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This report reflects data of the previous week and the COT report, which was released December 30.

The time frame for the current Commitments of Traders report is from Wednesday, December 17 through Tuesday, December 23.

On December 31, March soybeans, soybean meal and Chicago and Kansas City wheat closed below OIA’s key pivot points. This increases the likelihood that short-term sell signals will be generated during the next session or two. Keep in mind, the USDA will release its grain stocks report on January 12, and this report has a reputation of being a major market mover. ¬†Undoubtedly, the grain markets are reacting in anticipation of this report.

Soybeans:

For the week, January soybeans advanced 17.00 cents, March +15.50, May +15.00.The COT report revealed that managed money liquidated 1,211 contracts of their long positions and also liquidated 1,381 of their short positions. Commercial interests liquidated 12,465 contracts of their long positions and also liquidated 6,241 of their short positions. As of the latest report, managed money is long soybeans by ratio of 1.96:1, which is up somewhat from the previous week of 1.89:1, but down from the ratio of 2 weeks ago of 2.07:1.

Soybean meal:

For the week, January soybean meal advanced $16.20, March +9.80, May +6.00.The COT report revealed that managed money added 7,464 contracts to their long positions and also added 503 contracts to their short positions. Commercial interests liquidated 770 contracts of their long positions and added 5,760 to their short positions. As of the latest report, managed money is long soybean meal by ratio 2.83:1, which is up slightly from the previous week of 2.63:1, but down from the ratio of 2 weeks ago of 2.98:1.

On December 26, March soybean meal closed at $361.80, which is the highest weekly close since the week of June 30, 2014 (362.80). March soybean meal remains on a short and intermediate term buy signal.

Soybean oil:

For the week, January soybean oil advanced 49 points, March +43, May +43.The COT report revealed that managed money liquidated 84 contracts of their long positions and also liquidated 2,312 their short positions. Commercial interests liquidated 6,212 contracts of their long positions and liquidated 2,493 of their short positions. As of the latest report, managed money is long soybean oil by ratio 1.39:1, which is up from the previous week of 1.33:1 and the ratio of 2 weeks ago of 1.19:1

Corn:

For the week, March corn advanced 4.25 cents, May +4.00, July +3.75. The COT report revealed that managed money liquidated 1,162 contracts of their long positions and also liquidated 13,069 contracts of their short positions. Commercial interests added 3,603 contracts to their long positions and also added 9,536 to their short positions.As of the latest report, managed money is long corn by a stratospheric 4.75:1, which is up substantially from the previous week of 3.94:1 and the ratio of 2 weeks ago of 3.51:1.

Note the massive increase in the ratio was due to the liquidation of short positions, not the addition of new long positions.The current ratio of 4.75:1 is the highest since the May 13, 2014 COT report when managed money was long corn by ratio of 5.32:1.

During the past week March corn closed at 4.14 3/4, which is the highest weekly close since the week of June 30, 2014 (4.26 3/4)

Chicago wheat:

For the week, March Chicago wheat lost 21.50 cents, May -20.25, July -17.75.The COT report revealed that managed money added 4,704 contracts to their long positions and liquidated 2,765 of their short positions. Commercial interests liquidated 3,475 contracts of their long positions and also liquidated 8,696 of their short positions. As of the latest report, managed money is long Chicago wheat by ratio 1.34:1, which is up from the previous week of 1.23:1 and the ratio of 2 weeks ago of 1.07:1.

The current ratio of 1.34:1 is the highest since the COT report of May 27, 2014 when managed money was long Chicago wheat by ratio of 1.44:1.

Kansas City wheat:

For the week, March Kansas City wheat lost 21.75 cents, May -21.25, July -18.00.The COT report revealed that managed money added 4,019 contracts to their long positions and liquidated 1,427 of their short positions. Commercial interests liquidated 974 contracts of their long positions and added 4,241 to their short positions. As of the latest report, managed money is long Kansas City wheat by ratio of 3.18:1, which is up from the previous week of 2.54:1, and the ratio of 2 weeks ago of 2.96:1.

