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Doane Agricultural Services   |   Updated: December 14, 2011

Corn futures are trading solidly lower at midday. A broad base sell-off in commodity markets are being driven by strength in the dollar index and weakness in the stock market due to continued concern about European debt. Sharp losses in crude oil futures are also weighing on futures. Lackluster export demand is also a bearish factor as global grain supplies are providing much competition. December is 11 1/2 cents lower at $5.77 and March is 13 cents lower at $5.81 1/2.  

Soybean futures are sharply lower at midsession. Strength in the dollar and weakness in the stock market are triggering fund long liquidation in the soybean market. The dollar index has hit an 11-month high against eh euro on further concern about the European debt crisis. Losses in crude oil futures are also pressuring the soy complex. NOPA crush for November was reported at 141.2 million bushels, which was below pre-report trade estimates. January is 21 1/2 cents lower at $10.97 and March is 21 1/2 cents lower at $141.07 1/2.    

Wheat futures are strongly lower at midday. Strength in the dollar index and weakness in the stock market has led to a broad based sell-off in commodities. Export demand for U.S. wheat is already sluggish and a stronger dollar will make supplies even less competitive. Global supply and demand fundamentals remain bearish and the U.S. continues to lose export market share to cheaper wheat primarily from the Black Sea region. CBOT March is 14 1/2 cents lower at $5.86, KCBT March is 14 1/2 cents lower at $6.41 1/2 and MGE march is 12 1/4 cents lower at $8.17 3/4.   

Cattle futures are trading lower at midsession. Outside market pressure is weighing on the futures market. Weakness in the stock market is being driven by further concern about the European debt crisis. Cash trade has not yet developed this week, but expectations are for lower trade. Packer processing margins remain bad despite some recent improvement in boxed beef prices. December is 50 cents lower at $117.40 and February is 53 cents lower at $118.13.

Lean hog futures are lower at midday. Strength in the dollar index and weakness in the stock market are weighing on commodity markets. However, front end losses are being limited by the 66 cent jump in pork cutouts on Tuesday. October pork exports were strong, but there is concern about the lack of export demand from China recently. December is 18 cents lower at $85.63 and February is 20 cents lower at $86.20.

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The commission voted 5-0 to approve a final rule for how prices for trades will be made public, which depends on the type of transaction and who is doing the trading. The regulation for “real-time” price disclosures will put swaps subject to a clearing requirement at an initial 30-minute delay, which would narrow to 15 minutes after the first year. The rule also provides for an initial 48-hour delay for end users of derivatives to report prices.

The rule phases in the delays, starting no sooner than July 16.

The Dodd-Frank Act required the CFTC and the Securities and Exchange Commission to increase transparency in the $708 trillion global over-the-counter derivatives market, where largely unregulated trades helped fuel the 2008 credit crisis. The commission voted 3-2 on Nov. 19, 2010, to propose a 15- minute delay for reporting the block trades of standardized swaps.

Industry groups representing banks including JPMorgan Chase & Co. (JPM), Goldman Sachs Group Inc. (GS) and Deutsche Bank AG argued that the proposal for a 15-minute limit — meant as a window to give traders a chance to hedge big trades prior to them going public — wasn’t enough time to protect them from competitors taking advantage of their need to hedge.

Bloomberg LP, the parent company of Bloomberg News, has said it intends to register as a swap-execution facility.

Compliance Policy

NYSE-Deutsche Boerse Offer Derivatives Fees Cap to EU

NYSE Euronext and Deutsche Boerse AG told antitrust regulators they would impose a three-year ban on derivative-fee increases should they approve their merger.

The exchanges would agree not to raise published trading and clearing prices for derivatives on NYSE Euronext’s Liffe exchange and Deutsche Boerse’s Eurex market, Deutsche Boerse said in an e-mailed statement yesterday. The remedy was sent last week after the exchanges submitted a revised set of proposals including the sale of NYSE’s Liffe single-stock equity derivatives business to the European Union, two people familiar with the situation said earlier in the day yesterday.

