speedybure (< 20)

Latest Commitment Of Traders Reports in Silver

December 28, 2010 – Comments (4) | RELATED TICKERS: SLV

Small but very telling structural changes continues in this week’s Commitment of Traders report, once again highlighted by another drop in adjusted Net open interest. Another telling line item, is the net short position of the 4 largest commercial traders, which is dominated by JP Morgan, dropped 5.9% to a net short position of 39,647 from 42,167 contracts week/week. The bullish factor here is not just the drop in the net short position but the concentration levels, which accounts for the change in adjusted net open interest, down 1.67%, currently at 51.21%. The 8 largest commercials also had a significant drop in the net short position, illustrating that they didn’t take control of the short positions covered by JP Morgan and the other 3 largest commercial traders. Their net short position decreased 2,676 contracts in addition to their concentration levels contracting 1.34% to 70.63%. Additionally, the commercial spread position increased which means they added to their gross long position as they are already very net short silver futures in general, while the net short position of total world silver bullion inventories decreased 1.34% which is quite significant given it is estimated to be between 800m – 1B ounces.

                                                       Current- Prior Week-2 Weeks-3 Weeks-1Month-

Unadjusted Open Interest                   133,135  130,145  137,675  133,139  147,685  

Gross Long Position                           30,852   28,454   29,245   29,791   37,420   

Gross Short Position                           77,909   76,590   78,070   79,561   84,273  

Unadjusted Net Position                       (47,057) (48,136)(48,825)(49,770)(46,850)                                             

Number of Commercials Net Short          41                                                                          

Net Short Position of 4 Largest             (39,674) (42,167) (44,056) (46,199) (46,668)

Top 4 Net Short                                   29.80%  32.40%  32.00%  34.70%  31.60%                                                                  

Adjustement For Spreading                                                                                       

Non-Commercial Spreads                      32,475   31,201   35,326   33,232   36,383   

Net Open Interest                                 100,660  98,944 102,349  99,907 111,302 

New Percentage Held by 4 Largest         39.41%  42.62%  43.04%  46.24%  41.93%                                                                    

Net Percentage Held By 8 Largest             41.10%  44.10%  42.70%  46.10%  41.50%  

Net Position Held By 8 Largest                 (54,718) (57,394) (58,787) (61,377) (61,289)

Raptors Position                                        7,661     9,258     9,962    11,607   14,436   

Commercials Spread Position                    23,191    19,196   19,283   18,184   22,984   

Adj Net Open Interest                              77,469    79,748   83,066   81,723   88,318   

Real Percentage Held by 4 Largest          51.21%  52.88%  53.04%  56.53%  52.84% 

Real Percentage Held by 8 Largest          70.63%  71.97%  70.77%  75.10%  69.40%                                                                    

Net Position of World Silver Bullion          27.36%  28.70%  29.39%  30.69%  30.64%  

Summing this week’s COT report up, all remains bullish on the silver front, with very important structural changes continuing this trend over the past couple of months and even 6 weeks as seen through the chart above. The changes in concentration levels by the four largest commercial banks, adjusted net open interest and net short position of world silver bullion inventories decreasing significantly even over just the last 6 weeks. As I have said in the last 4 or 5 silver COT updates, I'm expecting this same trend to continue, although week/week trends will likely show volatility going forward.