Thus far in the 4th quarter thru December 26, March Chicago wheat is the out performer with a gain of 24.52%, March corn +24.36%, March soybean meal +22.35%,March Kansas City wheat +14.69%, March soybeans +13.36%, March soybean oil -1.00%.

Year to date thru December 26, March soybean meal is the out performer with a gain of 2.90%, March Kansas City wheat -4.66%, March Chicago wheat -5.86%, March soybeans -7.91%, March corn -10.03%, March soybean oil -19.63%.

Cotton:

For the week, March cotton advanced 74 points, May +84, July +88.The COT report revealed that managed money added 2,680 contracts to their long positions and liquidated 7,250 of their short positions. Commercial interests liquidated 797 contracts of their long positions and added 10,555 to their short positions. As of the latest report, managed money is long cotton by ratio of 1.31:1, which is up from the previous week of 1.04:1 and a complete reversal from 2 weeks ago when managed money was short by ratio of 1.03:1.

Sugar #11:

For the week, March sugar lost 28 points, May -26, July -21. The COT report revealed that managed money added 1,005 contracts to their long positions and liquidated 3,787 of their short positions. Commercial interests liquidated 13,021 contracts of their long positions and also liquidated 4,038 of their short positions. As of the latest report, managed money is short sugar by ratio 1.34:1, which is down slightly from the previous week of 1.37:1, and up slightly from the ratio of 2 weeks ago of 1.31:1.

Coffee:

For the week, March coffee lost 6.10 cents, May -6.00, July -5.95. The COT report revealed that managed money liquidated 3,267 contracts of their long positions and added 1,204 contracts to their short positions. Commercial interests added 3,680 contracts to their long positions and liquidated 2,205 contracts of their short positions. As of the latest report, managed money is long coffee by ratio of 3.77:1, which is down substantially from the previous week of 4.68:1 and the ratio of 2 weeks ago of 4.67:1.

The current ratio of 3.77:1 is the lowest since the COT report of July 15, 2014 when managed money was long coffee by ratio of 4.18:1.The trading range encompassed by the report was 1.6645-1.8145.

As we pointed out in the December 21 Weekend Wrap, commercial interests have been adding to their long positions and liquidating short positions as prices have moved lower. December 23 was the 4th COT report in which commercials added to long positions and liquidated short positions. Combining the current stats with the previous 3 reports, commercial interests have added a total of 11,045 contracts to long positions and liquidated 5,766 of their short positions. We think this points to higher prices ahead and the relatively high bearish position of managed money bodes well for future price advances. Managed money has a tendency to the most bullish/bearish at major turning points.

From the December 21 Weekend Wrap:

“The positive weekly close for coffee was the first since the week of November 10, 2014. Additionally, for the past 3 COT reporting periods (December 2, 9 and 16), commercial interests have added a total of 7,365 contracts to their long positions and liquidated 3,561 of their short positions. These two factors may be the first indication that coffee is near a bottom.”

Cocoa:

For the week, March cocoa lost $39.00, May -35.00, July -27.00.The COT report revealed that managed money added 6,591 contracts to their long positions and liquidated 97 contracts of their short positions. Commercial interests liquidated 1,143 contracts of their long positions and added 8,750 to their short positions. As of the latest report, managed money is long cocoa by ratio of 4.14:1, which is up substantially from the previous week of 3.71:1 and the ratio of 2 weeks ago of 3.18:1.

The current ratio of 4.14:1, is the highest since the COT report of September 30, 2014 when managed money was long cocoa by ratio of 4.64:1.The trading range encompassed by the September 30 report was 3236-3349, or approximately 350.00 above the December 31 close.In short, managed money is far too bullish considering the current price level, and we look for cocoa prices to continue their slide.