Officials are analyzing the exchanges’ previous offers, EU Competition Commissioner Joaquin Almunia said yesterday. The exchanges are trying to convince European regulators that merging to create the world’s largest exchange operator won’t stifle competition in derivatives and clearing.

James Dunseath, a spokesman for NYSE Euronext (NYX) in London, declined to comment. The companies sent the new remedy in a letter to Almunia, Deutsche Boerse said.

The exchanges plan to meet European regulators to discuss the revised remedies before the European Commission breaks for official holidays tomorrow, the two people said. If the meeting suggests the remedies are still insufficient, the exchanges will continue to press their case, they said.

Before deciding whether to approve or block a deal, the European Commission must consult competition agencies from the European Union’s 27 nations. Commissioners from each EU country must also vote on a decision. Companies can then appeal a merger ban at the EU courts. The last day the commission can rule is Feb. 9.

CFTC Votes 5-0 to Adopt Rule on Swaps Data Recordkeeping

The U.S. Commodity Futures Trading Commission approved a rule requiring swap data repositories to keep digital information about swaps immediately accessible during the life of the swap and for five years after its termination.

The swaps recordkeeping rule, required by the Dodd-Frank Act, passed with a 5-0 vote at a meeting yesterday in Washington.

China to Amend Futures-Trading Regulations, Xinhua Reports

China will amend futures-trading rules to improve government supervision, the official Xinhua News Agency reported yesterday, without citing anyone. The State Council will publish a draft of the proposed regulations today and invite public comment, Xinhua said.

Compliance Action

Further Euro-Bond Steps Urged by European Parliament Committee

A European Parliament panel urged further steps toward joint bond sales by euro-area nations, highlighting growing political concerns over the region’s two-year-old debt crisis.

The European Union assembly’s economic committee pressed EU regulators “to come forward rapidly” with proposals tied to the introduction of common euro bonds, which the German government opposes. The non-binding resolution responds to a Nov. 23 paper by the European Commission, the EU’s regulatory arm, on options for joint debt issuance, also called “stability bonds.”

“The prospect of stability bonds could foster stability in the euro area in the medium term,” the committee said in the resolution approved yesterday in Brussels and due to go to the full 754-seat EU assembly early next year. The committee said it is “deeply concerned by the continuous strains on the euro-area sovereign bond markets reflected in widening spreads, high volatility and vulnerability to speculative attacks over the last two years.”

The idea of bonds sold jointly by the euro area’s 17 nations remains alive because unprecedented support by governments and the European Central Bank have failed to stamp out debt concerns that began in Greece in late 2009 and now threaten Spain and Italy. The troubles led Greece to seek an initial rescue in April 2010, pushed Ireland and Portugal into aid programs over the ensuing year and prompted a second Greek bailout in October.

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Courts

Amaranth’s $77.1 Million Manipulation Settlement Approved

A federal judge approved a $77.1 million settlement by Amaranth Advisors LLC, the hedge fund that collapsed in 2006 after losing $6.6 billion on natural gas trades, of a lawsuit brought by traders who accused it of market manipulation.

U.S. District Judge Shira Scheindlin, in an order Dec. 15, approved the agreement, which was filed two days earlier in Manhattan federal court by plaintiff’s attorney Christopher Lovell of Lovell Stewart Halebian Jacobson LLP. The parties had reached a tentative agreement in October.

“The plaintiffs compromised to a tiny fraction of their overall claim,” Stephen Senderowitz of Winston & Strawn P.C. in Chicago, a lawyer for Amaranth, said yesterday in a phone interview. The settlement avoided the cost and risk of a trial, and paves the way for investors to receive any remaining funds, he said.

Lovell didn’t return calls seeking comment on the settlement.

The case is In Re Amaranth Natural Gas Commodities Litigation, 07-06377, U.S. District Court, Southern District of New York (Manhattan.)

Ferrostaal Fined $183 Million by Court at Ex-Managers’ Trial

Ferrostaal AG was fined 140 million euros ($183 million) yesterday by a Munich court in a bribery case related to the conduct of two former employees.

