Weekly Silver Futures Report

L

leon1998

Member
From US Commodity Futures Trading Commission (CFTC)

SILVER - COMMODITY EXCHANGE INC. Code-084691
Disaggregated Commitments of Traders - Futures Only, November 03, 2015
-------------------------------------------------------------------------------------------------------------------------------------------------------------
: : Reportable Positions : Nonreportable
: : Producer/Merchant/ : : : : Positions
: Open : Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Interest : Long : Short : Long : Short :Spreading : Long : Short :Spreading : Long : Short :Spreading : Long : Short
-------------------------------------------------------------------------------------------------------------------------------------------------------------
: :(CONTRACTS OF 5,000 TROY OUNCES) :
: : Positions :
All : 166,942: 12,136 55,417 23,951 47,811 5,425 58,867 10,271 12,019 18,353 8,572 13,473: 22,718 13,954
Old : 166,942: 12,136 55,417 23,951 47,811 5,425 58,867 10,271 12,019 18,353 8,572 13,473: 22,718 13,954
Other: 0: 0 0 0 0 0 0 0 0 0 0 0: 0 0
: : :
: : Changes in Commitments from: October 27, 2015 :
: -2,815: -643 -565 1,818 -492 -713 -4,320 437 927 -483 -1,172 -429: 1,028 -808
: : :
: : Percent of Open Interest Represented by Each Category of Trader :
All : 100.0: 7.3 33.2 14.3 28.6 3.2 35.3 6.2 7.2 11.0 5.1 8.1: 13.6 8.4
Old : 100.0: 7.3 33.2 14.3 28.6 3.2 35.3 6.2 7.2 11.0 5.1 8.1: 13.6 8.4
Other: 100.0: 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0: 0.0 0.0
: : :
: : Number of Traders in Each Category :
All : 191: 12 20 13 14 13 45 14 22 41 32 30:
Old : 191: 12 20 13 14 13 45 14 22 41 32 30:
Other: 0: 0 0 0 0 0 0 0 0 0 0 0:
:-------------------------------------------------------------------------------------------------------------------------------------------------------
: Percent of Open Interest Held by the Indicated Number of the Largest Traders
: By Gross Position By Net Position
: 4 or Less Traders 8 or Less Traders 4 or Less Traders 8 or Less Traders
: Long: Short Long Short: Long Short Long Short
:----------------------------------------------------------------------------------------------------
All : 19.3 35.9 30.1 54.3 16.5 34.8 26.6 49.6
Old : 19.3 35.9 30.1 54.3 16.5 34.8 26.6 49.6
Other: 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
 
Producer/Merchant/Processor/User and Swap Dealers are Commercial Traders; all the rest are Speculators.

Since this futures report includes data up to every Tuesday, Friday's smackdown isn't included; but will be on next report.
 
Producer/Merchant/Processor/User hedge their physical silver; most if not all, the rest are just playing paper.

It looks like until last Tuesday, Producer category's short position didn't move much; which might mean that they didn't sell much product. At least I didn't buy a single oz before Tuesday, did you? :lol: So it makes sense they continue holding the short position as hedge. Swap dealers are usually the Banksters, they didn't cover much short position either by Tuesday. Of course, they knew NFP figures before hand; why would they cover before Friday? I believe they cover a lot after NFP figures; but seems Banksters' short/long ratio will be still quite high.

I guess we have to wait until Swap dealer's short/long ratio reaches parity, which might take another several weeks. However, at current price range, the movement of premium is more dominant than silver spot; if you see any special which reduces premium by a buck or two, then you might want to start stacking a bit. :P
 
leon1998 said:
Producer/Merchant/Processor/User and Swap Dealers are Commercial Traders; all the rest are Speculators.