Additionally, the current report confirms our thesis that speculators have been on the buy side and commercials have been on the sell side. Commercials have been keeping a lid on advances, which explains the massive open interest increases of the past couple of weeks when price movement has been nil.

From the December 29 report:

“We are increasingly concerned about massive open interest increases when prices move only fractionally higher. This continues to reinforce our idea that there is trade selling at the upper end of the range.”

Thus far in the 4th quarter thru December 26, March cotton is the out performer with a gain of 1.95%, March cocoa -9.76%, March sugar -10.64%, March coffee -14.61%.

Year to date thru December 26, March coffee is the out performer with a gain of 37.02%, March cocoa +9.62%, March sugar -17.18%, March cotton -21.95%.

Live cattle:

For the week, February live cattle advanced 2.37 cents, April +1.80, June +30 points. The COT report revealed that managed money liquidated 15,969 contracts of their long positions and added 4 contracts to their short positions. Commercial interests liquidated 226 contracts of their long positions and also liquidated 10,871 of their short positions. As of the latest report, managed money is long live cattle by ratio 8.93:1, which is down substantially from the previous week of 10.54:1 and the ratio of 2 weeks ago of 10.63:1.

Note that managed money massively liquidated long positions, but the addition of short positions was minuscule. In short, managed money has not yet moved into the bearish side of live cattle. This increases the likelihood of a continued down side move.

Lean hogs:

For the week, February lean hogs lost 35 points, April +1.00 cent, June +53. The COT report revealed that managed money liquidated 149 contracts of their long positions and added 2,845 to their short positions. Commercial interests added 1,103 contracts to their long positions and liquidated 3,823 contracts of their short positions. As of the latest report, managed money is long lean hogs by ratio of 2.86:1, which is down from the previous week of 3.29:1 and down substantially from the ratio of 2 weeks ago of 4.07:1.

Thus far in the 4th quarter thru December 26, April live cattle is the out performer with a loss of 0.32%, February live cattle -0.66%, April lean hogs -7.29%, February lean hogs -10.04%.

Year to date thru December 26, February live cattle is the out performer with a gain of 22.99%, April live cattle +21.41%, April lean hogs +2.75%, February lean hogs +1.24%.

WTI crude oil:

For the week, February WTI crude oil lost $2.40, March -2.35, May -2.27. The COT report revealed that managed money liquidated 18,859 contracts of their long positions and also liquidated 4,616 contracts of their short positions. Commercial interests liquidated 8,156 contracts of their long positions and also liquidated 4,890 of their short positions. As of the latest report, managed money is long WTI crude oil by ratio 4.56:1, which is up slightly from the previous week of 4.53:1 and up the ratio of 2 weeks ago of 4.36:1.

Heating oil:

For the week, February heating oil lost 4.30 cents, March -3.82, April – 3.56. The COT report revealed that managed money liquidated 2,572 contracts of their long positions and also liquidated 1,983 of their short positions. Commercial interests liquidated 2,439 contracts of their long positions and added 5,613 to their short positions. As of the latest report, managed money is short heating oil by ratio of 1.67:1, which is up slightly from the previous week of 1.60:1 and the ratio of 2 weeks ago of 1.64:1.

Gasoline: 

For the week, February gasoline lost 4.99 cents, March -4.17, April -3.31. The COT report revealed that managed money added 158 contracts to their long positions and also added 653 to their short positions. Commercial interests liquidated 3,699 contracts of their long positions and added 391 to their short positions. As of the latest report, managed money is long gasoline by ratio of 3.39:1, which is down from the previous week of 3.50:1 and the ratio of 2 weeks ago of 3.74:1.

Natural gas:

For the week, February natural gas lost 46.5 cents, March -41.7, April -29.1. The COT report revealed that managed money liquidated 80 contracts of their long positions and added 8,108 to their short positions. Commercial interests added 4,071 contracts to their long positions and liquidated 5,823 of their short positions. As of the latest report, managed money is short natural gas by ratio of 1.19:1, which is up from the previous week of 1.15:1 and the ratio of 2 weeks ago of 1.12:1.

