Good Evening,


The supplemental report showed the specs bought 88 lots on the week to be 170,458 lots long. The large specs increased their longs from 121,714 lots to 123,311 lots by adding 94 lots of longs and covering 1,503 lots of shorts. The small specs reduced their longs from 48,656 lots to 47,147 lots by selling 2,287 lots of longs and covering 778 lots of shorts. The index funds sold 4,464 lots, within which they added 4,350 lots of new shorts so no sign of re-weighting, to be 187,769 lots long and reduced their share of the open interest by 0.68% to 14.46% exaggerated by the open interest increasing 28,500 contracts. The total spec share of the open interest declined by 0.96% to 27.60%.


The combined report is more interesting with the commercial shorts declining by 301 lots to 227,272 lots within which they bought 17,980 lots and added 17,680 lots of shorts. The AIG report shows the producers/merchants bought 14,175 lots to reduce their shorts to 205,757 lots while the swap dealers increased their shorts by 13,874 lots to 21,515 lots. The non-commercials long increased by 1,208 lots to 180,125 lots made up by the managed money buying 1,228 lots to be 168,565 lots long and the other reportables reducing their longs by 19 lots to 11,540 lots.


The futures specs increased their longs by 100 lots to 231,663 lots.


The CRB rallied 550 points with the index funds mixed on the week. The spec were good buyers of all the grains.


On the week the sugar market rallied 87 points to 27.65 with a 28.90 high and a 26,55 low. Even with today's decline, which is only 160 off the contract highs, most of the spec longs are showing good profits especially as the last two COT reports show the specs were not the big buyers at the higher levels.


The commercials are very interesting in that the producers/merchant buying is likely to be consumers and trade while the swap dealers increasing shorts in likely to be producers pricing well forward and even longer than the ICE screen trades and this could be one of the reasons for the recent weakness of the 2011 positions and forward.  March 2010 rallied 87 on the week whilst March 2012 only rallied 43 and this divergence has been exaggerated since the COT report