In the older, less transparent Legacy COT we see Commercials at a 52-week net high of –24,694 contracts net short. This is far different than the 52-week net low of -288,314 contracts net short we saw in the Dec. 7, 2012 COT report. In the newer more transparent Disaggregated report we have seen Producers drop net shorts now -282,475 contracts as Swap Dealers dropped net longs now 257,781 contracts. The difference between these two numbers is -24,694. That is the number from the older Legacy report and that is the correlation between the two reports. Managed Money has been dropping net longs and is currently net long 104,781 contracts. So what does all this mean? Once we see big money leave the bearish posture they have been in, corn prices will start rising. At this time the U.S. growing season looks to be doing well with corn well above the “knee-high by the 4th of July” target in many places. And if this continues it may not be a matter of when will corn start rising, but how low will corn go? Could we see $3.40 like we saw in June 2010? Could be, but also keep in mind back then the U.S. Dollar Index was trading in the high 80s not low 80s. A weakening USD could help keep corn price higher than back in 2010.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.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.
Proceed to Page 3 for this week's detailed fundementals...