Checking in on the Futures Data

Each week I check two places to get a feel for what’s going on in the futures market. First I head over to see what Peter Brandt has to say, Peter is one of the brightest traders and commentators when it comes to the futures market. Then I head to the COT data. I use to compile the data myself but I have turned to other sources to do it for me. Today I’m going to dive into a few charts from Finviz that shows the commercial hedgers as well as the large traders and small traders net positions.

First up is the soybean market. This chart stuck out to me due to the large divergence in large and commercial trader’s net positions. I’ve marked with orange boxes previous occurrences where large traders have been extremely net long  while commercial hedges have been extremely net short. As you can see this has not fared well for the soybean market during the previous three occurrences. Although there was a large divergence between these two groups in ’07 and ’08 which took longer to cause a drop in soybean prices.

Corn has been creating a descending triangle since mid-2011, the further the price of corn gets to the apex the less likely we will see the measured move of $200 that the pattern suggests. I’ve highlighted with orange boxes when the commercial hedges have gone net long corn, which doesn’t last very long but tends to put in an intermediate bottom in the crop. What’s different about today is the overly net long large traders, which hasn’t been the case when commercials get net long. The commercials haven’t gotten net long quite yet, but something to watch.

30-year Treasury’s are seeing the commercial traders approaching a net short position which has caused weakness in the bond market. Although in 2009 we saw the 30-year bond take a nose dive while commercials were heavily net long

Commercials have gotten extremely net long the Japanese yen, they haven’t had this many net long contracts since back in 2007.

Disclaimer: Everything in this post is meant for educational and entertainment purposes only. Do not construe anything written in this post or blog as a recommendation.