This past week, March cotton opened at 16589 and closed at 16786. March coffee opened at 24550 and closed at 24930. March sugar opened at 3410 and closed at 3264. Cocoa opened at 3267 and closed at 3251. All of these markets are at 52-week highs. Looking at the weekly charts below, you will see that cotton’s high before 2010-2011 was 11720 in 1995 (low at 2820 in 2001). So we are now dealing with all-time highs in cotton’s 140-year price history. Sugar’s 35-year high is 66.00 reached in 1974 (low at 2.30 in 1980). Coffee’s 35-year high is 337.50, hit back in 1977 (low 41.50 in 2001). Cocoa’s high was hit in 1997 at 5379.2 (low 674.0 in 2000).
Proceed to Page 2 for the latest COT data...
In cotton, commercials are still adding to their net shorts at -46,785 contracts (older legacy report). Commercials are adding to their net shorts in Sugar and are now at a 52-week low of -221,694 contracts net short. Commercials in coffee are adding to their net shorts at -44,923 contracts. Cocoa commercials adding to their not shorts at -29,841 contracts.
Looking at the spreadsheet below, you can see just how close these numbers are to 52-week lows. On the weekly chart below, see exactly how the commercials’ legacy positions are broken out between swap dealers and the producers (true commercials). I have had a number of questions on whom to follow? If I had to pick one group I would say managed money, but this information is for analytical purposes. The disaggregated report is the most transparent for seeing how “big money” is moving around. (Historical data provided by the CRB 2011 Historical Desk Set). If you trade, you will find the desk set an invaluable tool. I do.
Keep in mind that Australia is the world’s third largest sugar exporter and fourth largest cotton export. Floods have destroyed much of their cotton, and storms have destroyed large areas of sugar cane. Their sugar output will be affected for two to three years.
You can follow me on Twitter at http://twitter.com/TrendsinFutures .
| Commodity |
12-mo low |
12-mo hi |
4-Feb |
28-Jan |
| Cattle (feed) |
-2,917 |
7,100 |
-831 |
-1,290 |
| Cattle (live) |
-73,179 |
-18,177 |
-28,839 |
-31,328 |
| Hogs |
-38,039 |
836 |
-28,419 |
-21,232 |
| Corn |
-403,168 |
119,389 |
-403,168 |
-387,155 |
| Oats |
-6,513 |
829 |
-6,513 |
-5,628 |
| Soybeans |
-203,260 |
56,797 |
-194,664 |
-186,699 |
| Soybean meal |
-90,487 |
-6,350 |
-84,656 |
-73,498 |
| Soybean oil |
-111,786 |
32,394 |
-105,566 |
-81,521 |
| Wheat |
-23,295 |
82,654 |
-23,295 |
-20,973 |
| Orange juice |
-18,722 |
-6,588 |
-17,523 |
-18,285 |
| Coffee |
-47,729 |
-4,637 |
-44,923 |
-41,391 |
| Cocoa |
-35,701 |
8,586 |
-29,841 |
-24,456 |
| Sugar |
-221,694 |
-104,983 |
-221,694 |
-199,293 |
| Cotton |
-69,857 |
-12,970 |
-46,785 |
-43,105 |
| British pound |
-32,356 |
97,211 |
-32,356 |
-15,400 |
| Canada dollar |
-105,107 |
-13,109 |
-66,237 |
-64,699 |
| Euro FX |
-62,835 |
124,494 |
-46,401 |
-28,088 |
| Japanese yen |
-52,533 |
92,866 |
-25,444 |
-27,413 |
| Swiss franc |
-33,169 |
27,482 |
-21,719 |
-15,882 |
| US dollar index |
-44,673 |
2,587 |
2,168 |
-2,739 |
| Mexican Peso |
-118,008 |
-14,488 |
-109,864 |
-101,899 |
| Australian dollar |
-102,706 |
-10,793 |
-80,255 |
-62,135 |
| S&P 500 |
-88,893 |
33,981 |
-29,592 |
-43,666 |
| T-note -10 yr |
-74,761 |
356,573 |
179,104 |
174,149 |
| T-bond -30 yr |
-43,324 |
158,206 |
38,261 |
19,198 |
| Eurodollar |
-1,179,414 |
105,872 |
-231,341 |
-260,460 |
| Crude oil |
-209,503 |
-23,057 |
-196,780 |
-186,754 |
| Heating oil |
-66,097 |
7,568 |
-61,838 |
-56,873 |
| Unleaded gas |
-91,597 |
-10,453 |
-84,937 |
-79,332 |
| Natural gas |
111,345 |
179,433 |
172,981 |
161,963 |
| Copper |
-36,201 |
1,793 |
-28,148 |
-27,546 |
| Gold |
-302,740 |
-193,197 |
-193,197 |
-197,483 |
| Platinum |
-34,140 |
-15,759 |
-34,140 |
-33,434 |
| Silver |
-65,413 |
-37,800 |
-44,801 |
-43,146 |
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...
Cotton fundamental outlook — Medium-term bullish — Cotton prices are firmly bullish as they continue to post record highs because of strong demand, limited supplies and the USDA’s cut in its global carryover estimate to 42.84 mln bales, a 15-year low. The world stocks/use ratio is forecast at less than 37% this year, the lowest since 1993-1994.
Sugar fundamental outlook — Medium-term bullish — Sugar prices are bullish as they rallied to a new 30-year high on concern that Australia’s sugar output may be further reduced from cyclone damage. The fundamental outlook remains bullish on tight supply channels and the possibility that India may limit sugar exports. ISO is forecasting a small 1.3 MMT global sugar surplus for 2010/11 after two years of deficits. ISO is forecasting a 1.7% rise in global sugar demand this year that will cut the inventory-to-consumption ratio to a 20-year low of 32%.
Coffee fundamental outlook — Medium-term bullish — Coffee prices pushed up to a new 13-1/2 year high and the medium-term trend remains bullish on tight global supplies and strong demand. Coffee production in 2009/10 fell -4.5% y/y to 122.9 mln bags (ICO), but production should rebound to +9.6% y/y 134.6 mln bags in 2010/11 (ICO). Brazil’s 2010/11 (July-June) production will rise 23% y/y to 55.3 mln bags on a favorable two-year cycle (USDA).
Fundamental outlook — Bullish — Fundamentals are bullish on supply concerns because of civil unrest in the Ivory Coast and after ICO raised its deficit for the current 2009/10 (October-September) marketing year to 82,000 MT, although a surplus appears likely for 2010/11. World cocoa output in 2009/10 is seen changed y/y at 3.613 MMT. Demand in 2009/10 is up 4.0%, leading to a 4.1% y/y draw-down in ending stocks to 1.619 MMT and a tight stocks/consumption ratio of 44.6% (vs. year-earlier 48.4% and the 10-year avg of 47.1%).
Proceed to Page 4 for weekly Coffee and Cocoa charts...