The fine is the result of an agreement between the company, prosecutors and the judges, court spokeswoman Margarete Noetzel said in an e-mailed statement. The sanction was issued as part of a verdict in the trial of two former company managers accused of paying bribes in Greece and Portugal.

Ferrostaal said at the beginning of the trial on Dec. 15 that it was willing to pay the fine, which was the result of “intensive negotiations.” The company said in a statement yesterday that it would bear the consequences and pay the fine.

The two former company managers, identified only as Johann- Friedrich Ha., 73, and Hans-Dieter Mue., 73, were convicted of bribery, received suspended prison terms of two years and were fined, according to the statement.

Prosecutors had been probing Essen, Germany-based Ferrostaal, which manages the development of industrial and petrochemical plants, since 2009 to determine whether it bribed officials for contracts.

Interviews/Speeches

Chilton Says MF Global Client Funds Must Be Returned

Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, talked about the outlook for returning lost money to former customers of bankrupt commodities broker MF Global Inc.

Chilton spoke with Scarlet Fu and Stephanie Ruhle on Bloomberg Television’s “InsideTrack.”

For the video, click here.

CFTC’s Gensler Says Agency to Propose Volcker Rule in January

U.S. Commodity Futures Trading Commission Chairman Gary Gensler said his agency may vote to propose the so-called Volcker Rule in January.

The CFTC is the last of several U.S. financial regulators to propose the rule curtailing banks’ proprietary trading and their relationships with hedge funds. The rule is required by the 2010 Dodd-Frank Act.

“I would be hopeful that we would address ourselves to a proposal — possibly even in the first meeting of January — of the Volcker Rule,” Gensler told reporters at a meeting yesterday in Washington.

Kroszner Says ‘No Magic Number’ for Capital Rules

Randall Kroszner, professor of economics at the Booth School of Business at the University of Chicago and a former Federal Reserve governor, talked about bank capital and liquidity requirements.

The Federal Reserve will issue capital and liquidity rules this week reshaping supervision of the riskiest, largest banks and those with more than $50 billion in assets, a government official familiar with the matter said. Kroszner spoke with Lisa Murphy and Michael McKee on Bloomberg Television’s “In the Loop.”

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Comings and Goings

Germany Appoints Elke Koenig to Succeed Sanio as BaFin Chief

The German government appointed Elke Koenig to replace Jochen Sanio as head of the country’s financial regulator, BaFin, effective Jan. 1.

“The financial markets are going through difficult times – - a lot is in a state of transition — so it’s of special significance to have an experienced and proven personality at the head” of BaFin, Finance Minister Wolfgang Schaeuble said in an e-mailed statement. “This will strengthen the confidence in Germany as a financial center.”

Bahrain’s AAOIFI Appoints Khaled Al Fakih as Secretary General

The Accounting and Auditing Organisation for Islamic Financial Institutions appointed Khaled Al Fakih as its secretary general, replacing Mohamad Nedal Alchaar. The Mananma, Bahrain-based institution made the announcement in an e-mailed statement yesterday.

To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net.

To contact the editor responsible for this report: Michael Hytha at mhytha@bloomberg.net.

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CFTC commissioners are scheduled to meet in Washington today to vote on final rules for “real-time” reporting of such trades, one of a number of provisions of the Dodd-Frank Act designed to make the $708 trillion global over-the-counter derivatives market more transparent.

Dodd-Frank required the CFTC and the Securities and Exchange Commission to establish regulations to reduce risk in the derivatives markets, where largely unregulated trades helped fuel the 2008 credit crisis. The commission voted 3-2 on Nov. 19, 2010 to propose a 15-minute delay for reporting the block trades of standardized swaps, meant as a window to give traders a chance to hedge the big trades prior to them going public.

Banks, through industry groups, argued that the proposal for a 15-minute limit wasn’t enough time to protect them from competitors taking advantage of their need to hedge. Banks use hedging, which involves offsetting trades with opposite transactions, to shield themselves from losses.