Thus far in the 4th quarter thru December 26, February ethanol is the out performer with a gain of 7.66%, February natural gas -27.83%, February heating oil -28.32%, February gasoline -36.17%, Brent crude oil -37.27%, March WTI crude oil -38.58%.

Year to date thru December 26, February ethanol is the out performer with a gain of 2.47%, February natural gas – 29.91%, February heating oil -35.70%, February WTI crude oil -39.80%, February gasoline -41.32%, February Brent crude oil -46.34%.

Copper:

For the week, March copper lost 7.05 cents. The COT report revealed that managed money liquidated 229 contracts of their long positions and also liquidated 999 of their short positions. Commercial interests added 1,336 contracts to their long positions and also added 1,878 to their short positions. As of the latest report, managed money is short copper by ratio of 1.12:1, which is down slightly from the previous week of 1.14:1 and the ratio of 2 weeks ago of 1.15:1.

Palladium:

For the week, March palladium advanced $13.50. The COT report revealed that managed money added 568 contracts to their long positions and liquidated 730 of their short positions. Commercial interests added 142 contracts to their long positions and also added 444 to their short positions. As of the latest report, managed money is now long palladium by a stratospheric 14.74:1, which is up substantially from the previous week of 9.48:1 and the ratio of 2 weeks ago of 10.75:1.

Platinum:

For the week, April platinum advanced $21.50. The COT report revealed that managed money liquidated 211 contracts of their long positions and added 465 to their short positions. Commercial interests liquidated 45 contracts of their long positions and also liquidated 900 contracts of their short positions. As of the latest report, managed money is long platinum by ratio of 2.20:1, which is down from the previous week of 2.29:1 and the ratio of 2 weeks ago of 2.64:1.

Gold:

For the week, February gold lost 70 cents. The COT report revealed that managed money liquidated 4,484 contracts of their long positions and added 5,144 to their short positions. Commercial interests liquidated 2,394 contracts of their long positions and also liquidated 11,125 of their short positions. As of the latest report, managed money is long gold by ratio of 3.01:1, which is down from the previous week of 3.57:1 and the ratio of 2 weeks ago of 3.27:1.

Silver:

For the week, March silver advanced 11.7 cents. The COT report revealed that managed money liquidated 127 contracts of their long positions and also liquidated 449 of their short positions. Commercial interests liquidated 4 contracts of their long positions and added 1,805 to their short positions. As of the latest report, managed money is long silver by ratio of 1.77:1, which is up slightly from the previous week of 1.74:1, but down from the ratio of 2 weeks ago of 2.11:1.

Thus far in the 4th quarter thru December 26, March palladium is the out performer with a gain of 5.44%, February gold -1.70%, March silver -6.18%, April platinum -6.55%, March copper -6.70%.

Year to date thru December 26, March palladium is the out performer with a gain of 13.26%, February gold -0.90%, April platinum -11.81%, March copper -16.03%, March silver -17.97%.

Canadian dollar:

For the week, the March Canadian dollar lost 14 pips. The COT report revealed that leveraged funds added 4,735 contracts to their long positions and liquidated 3,028 of their short positions. As of the latest report, leveraged funds are short the Canadian dollar by ratio of 2.02:1, which is down from the previous week of 2.87:1 and the ratio of 2 weeks ago of 3.01:1.

Australian dollar:

For the week, the March Australian dollar lost 25 pips. The COT report revealed that leveraged funds liquidated 1,383 contracts of their long positions and added 1,768 to their short positions. As of the latest report, leveraged funds are short the Australian dollar by ratio of 1.84:1, which is up from the previous week of 1.70:1 and down slightly from the ratio of 2 weeks ago of 1.86:1.

