Commitment of Traders

Before we present the traditional weekly charts summarizing the CFTC's Commitment of Traders report, we would like to present the literal surge in net spec positions in US Treasuries, across the 2, 5, and 10-Year spectrum. For the first time in 2010, net non-commercial spec positions for all three series are positive, and the cumulative across the three has surged to a 2010 high of 190,264 contracts. There may not be a bubble in treasuries (there is), but with every speculator now openly betting on a continued rise in USTs, it means someone has to take the other side of the trade. Kinda like when all those hedge funds holding Apple are hoping that nothing ever happens to Steve Jobs. (perhaps the irony that the fate of Apple and thus of the entire US stock market, rests in the fate of one very, very thin man, is worthy of its own post).

Presenting the visual CFTC Commitment of Traders summary update for the prior week, courtesy of Libanman Futures and Horowitz and Company.

This week's CFTC Commitment of Traders report, with some very interesting observations on speculative positions in the Treasury curve.

This week's CFTC Commitment of Traders action, presented in visual form. Some highlights: net spec long positions in wheat futures on the CBOT and the KCBOT hit fresh records, at 36.7k and 67.6k: is more food inflation on the immediate horizon? Net spec shorts in US Treasury Bonds, and LT Us Treasury Bonds, while still just negative at -5.8k, and -2.6k, respectively, are at the highest they have been in 2010: keep an eye on this metric as a positive inflection point may be the contrarian signal to sell. At least those concerned about the price of chocolate may rest easy: Cocoa ICE futures dipped to the lowest net spec total for 2010, at 8,092k. In currencies, the JPY posted the second highest net long exposure for 2010 at +51,069 Net Spec, an increase of 1,000 from a week prior, and a far cry from the -55.7k recorded on April 13. EUR net positions also droppe notably, after hitting a 2010 high of -3,731k, the net spec contracts have declined to -21.6k as of August 24.

This week's visual summary of the CFTC's COT data for all major commodity and financial classes. Of note: Net spec wheat futures at 2010 record highs at both CBOT (33.4K contracts), and KCBOT (62.8K contracts). In FX, after 7 weeks of EUR net spec short reduction, we have finally seen an increase in shorts, from -3.7K net short, to -14.6k; Also, net spec Yen longs decline from 2010 record of 52.5 k to 50.0k

This week, in addition to the standard weekly CFTC COT report we post in collaboration with Libanman Futures, we are happy to present data on FX as well, so readers can decide which currencies are overbought/sold by speculators/large commercials, or just look at more pretty charts.

The week's key changes in commodity bets per the CFTC's Commitment of Traders report.

This week's CFTC's Commitment of Traders update for key commodity classes

We are happy to announce our latest joint collaboration, by launching a weekly chart update of the CFTC's Commitment of Traders report for key commodities courtesy of Libanman futures. The commodities presented include crude, nattie, heating oil, cocoa, coffee, sugar, gold, silver, platinum, copper, soybean, wheat, cotton, and OJ. As currencies are not includes in the summary, we will continue our ongoing observation in key currency trends, particularly as pertains to speculative sentiment in the key EUR, JPY and CHF pairs.

Despite expectations elsewhere that speculators may be unwind their Euro short exposure, the CFTC's Commitments of Traders report indicated that for the week ended February 23, futures only speculative shorts hit an absolute all time record of -71, 623, an increase in net short exposure of over 12k compared to the Feb 16 position of -59,422, a massive 20% week over week increase. Another observation: the fans of the JPY are declining materially, with net longs collapsing by 12,195 positions, to just above breakeven, at 1,717. The GBP was the second most hated currency in the past week, with a net positioning of -64,647, an increase in net shorts of 5,409 weekly. The only currencies, which saw net long positions were the AUD (+11,989 to 38,992 and the CAD 4,996 to 28,421), and, of course, the dollar, whose aggregate positioning in nominal terms increased by 20%: from $8.14 billion to $10.28 billion.

The CFTC's Commitment Of Traders report indicated that a record number of short positions were established in the EUR, confirming the decidedly dour investor mood for Europe. At -57,152 net EUR short positions hit a record, after "increasing" by -13,411 and it appears that the GBP will soon follow in the record negative sentiment category. The cable saw 19,314 net new short positions added, bringing the total to -57,549. The GDP record is at -65,346 reached last October. Furthermore, all other pairs saw a net contract decline, including the AUD, CAD, CHF, MXN and NZD. In the "preferred" camp, only the JPY saw net positive contracts of 22,396, an increase of over 15k from the prior week. As a result aggregate USD positioning in nominal terms increased by $4.14 billion to $8.37 billion. The EUR-hate regime is now decidedly here. On the other hand, the EUR is substantially oversold and a technical bounce is to be expected, absent some horrendous news out of the EMU in the next 24 hours.