“Dealers may hold on to positions for days or weeks before hedging,” the Federal Reserve Bank of New York said in a Sept. 27 report that cited anecdotal evidence of industry practices that could complicate regulators’ attempts to set the reporting window to a matter of minutes.

Bloomberg LP, the parent company of Bloomberg News, has said it intends to register as a swap-execution facility.

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net.

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.

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By Leon Lazaroff and Halia Pavliva

Dec. 20 (Bloomberg) — Russia’s newly merged Micex-RTS exchange halted equity futures trading on its first day, sparking concern the Moscow bourse won’t be able to compete with global peers.

Futures expiring in March on the dollar-denominated RTS index in Moscow stopped trading about 12 minutes into the U.S. session yesterday due to a “technical problem,” Anton Storozh, a technical support specialist at the exchange said by phone from the Russian capital. Trading resumed 50 minutes before the end of the session, with the contracts sliding 1 percent to 133,350.

The world’s 10th biggest futures market, according to the Futures Industry Association, became part of Russia’s newly combined exchange yesterday after the Micex and RTS united in a bid to lure local companies and investors back to their home market. After halting trading more than 30 times in the second half of 2008, the Micex cut the number of stoppages to once in 2009 and five this year, according to spokesman Nikita Bekasov.

“It’s not a good start,” Luis Saenz, chief executive officer of the U.S. unit of Moscow-based brokerage Otkritie Financial Corp., said by phone from New York. “Investors have been complaining, wondering if this is what they should expect going forward, especially in this environment when there is already so much happening in Russia politically and otherwise.”

Otkritie handles about 38 percent of futures and options trading on the RTS, according to Saenz.

U.S.-traded shares of Russian companies also declined, with the Bloomberg Russia-US 14 Index slipping 3.1 percent to 87.03, the lowest level since Oct. 7.

‘Great Deal of Discomfort’

American depositary receipts of coal producer OAO Mechel plunged to a 2 1/2-year low as European Central Bank President Mario Draghi said “substantial downside risks” remain for the economy of Europe, which provided 19 percent of Mechel’s sales last year and is Russia’s largest trading partner.

The ruble-denominated Micex, which handles about 70 percent of equity transactions in Russia, and the dollar-priced RTS, which dominates derivatives trading, merged to get more of the share of “internal investing in Russia” and to lure more companies to list on the local market and undertake initial public offerings, Ruben Aganbegyan, president of the Micex-RTS, said in a Bloomberg Television interview conducted from Moscow on Dec. 16.

“We feel a great deal of discomfort because of this,” Bekasov, a spokesman for the merged Micex-RTS exchange said by phone from Moscow yesterday. The problems were caused partially by the “merger of two different technologies that have been used by RTS and Micex when the two exchanges developed independently. Those are similar technologies and yet they are different,” he said.

Shifting Listings

Calls to the Micex-RTS’ two customer technical support hotlines weren’t answered after hours in Moscow yesterday.

Polyus Gold International Ltd., Russia’s biggest gold producer, moved its primary listing to London from Moscow in November to gain access to foreign investors. OAO Phosagro, a Moscow-based fertilizer maker, sought approval from the Federal Financial Markets Service to allow 21.38 percent of its shares to be traded overseas, the company said in an e-mailed statement yesterday.

Mechel, which acquired its U.S. subsidiary Bluestone Coal Corp. in 2009, may move an IPO of its coal and iron-ore mining unit to New York next year after delaying a planned $2 billion sale in London in September. The deal may take place in April or May, three people with knowledge of the matter said, declining to be identified.

Rusal Declines

United Co. Rusal, the world’s largest aluminum producer, lost 1.6 percent to HK$4.81 in Hong Kong trading as of 1:23 p.m. local time. The MSCI Asia Pacific Index advanced 0.2 percent following a 1.8 percent slump yesterday.

Mechel stock fell 8.6 percent to $8.18 in New York, the lowest level since July 2009, while shares in Moscow fell 1.1 percent to 279.20 rubles, or the equivalent of $8.70. One Mechel ADR is equal to one ordinary share. Societe Generale cut its 12- month target price on Mechel’s ADRs to $20 from $34 yesterday, according to an e-mailed report.

