Commercials are at 52-week net-short lows in corn and beans. What does this mean to you as a trader?

Market Pulse: Jan. 24, 2011

COT Data

To get a better picture of how the “elephants in the markets” are moving around, you would want to view the new Disaggregated COT report which pulls swap dealers out of the commercial positions and shows managed money along with other reportables. The charts from Trends in Futures (below) are the perfect view to show why I view the new report. Producers (true commercials) in beans are actually net-short 320,125 contracts, swap dealers are net-long 116,865 contracts, managed money are net-long 142,575 contracts and other reportables are net-long 83,013 contracts. (The difference between producers and swaps make up the commercial number in the older COT report above). Even more shocking is corn where producers (true commercials) are net-short 668,817 contracts, swap dealers are net-long 272,605 contracts, managed money are net-long 367,369 contracts and other reportables are net-long 112,350 contracts. Since these groups make up 75%-80% of open interest in pretty much all markets, seeing how they are posturing is vital to catching major/minor trends.

Commodity 12-mo low
12-mo hi
21-Jan
14-Jan
Cattle (feed) -2,917
7,100
35
256
Cattle (live) -73,179
-18,177
-31,287
-41,437
Hogs -38,039
836
-20,922
-16,885
Corn -396,212
119,389
-396,212
-377,094
Oats -6,317
829
-5,957
-5,539
Soybeans -203,260
56,797
-203,260
-192,389
Soybean meal -90,487
-6,350
-77,895
-78,113
Soybean oil -111,786
32,394
-94,660
-92,540
Wheat -16,413
82,654
-9,811
-9,579
Orange juice -18,748
-6,588
-18,178
-18,047
Coffee -47,729
-4,637
-45,699
-42,768
Cocoa -49,897
8,586
-18,561
-16,009
Sugar -238,100
-104,983
-197,433
-206,189
Cotton -69,857
-12,970
-39,272
-36,391
British pound -31,274
97,211
-11,057
11,541
Canada dollar -105,107
-13,109
-75,356
-76,876
Euro FX -62,835
124,494
-5,214
50,392
Japanese yen -52,533
92,866
-14,407
-17,825
Swiss franc -33,169
27,482
-18,072
-21,512
US dollar index -46,250
2,587
-6,901
-14,096
Mexican Peso -118,008
-14,488
-96,857
-90,537
Australian dollar -102,706
-10,793
-73,411
-74,554
S&P 500 -88,893
33,981
-36,121
-37,893
T-note -10 yr -74,761
356,573
148,949
139,335
T-bond -30 yr -43,324
158,206
35,170
42,216
Eurodollar -1,179,414
105,872
-243,509
-114,595
Crude oil -209,503
-23,057
-209,503
-203,641
Heating oil -66,097
7,568
-63,197
-66,097
Unleaded gas -91,597
-10,453
-82,011
-84,647
Natural gas 111,345
179,433
175,030
153,185
Copper -36,201
1,793
-34,305
-36,201
Gold -302,740
-206,471
-206,471
-225,064
Platinum -33,831
-15,759
-33,831
-29,505
Silver -65,413
-37,800
-45,368
-46,750

Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.

Proceed to Page 3 for this week's detailed fundementals charts...

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