Since this futures report includes data up to every Tuesday, Friday's smackdown isn't included; but will be on next report.
Click to expand...
A futures market isn't an environment to speculate, it's to hedge AGAINST speculators.
And it's not like "all the rest". The Producer/Merchant/Processor/User and Swap Dealers classes are the contractual counterparties of the noncommercials (your "rest"). That's why the total net position of the Commercial Traders is the exact same of what you name "Speculators" classes, only inverted.
Basically all those on the futures market have orders / stocks on the cash market, orders / positions whose value they want to hedge against eventual price changes by the time the orders are fullfilled or the stocks sold.
Every fluctuation of that total net position, is nothing but a stock replenishment and its subsequent sales.
Swap dealers aren't real commercial hedgers, they just are middlemen that are willing to take the other side of the contracts upon the demand for it. They act in behalf of. If you see swap dealers (as a total net movement) position increase, then that means that on the other side, the noncommercial "rest" as you call it, an equal but inverted position increase occurred.
To not forget is that the creation of a futures contract requires 2 willing sides. It's not like that swap dealers are an initiative-taking side by definition or so. They all can, regardless to which class they at a certain moment are classified by the Comex runners. But they need another side, every sale requires a purchase and vice versa. Usually, swap dealers are the contractual counterparties of the large traders class. So both positions should change in a similar degree. Not exact of course. The real counterparties however, are found in the cash market, not the futures market, that is just a hedging intermediary.
 
I don't think predicting which way the paper markets move is as simple as crunching numbers, etc (over the long term). If that were the case, all the yay-hoo PM prognositicators who prognositicate on the popular PM bug sites would be right every time instead of wrong every time- you guys know what sites I mean (mostly here in the US).

Whenever people try to apply hard and fast rules to such markets it doesn't seem to work. Just like the Elliot wave, Delta turning points, etc, folks can't ever even tell you if we are in a C wave, 4th wave, or whatever that crap is- they can only tell you for sure AFTER it has happened. It has always been my wish to find a objective approach to PM markets so I always read when an Elliot "waver" makes a prediction and I view their charts, and the ones I have followed on the PM bug sites (guys with newsletters and years of experience) have all been wrong over the past couple years. I don't know how they stay in business quite frankly.

I wish it were that easy to call the market moves, then we could all be rich off this stuff.

PS I like Leon's thinking that is simply when the Commercials are piling on shorts to very high levels relative to past times, they most likely won't be losing much money compared to those on the other side of the trade. Recently this meant silver was going to drop, and drop it did. This is more "follow the money" vs. numbers crunching even though yes it involves some number crunching.

Even though there are 2 "sides" to each futures contract, there could be many more "bids" favoring one side which will cause the price to move up or down. Commercials are supposed to be the bullion banks, producers, etc, and they seem to always have more "dry powder" to utilize although I know there are times when they call it wrong but that is the exception not the rule.


Just my opinion.

Jim
 
Jim4silver said:
I don't think predicting which way the paper markets move is as simple as crunching numbers, etc (over the long term). If that were the case, all the yay-hoo PM prognositicators who prognositicate on the popular PM bug sites would be right every time instead of wrong every time- you guys know what sites I mean (mostly here in the US).

Whenever people try to apply hard and fast rules to such markets it doesn't seem to work. Just like the Elliot wave, Delta turning points, etc, folks can't ever even tell you if we are in a C wave, 4th wave, or whatever that crap is- they can only tell you for sure AFTER it has happened. It has always been my wish to find a objective approach to PM markets so I always read when an Elliot "waver" makes a prediction and I view their charts, and the ones I have followed on the PM bug sites (guys with newsletters and years of experience) have all been wrong over the past couple years. I don't know how they stay in business quite frankly.

I wish it were that easy to call the market moves, then we could all be rich off this stuff.

PS I like Leon's thinking that is simply when the Commercials are piling on shorts to very high levels relative to past times, they most likely won't be losing much money compared to those on the other side of the trade. Recently this meant silver was going to drop, and drop it did. This is more "follow the money" vs. numbers crunching even though yes it involves some number crunching.

Even though there are 2 "sides" to each futures contract, there could be many more "bids" favoring one side which will cause the price to move up or down. Commercials are supposed to be the bullion banks, producers, etc, and they seem to always have more "dry powder" to utilize although I know there are times when they call it wrong but that is the exception not the rule.


Just my opinion.

Jim
Click to expand...
The forward/future component in the cash/spot price is a hard figure with a hard price impact.
If it wasn't, the future market would have lost its existence reason since hedging requires both prices equal at contract expiration time.
Since a contract requires two willing sides, any focus on "Commercials" or "Swap Dealers" or whichever trader class or company or individual is useless.
If someone claims A about Commercials then that claim implies an inverted claim about their counterparties at the noncommercial side.
If a particular trader class or company or individual "piles on shorts", then another HAS to "pile on longs".
For some funny reason, that long side is nearly never talked about.
 