OAO Gazprom slipped to the lowest level since Oct. 11 in New York trading as the Communist Party, which boosted its seats in Russia’s parliament to 92 from 57 in Dec. 4 Duma elections, called for higher taxes on the nation’s gas export monopoly.

Poll Majority

While suffering its worst electoral result since 2003, Prime Minister Vladimir Putin’s United Russia party retained a majority in the poll, which observers have described as being marred by violations such as ballot stuffing. Opposition political groups are preparing to stage a demonstration in Moscow on Dec. 24 of as many as 50,000 people, twice the size of the crowd estimated by police at a Dec. 10 rally to protest alleged fraud in the elections.

Gazprom, the world’s largest natural gas producer, fell 4.2 percent to $10.15 after shares on the Micex-RTS main market declined 2.5 percent to 166.05 rubles, or the equivalent of $5.17. One Gazprom ADR represents two ordinary shares.

The RTS Volatility Index, which measures expected swings in the index futures, rose for the first day in four, gaining 1.9 percent to 48.37 points. The Market Vectors Russia ETF, a U.S.- traded fund that holds Russian shares, fell for the seventh time in eight days, losing 2.6 percent to $26.10.

–Editors: Emma O’Brien, Glenn J. Kalinoski

To contact the reporters on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net Halia Pavliva in New York at hpavliva@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Check out the original source here.

By Leon Lazaroff and Halia Pavliva

Dec. 20 (Bloomberg) — Russia’s newly merged Micex-RTS exchange halted equity futures trading on its first day, sparking concern the Moscow bourse won’t be able to compete with global peers.

Futures expiring in March on the dollar-denominated RTS index in Moscow stopped trading about 12 minutes into the U.S. session yesterday due to a “technical problem,” Anton Storozh, a technical support specialist at the exchange said by phone from the Russian capital. Trading resumed 50 minutes before the end of the session, with the contracts sliding 1 percent to 133,350.

The world’s 10th biggest futures market, according to the Futures Industry Association, became part of Russia’s newly combined exchange yesterday after the Micex and RTS united in a bid to lure local companies and investors back to their home market. After halting trading more than 30 times in the second half of 2008, the Micex cut the number of stoppages to once in 2009 and five this year, according to spokesman Nikita Bekasov.

“It’s not a good start,” Luis Saenz, chief executive officer of the U.S. unit of Moscow-based brokerage Otkritie Financial Corp., said by phone from New York. “Investors have been complaining, wondering if this is what they should expect going forward, especially in this environment when there is already so much happening in Russia politically and otherwise.”

Otkritie handles about 38 percent of futures and options trading on the RTS, according to Saenz.

U.S.-traded shares of Russian companies also declined, with the Bloomberg Russia-US 14 Index slipping 3.1 percent to 87.03, the lowest level since Oct. 7.

‘Great Deal of Discomfort’

American depositary receipts of coal producer OAO Mechel plunged to a 2 1/2-year low as European Central Bank President Mario Draghi said “substantial downside risks” remain for the economy of Europe, which provided 19 percent of Mechel’s sales last year and is Russia’s largest trading partner.

The ruble-denominated Micex, which handles about 70 percent of equity transactions in Russia, and the dollar-priced RTS, which dominates derivatives trading, merged to get more of the share of “internal investing in Russia” and to lure more companies to list on the local market and undertake initial public offerings, Ruben Aganbegyan, president of the Micex-RTS, said in a Bloomberg Television interview conducted from Moscow on Dec. 16.

“We feel a great deal of discomfort because of this,” Bekasov, a spokesman for the merged Micex-RTS exchange said by phone from Moscow yesterday. The problems were caused partially by the “merger of two different technologies that have been used by RTS and Micex when the two exchanges developed independently. Those are similar technologies and yet they are different,” he said.

Shifting Listings

Calls to the Micex-RTS’ two customer technical support hotlines weren’t answered after hours in Moscow yesterday.

