 cash index is the out performer with a gain of 14.15%, S&P 500 cash index +8.77%, S&P 400 cash index +5.71%, New York Composite cash index +5.67%, Dow Jones Industrial Average cash index +4.24%, Russell 2000 cash index -1.44%.