Focusing on the type of position of a particular class of future traders would make sense if it is believed that that particular class of traders has insights on future price movements or has the capability to influence those movements, right?
 
I am not a futures expert and don't know enough about comex (and other paper markets) to try and persuade anybody of anything. But I do find it interesting that OFTEN over the past 4 years when PM's have been "smacked down", it is done in overnight markets that are thinly traded, and done in such large numbers at one time that it actually does not benefit the seller as much as if they had done it in stages. Some pundits have pointed this out and say it is prima facie evidence that the shorts want to "manipulate" (I hate to use that word) the price down (over the past 4 years) and that profiting is secondary.

Why would an entity do that in the paper market? If the biggest concern was profit, there would be other ways to sell and profit more instead of shorting large amounts at the same time? But if said entity's goal was simply to knock the price down (by use of large amounts of $$$ overnight in thinly traded markets, etc), perhaps their "goal" goes beyond profiting in fiat and instead is simply to lower the price? Perhaps some commodity traders on here might know about this?

I speculate the same means (leveraged paper markets, ETF's, other derivatives, etc) that have been pushing silver down these past 4 years, were used to push it up to near $50 in 2011. I don't think it was physical buying that drove the market up in 2011 but I could be wrong. I know my local stores had lots of everything as the price was rising then and I don't remember ever hearing of wholesale shortages, etc. except when the price was getting smashed to lows, not being pushed to new highs.

Just my opinion.

Jim
 
Porcello said:
Focusing on the type of position of a particular class of future traders would make sense if it is believed that that particular class of traders has insights on future price movements or has the capability to influence those movements, right?
Click to expand...
For every futures trader or class traders with "insight" in on a price movement in a future price movement, there is another futures trader or class traders with the opposite "insight".
The very reason to have a position on the futures market in the first place, is to avoid extra costs related to an eventual price movement by speculators / who and whatever (alike a bad harvest), by increasing the price already BEFORE that eventual future. If corn producers would anticipate a bad harvest and thus lower income, they could create a number of futures contracts that already increase the price by the time that eventual future happens, and thus receive an extra on the cash market ahead. This is just one example for one side. All futures market - active entities have such a hedging reason. Together they form a block, against their cash market customers (that includes speculators that just stockpile / destockpile, which is essentially just another incarnation of that "bad or top harvest".
We've paid years too much for oil, houses, and so on. It all shares the same reason / method.
 
Jim4silver said:
I am not a futures expert and don't know enough about comex (and other paper markets) to try and persuade anybody of anything. But I do find it interesting that OFTEN over the past 4 years when PM's have been "smacked down", it is done in overnight markets that are thinly traded, and done in such large numbers at one time that it actually does not benefit the seller as much as if they had done it in stages. Some pundits have pointed this out and say it is prima facie evidence that the shorts want to "manipulate" (I hate to use that word) the price down (over the past 4 years) and that profiting is secondary.

Why would an entity do that in the paper market? If the biggest concern was profit, there would be other ways to sell and profit more instead of shorting large amounts at the same time? But if said entity's goal was simply to knock the price down (by use of large amounts of $$$ overnight in thinly traded markets, etc), perhaps their "goal" goes beyond profiting in fiat and instead is simply to lower the price? Perhaps some commodity traders on here might know about this?

I speculate the same means (leveraged paper markets, ETF's, other derivatives, etc) that have been pushing silver down these past 4 years, were used to push it up to near $50 in 2011. I don't think it was physical buying that drove the market up in 2011 but I could be wrong. I know my local stores had lots of everything as the price was rising then and I don't remember ever hearing of wholesale shortages, etc. except when the price was getting smashed to lows, not being pushed to new highs.

Just my opinion.

Jim
Click to expand...
Data shows that what you generalize as "overnight smack down", isn't general.
We've seen "overnight smack ups" too.
Up, and down, share a same reason: surprise. It needs time to convince people to decide in a wrong direction / error. It doesn't need time to quickly take advantage of it.
The only real paper market is a futures market. Because the commodity itself is nearly never ordered. It would be silly too, just imagine a dealer that orders a stock replenishment of 50000 ounces, and takes 10 futures long positions to receive compensation in case the price is driven up till the time of delivery / fullfillment of the order. If he wouldn't phase out (along an equal opposite position) those 10 futures long positions before expiration, he'd end up with 100000 ounces to pay lol.
 