Polyus Gold International Ltd., Russia’s biggest gold producer, moved its primary listing to London from Moscow in November to gain access to foreign investors. OAO Phosagro, a Moscow-based fertilizer maker, sought approval from the Federal Financial Markets Service to allow 21.38 percent of its shares to be traded overseas, the company said in an e-mailed statement yesterday.

Mechel, which acquired its U.S. subsidiary Bluestone Coal Corp. in 2009, may move an IPO of its coal and iron-ore mining unit to New York next year after delaying a planned $2 billion sale in London in September. The deal may take place in April or May, three people with knowledge of the matter said, declining to be identified.

Rusal Declines

United Co. Rusal, the world’s largest aluminum producer, lost 1.6 percent to HK$4.81 in Hong Kong trading as of 1:23 p.m. local time. The MSCI Asia Pacific Index advanced 0.2 percent following a 1.8 percent slump yesterday.

Mechel stock fell 8.6 percent to $8.18 in New York, the lowest level since July 2009, while shares in Moscow fell 1.1 percent to 279.20 rubles, or the equivalent of $8.70. One Mechel ADR is equal to one ordinary share. Societe Generale cut its 12- month target price on Mechel’s ADRs to $20 from $34 yesterday, according to an e-mailed report.

OAO Gazprom slipped to the lowest level since Oct. 11 in New York trading as the Communist Party, which boosted its seats in Russia’s parliament to 92 from 57 in Dec. 4 Duma elections, called for higher taxes on the nation’s gas export monopoly.

Poll Majority

While suffering its worst electoral result since 2003, Prime Minister Vladimir Putin’s United Russia party retained a majority in the poll, which observers have described as being marred by violations such as ballot stuffing. Opposition political groups are preparing to stage a demonstration in Moscow on Dec. 24 of as many as 50,000 people, twice the size of the crowd estimated by police at a Dec. 10 rally to protest alleged fraud in the elections.

Gazprom, the world’s largest natural gas producer, fell 4.2 percent to $10.15 after shares on the Micex-RTS main market declined 2.5 percent to 166.05 rubles, or the equivalent of $5.17. One Gazprom ADR represents two ordinary shares.

The RTS Volatility Index, which measures expected swings in the index futures, rose for the first day in four, gaining 1.9 percent to 48.37 points. The Market Vectors Russia ETF, a U.S.- traded fund that holds Russian shares, fell for the seventh time in eight days, losing 2.6 percent to $26.10.

–Editors: Emma O’Brien, Glenn J. Kalinoski

To contact the reporters on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net Halia Pavliva in New York at hpavliva@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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At least 20 percent of U.S. pork producers had funds with MF Global, some of the 38,000 MF Global customers that had money with the company when it declared bankruptcy on Oct. 31 – the eighth largest bankruptcy in U.S. history

On Oct. 30, both Chicago futures exchanges were notified that MF Global had a material shortfall of nearly $1 billion.

The CME reported that early the next day, MF Global admitted transfer of $700 million from customer accounts to the broker-dealer and a loan of $175 million in customer funds to MF Global’s U.K. subsidiary to cover or mask liquidity shortfalls at the company, according to a summary on wikipedia, the online encyclopedia.

In written testimony submitted for the record to the Senate and House agriculture committees and the House Financial Services Committee, NPPC said most producers were unaware of their connection to MF Global and were stunned that their futures accounts were frozen and funds were “missing.”

Most, if not all, of the pork producers who had funds with MF Global did not deposit their funds directly there. They opened futures trading accounts with an “introducing” broker, which put the funds into MF Global, the NPPC said.

As much as $1.2 billion of customer funds may have been comingled with MF Global money and used to buy risky European debt, the NPPC said.

The pork producers asked Congress if they will be “made whole” by the return of their money. They also asked for priority in bankruptcy proceedings, should something similar happen again.

And, the NPPC asked for:

• Stiffer criminal and/or civil penalties for misuse of customer accounts.

