During the rising market activity of the sectors was predictable as managed money covered while commercials sold. Unlike KC, maybe, funds are still net short in RC. The report shows that 7 traders in the large traders category reversed from long to short. This is not evident in the activity. What is evident is that this group and swap dealers participated in large number of spreads. Spreads traded back and forth so itís impossible to see whether spreads were bought or sold. Their participation however, will dampen volatility in spreads.
We look forward to the KC COT on Monday but, applicable to both markets, is the strength. The market was not fazed by the seemingly bearish Rabobank production estimate for Ď20í21, and it seems that the Real weakness traps shorts to only add more strength. Because the OI is increasing and because the market is rising with steady uniformed buying, itís probable that the new buying is managed money who are likely net long by now. We will see.
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