Pirocco said:
For every futures trader or class traders with "insight" in on a price movement in a future price movement, there is another futures trader or class traders with the opposite "insight"..
Click to expand...

Sure! And one of the two traders is wrong. One makes money an the other is at loss. It would be interesting to know if there is a class of traders that sits generally on the pretty side of the trade. Actually, much more than knowing about the aggregates, it would be interesting to know the individual performance of the big traders.
 
Porcello said:
Pirocco said:
For every futures trader or class traders with "insight" in on a price movement in a future price movement, there is another futures trader or class traders with the opposite "insight"..
Click to expand...

Sure! And one of the two traders is wrong. One makes money an the other is at loss. It would be interesting to know if there is a class of traders that sits generally on the pretty side of the trade. Actually, much more than knowing about the aggregates, it would be interesting to know the individual performance of the big traders.
Click to expand...
It doesn't matter which trader is wrong.
They hedge a position / order on the cash market.
If right then the hedger won't lose, just miss a "windfall gain" on the cash market position.
If wrong then the hedger won't lose, since the futures account will have accumulated the dollars that compensate for the loss on the cash market position.
The common element in above: "won't lose".
That's the entire point of a futures market.
The only ones losing (DUE to what is done on the futures market!), are those that purchase when the futures market entities have a total net position > 0.
The higher, the more loss.
The futures market is basically just a transitional environment between the profit/loss streams.
Hedging and speculation are eachothers antipoles.
The individual position of, or any focus on, a particular trader or traders class is therefore a useless element in determining who (on the cash market!) ENDS UP reaping profit or eating loss.
Trader classes also do not consist of same/fixed companies. The CFTC classifies companies on the fly / dynamically. Based on their CURRENT and DOMINANT activity. Positions change all the time. A buyer becomes a seller and vice versa. A big position can become a small position and vice versa.
The Weekly Futures Report became more detailed at some point in time, but without company specific information one can't track who is who and who does what at which time. That so called "detail" serves more as an attention drawer geared towards making people miss the important basic elements.

Another thing to take into consideration is the share that the futures market of a commodity has in the entire market of that commodity. There are markets where the futures part of it are a peanut compared to the whole. And there are markets where it's much bigger.
For ex, the silver futures market has a typical total net position top of 50000. That's 50000 x 5000 = 250 Moz. The total silver markets supply/demand is 1000 Moz. So the futures market represents a quarter, which is quite big. For ex golds market, with a typical position peak of 200000, that's 200000 x 100 = 20 Moz. The total gold markets supply/demand is 128 Moz, so its futures market represents only 1/6. And this is the capital reason for silvers double price volatility. Some seem like to "blame" this to the metal but it's not, it's some of those active on its market.
 
Pirocco said:
Another thing to take into consideration is the share that the futures market of a commodity has in the entire market of that commodity. There are markets where the futures part of it are a peanut compared to the whole. And there are markets where it's much bigger.
For ex, the silver futures market has a typical total net position top of 50000. That's 50000 x 5000 = 250 Moz. The total silver markets supply/demand is 1000 Moz. So the futures market represents a quarter, which is quite big. For ex golds market, with a typical position peak of 200000, that's 200000 x 100 = 20 Moz. The total gold markets supply/demand is 128 Moz, so its futures market represents only 1/6. And this is the capital reason for silvers double price volatility. Some seem like to "blame" this to the metal but it's not, it's some of those active on its market.
Click to expand...

The entire market of gold should be around 170,000 tons which is approx 5 billion oz. Where did you get the 128Moz figure? Are you only looking at the yearly production (mining + recycling)?
 
Current open positions on Oanda
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Porcello said:
Pirocco said:
Another thing to take into consideration is the share that the futures market of a commodity has in the entire market of that commodity. There are markets where the futures part of it are a peanut compared to the whole. And there are markets where it's much bigger.
For ex, the silver futures market has a typical total net position top of 50000. That's 50000 x 5000 = 250 Moz. The total silver markets supply/demand is 1000 Moz. So the futures market represents a quarter, which is quite big. For ex golds market, with a typical position peak of 200000, that's 200000 x 100 = 20 Moz. The total gold markets supply/demand is 128 Moz, so its futures market represents only 1/6. And this is the capital reason for silvers double price volatility. Some seem like to "blame" this to the metal but it's not, it's some of those active on its market.
Click to expand...