• Requirements for brokers to get permission before using customers’ funds for purposes other than customer transactions.

• Customers insurance similar to that provided to securities investors through the Securities Investors Protection Corporation.

• Financial tests and additional audits of brokers and dealers by governmental and non-governmental entities.

Pork producers depend on risk-management tools such as futures contracts to deal with volatility in feed grain and hog prices, the NPPC said.

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December 19, 2011

Washington, DC – The Commodity Futures Trading Commission (CFTC) today issued a Final Order regarding the effective date for swap regulation. On July 14, 2011, the CFTC granted temporary exemptive relief from certain provisions of the Commodity Exchange Act that otherwise would have taken effect on July 16, 2011, the general effective date of title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act. On October 25, 2011, the CFTC proposed to extend the exemptive relief beyond the December 31, 2011, expiration date. Today’s Final Order addresses the comments received on the October 25, 2011, Notice of Proposed Amendment, and extends the potential latest expiration date of the exemptive relief to July 16, 2012.

Last Updated: December 19, 2011

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But the data from the Commodity Futures Trading Commission is only current through Dec. 13, and several market watchers said it’s possible the trend of cutting bullish exposure in the metals markets may continue when fresh reports are released at the end of the week. Most notably, Barclays Capital pointed out that gold crossed below the 200-day moving average on Wednesday, so the sell-off sparked when that technical level was crossed isn’t included in this data.

Reductions in net-long positions were seen in both the disaggregated and legacy weekly commitment of traders reports in all markets but in the legacy silver report, which showed a modest rise in the net-long position. The data encompasses both the futures and options activity combined at the Comex division of the New York Mercantile Exchange and the Nymex.

During the timeframe measured, most-active February gold futures contract on Comex lost $68.70 an ounce and settled at $1,663.10 on Dec. 13. Comex March silver fell 1.484 cents an ounce to settle at $31.260. January Nymex platinum dropped $31.70 an ounce to settle at $1,492.30 and March Nymex palladium lost $7.75 an ounce to settle at $664.15. Comex March copper slid 13.4 cents a pound to $3.4415.

Managed-money traders’ net-long position now stands at 135,117. They cut 13,656 gross longs and added 2,573 gross shorts. This is smallest net-long for speculators since mid-October. The producer and swap dealer categories showed these market participants added to gross long positions and cut gross shorts, lowering their respective net short position.

In the legacy report, large speculators, known as non-commercials, decreased gross longs by 15,955 contracts and raised gross shorts by 3,343 contracts, pushing down their net-long position to 163,169 contracts. Commercial traders increased gross longs and decreased gross shorts, shrinking their net-short position.

Commerzbank said the fall in speculators net-long positions “confirms our belief that the declining price of gold has been driven to a major extent by the futures market, for holdings of gold ETFs (exchange-traded funds) remain at very high levels.”

Managed-money accounts added to both gross longs and shorts in silver, but the number of new gross shorts outweighed new gross longs. That decreased their net-long for silver to 11,864. They raised gross longs by 428 contracts and added 1,019 gross shorts.

Producers in silver cut more longs than shorts, lifting their net short position and swap dealers added longs and cut shorts, lowering their net-short position.

Citi Global Futures said the funds net long exposure is historically small, which might mean a new cycle of buying could be starting; however, money managers in silver have a habit of just abandoning the silver market for extended periods.

The speculator category in the legacy silver report showed an increase in gross longs of 2,203 contracts and a rise in gross shorts of 1,426 contracts, meaning the net-long position for silver rose modestly to 17,802 contracts, bucking the trend seen in the disaggregated report and of other metals. Commercials lowered their net-short position in silver, having cut gross shorts and increased gross longs.

Activity by speculators was mixed in the platinum group metals. Both metals saw a drop in their net-long positions, but the method to reach that result was different. In the disaggregated report, managed-money accounts are now net-long 11,838 contracts in platinum, as they cut more gross longs than shorts.  In palladium, managed-money accounts added both gross longs and shorts, but added more shorts than longs, lowering the net-long to 5,334 contracts.

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