Last Monday, May corn opened at 665½ and closed the week at 683½. The low for the week was hit on Wednesday at 608 and the high was hit on Friday at 691½. As for May soybeans, they opened the week at 1336 and closed the week at 1362½. The low for the week was on Tuesday (limit down) at 1270 and the high came in on Friday at 1385¾. On Tuesday, the business media first mentioned the term “demand destruction,” a result of the Japanese earthquake. While I agree with the idea that there may be a slow-down regarding Japanese demand, I do not feel the word “destruction” was a good choice. I guess if the media used the term “slow-down” it would not have been as effective to instill fear as the word destruction. You can see from the above price action that true fundamentals were ignored for a couple of days. Actually, the drop in prices helped some big players liquidate.
Proceed to Page 2 for the latest COT data...
Looking at the Commitment of Traders legacy report, we see that commercials showed a 52-week low in net-shorts for corn on February 11 at -408,170 contracts and this past week came in net-short at -331,506 contracts. What is even more transparent is the disaggregated report which shows producers (true commercials) had an actual net-short position of -672,211 contracts on the March 4 report and as of this past Friday, March 18, were net short -581,854 contracts. That is a drop of 90,357 contracts in two weeks. You can also see what Managed Money and our friends the Swap Dealers did in their positions over the past few weeks.
In the legacy report for soybeans, we see commercials going from a 52-week net-short low of -203,260 contracts on January 21 to -128,082 contracts.
Look at the disaggregated report to see a much more transparent view of how the real “big money” is moving around. Remember the COT is not a timing tool. It is however the best way to watch the “elephants” in the room. Also remember that on March 31 the USDA will be releasing the 2011 Perspective Plantings report. Predictions sound bearish, but we will see.
|
Commodity |
12-mo low |
12-mo hi |
18-Mar |
11-Mar |
|
Cattle (feed) |
-2,917 |
7,100 |
88 |
1,197 |
|
Cattle (live) |
-73,179 |
-18,177 |
-25,680 |
-33,938 |
|
Hogs |
-38,039 |
836 |
-28,014 |
-33,979 |
|
Corn |
-408,170 |
119,389 |
-331,506 |
-380,200 |
|
Oats |
-7,738 |
829 |
-5,177 |
-5,964 |
|
Soybeans |
-203,260 |
49,094 |
-128,082 |
-148,871 |
|
Soybean meal |
-90,487 |
-14,070 |
-42,592 |
-49,439 |
|
Soybean oil |
-117,444 |
32,394 |
-71,780 |
-88,643 |
|
Wheat |
-32,577 |
76,473 |
-5,123 |
-6,343 |
|
Orange juice |
-18,285 |
-6,588 |
-16,168 |
-18,123 |
|
Coffee |
-47,729 |
-4,637 |
-30,386 |
-38,622 |
|
Cocoa |
-41,808 |
8,586 |
-35,632 |
-41,808 |
|
Sugar |
-221,694 |
-104,983 |
-175,230 |
-208,312 |
|
Cotton |
-69,857 |
-12,970 |
-29,686 |
-35,986 |
|
British pound |
-66,435 |
97,211 |
-8,512 |
-48,233 |
|
Canada dollar |
-115,190 |
-13,109 |
-90,828 |
-115,190 |
|
Euro FX |
-74,393 |
124,494 |
-63,634 |
-74,393 |
|
Japanese yen |
-52,533 |
92,866 |
-27,402 |
-8,212 |
|
Swiss franc |
-42,387 |
27,482 |
-42,387 |
-41,437 |
|
US dollar index |
-39,311 |
14,003 |
14,003 |
6,279 |
|
Mexican Peso |
-126,921 |
-14,488 |
-126,921 |
-120,164 |
|
Australian dollar |
-102,706 |
-10,793 |
-61,333 |
-95,280 |
|
S&P 500 |
-88,893 |
33,981 |
12,952 |
-17,309 |
|
T-note -10 yr |
-74,761 |
356,573 |
172,544 |
154,343 |
|
T-bond -30 yr |
-43,324 |
151,936 |
45,524 |
47,252 |
|
Eurodollar |
-1,179,414 |
105,872 |
-239,465 |
10,085 |
|
Crude oil |
-319,669 |
-23,057 |
-310,203 |
-317,064 |
|
Heating oil |
-66,097 |
7,568 |
-46,239 |
-38,780 |
|
RBOB gasoline |
-91,597 |
-10,453 |
-73,485 |
-76,691 |
|
Natural gas |
111,345 |
228,910 |
215,788 |
224,972 |
|
Copper |
-36,201 |
1,793 |
-22,500 |
-25,929 |
|
Gold |
-302,740 |
-193,197 |
-220,154 |
-247,464 |
|
Platinum |
-34,909 |
-15,759 |
-23,319 |
-31,618 |
|
Silver |
-65,413 |
-43,146 |
-53,421 |
-55,350 |
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...
Corn fundamental outlook — Bull market correction — Corn prices retreated as investors liquidated their commodity holdings and moved into cash on the uncertainty caused from Japan’s earthquake and nuclear crisis. However, the longer-term trend remains bullish as the USDA predicts U.S. corn supplies may be restricted for at least the next year or two as the corn market tries to recover from the very tight U.S. supply situation. The corn stocks/use ratios are extremely tight with the U.S. stocks/use ratio of 5.0% matching the 7-decade low posted in 1995- 96 and the world stocks/use ratio at 14.7%.
Soybean fundamental outlook — Bull market correction — Soybean prices are in correction mode on concerns that Japan’s quake disaster may slow the global economy, the prospects of record U.S. acreage this year and improved weather in South America. However, prices remain supported by the USDA’s cut in its U.S. carry-over estimates and by strong Chinese demand. The U.S. stocks/use ratio is tight at 4.2%, but the world stocks/use ratio is near average at 22.7%.
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