The entire market of gold should be around 170,000 tons which is approx 5 billion oz. Where did you get the 128Moz figure? Are you only looking at the yearly production (mining + recycling)?
Click to expand...
Yes of course, the annual supply/demand total.
Your 170000 tonnes isn't a "market quantity".
The difference between a stockpile and a market is that the former doesn't get traded at the price and the latter does. The stockpile is thus irrelevant for the price mechanism. What I did was comparing -traded- amounts. Inclusive the bogus-traded (those cancelled orders on the futures market, solely ment to drive the cash market price temporary up so that price-change compensating money can be reaped.
These are gold.org figures:

Year / Mining / Recycling (tonnes) / Price (USD)
1997 2527 631 $330.98
1998 2574 1108 $294.24
1999 2602 620 $278.88
2000 2618 619 $279.11
2001 2645 749 $271.04
2002 2618 872 $309.73
2003 2621 985 $363.38
2004 2493 878 $409.72
2005 2548 897 $444.74
2006 2486 1126 $603.46
2007 2476 956 $695.39
2008 2409 1217 $871.96
2009 2584 1672 $972.35
2010 2659 1653 $1224.53
2011 2839 1611.9 $1571.52
2012 2864.1 1590.8 $1668.98
2013 3060.3 1254.6 $1411.23
2014 3135.0 1175.9 $1211.71

Demand
1997 4165
1998 3824
1999 3911
2000 3821
2001 3727
2002 3360
2003 3194
2004 3498
2005 3733
2006 3405
2007 3552
2008 3806
2009 3493
2010 3812
2011 4067.1
2012 4585.2
2013 4065.5 > 4087.6 > 4436.3
2014 3923.7 > 4212.4
(again: every > figure means a data revision in subsequent quarterly reports, not complete because at some point I noticed them, didnt before and also just monitoring this since a couple years)

Btw, to put an emphasis: a "market" is a place where people trade! :)
 
leon1998 said:
My next purchase would be around Thanksgiving Day. I am expecting silver spot to be in US$13.5 area; and many holiday specials on premium reduction. :P

ASE would be $16 each. :cool:

Jim4silver said:
Interesting article says lower silver prices coming and talks about the very high recent levels of commercial shorts. I hate to think it but this guy is probably going to be right.

http://marketdailynews.com/2015/11/05/silver-testing-its-lows/

Jim
Click to expand...
Click to expand...

Leon,

I am buying all the time. I like to get cool, cheap stuff that is usually only available in smaller amounts as it trickles in to a couple of my local dealers. Most of the stuff I get cheap could sell for double (sometimes more- like some of my US commem dollars) on ebay, etc, so I am not concerned as much about spot.

If I were going to "stack" common bullion I would not feel good doing that here unless I was a newbie with no silver, then this price level would not be bad even if silver drops further I believe. I did get a handful of spotted Maples last week for $1 over melt, maybe I should have waited on those beauties though. :P

Jim
 
Jim,

Silver spot still matters even when you buy semi-numi or numi; if you bought any when spot was above $30. :P
Of course at current price range, downside might be limited; let's say if silver drops to $12, which is not much from now. Then you're okay collecting numis; because they're not always available.

What if silver drops to $8? Would you still buy now?
 
leon1998 said:
Jim,

Silver spot still matters even when you buy semi-numi or numi; if you bought any when spot was above $30. :P
Of course at current price range, downside might be limited; let's say if silver drops to $12, which is not much from now. Then you're okay collecting numis; because they're not always available.

What if silver drops to $8? Would you still buy now?
Click to expand...


The bulk of my silver that I currently own was bought under $20 (including premiums). I was more into Pre 33 US gold back when silver was higher, but as it dropped below $26 I started buying a little (still have some tubes of ASEs I paid $29 per coin!), but not much of that stuff thankfully.

I can't imagine silver at $8, or rather refuse to think about that. :o If silver gets that low, I will need a religious conversion or something like that. You really think physical will be available at that price with regular premiums?

Jim
 
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