Swiss franc:

For the week, the March Swiss franc lost 35 pips.The COT report revealed that managed money liquidated 11,429 contracts of their long positions and added 333 to their short positions. As of the latest report, leveraged funds are short the Swiss franc by ratio of 2.06:1, which is a complete reversal from the previous week when they were long by ratio of 1.03:1. Two weeks ago leveraged funds were short the Swiss franc by ratio of 3.16:1.

British pound:

For the week, the March British pound lost 73 pips. The COT report revealed that leveraged funds liquidated 2,611 contracts of their long positions and added 174 to their short positions. As of the latest report, leveraged funds are short the British pound by ratio of 1.05:1, which is a complete reversal from the previous week when they were long by ratio of 1.03:1. Two weeks ago, leveraged funds were short the British pound by ratio of 1.14:1.

Euro:

For the week, the March euro lost 50 pips. The COT report revealed that leveraged funds liquidated 14,285 contracts of their long positions and added 10,695 to their short positions. As of the latest report, leveraged funds are short the euro by a record 6.44:1, which is up dramatically from the previous week of 3.72:1 and the ratio of 2 weeks ago of 2.41:1.

The current ratio 6.44:1 is the highest short ratio of the bear market in the euro, which began during May 2014 after the June euro made a high of 1.3993.

Yen:

For the week, the March yen lost 60 pips. The COT report revealed that leveraged funds liquidated 15,126 contracts of their long positions and also liquidated 3,666 contracts of their short positions. As of the latest report, leveraged funds are short the yen by ratio 5.40:1, which is up dramatically from the previous week of 3.07:1 and the ratio of 2 weeks ago of 2.95:1.

Although the ratio of 5.40:1 is not a record, it is at the very high-end of the range recorded during the course of the bear market, which began in October 2012.

Dollar index:

For the week, the March dollar index advanced 47 points.The COT’s report revealed that leveraged funds added 4,216 contracts to their long positions and also added 5,859 to their short positions. As of the latest report, leveraged funds are short the dollar index by ratio of 1.15:1, which is up from the previous week of 1.11:1 and the ratio of 2 weeks ago of 1.03:1.

The most notable factor about the rise of the dollar index beginning in July 2014 when OIA announced the dollar index generated a short and intermediate term buy signal through the end of 2014 has been that leveraged funds have been net short almost every week (with few exceptions) throughout the entire bull move.

Thus far in the 4th quarter thru December 26, the March dollar index is the out performer with a gain of 4.74%, March Swiss franc -3.35%, March Canadian dollar -3.38%, March euro -3.63%, March British pound -3.85%, March Australian dollar -6.60%, March yen -8.96%.

Year to date thru December 26, the March dollar index is the out performer with a gain of 12.32%, March British pound -5.70%, March Australian dollar -6.90%, March Canadian dollar -7.76%, March Swiss franc -9.66%, March euro -11.72%, March yen -12.51%.

S&P 500 (250 x):

For the week, the March S&P 500 futures contract advanced 17.10 points. The COT report revealed that leveraged funds liquidated 5,554 contracts of their long positions and also liquidated 16,203 of their short positions. As of the latest report, leveraged funds are long the S&P 500 by ratio of 1.73:1, which is a complete reversal from the previous week when they were short by ratio of 1.53:1. Two weeks ago, leveraged funds were short the S&P 500 futures contract by ratio of 1.54:1.

Thus far in the 4th quarter thru December 26, the Russell 2000 cash index is the out performer with a gain of 10.30%, S&P 400 cash index +7.07%, NASDAQ 100 cash index +6.54%, Dow Jones Industrial Average cash index +5.93%, S&P 500 cash index +5.91%, New York Composite cash index +2.64%.

Year to date thru December 26, the NASDAQ 100 cash index is the out performer with a gain of 20.10%, S&P 500 cash index +13.01%, S&P 400 cash index +9.34%, Dow Jones Industrial Average +8.91%, New York Composite cash index +5.63%, Russell 2000+4.43%.