Market Curiosity: Exploring Markets And Systems

March 1, 2011

Silver, backwardation update on March 1: LBMA 13 days, COMEX (partial) 19 days (corrected)

Filed under: Just Watching — Tags: , , , , , , , — Jeff Fitzmyers @ 12:44 pm

Ed Steer: The CME’s Daily Delivery Report shows that 120 gold, along with 42 silver contracts were posted for delivery tomorrow. This is the second delivery day in the March silver contract…and to only have 294 contracts posted for delivery out of the current 4,250 contracts still open in March, is truly incredible.

Silver analyst Ted Butler had this to say about it in his weekly review to clients on Saturday…”Offsetting the relatively small number of open contracts in March [4,250] is an even smaller number of contracts offered on the first notice day of 252 contracts. [Of special note is that JPMorgan didn’t issue any silver deliveries, unlike their pattern over the past two years.] This is about the smallest number of contracts tendered in my memory for what is usually the heaviest day for deliveries in any physical commodity, including silver…as it makes little economic sense for those shorts intending to make delivery to delay beyond the first delivery day…this is another indication of wholesale physical tightness.”

Mr Steer also reports the US mint sold 9,662,000 silver eagles in the first 2 months of 2011. That is 25% of what the COMEX supposedly has available for delivery.

SilverGoldSilver just pointed out an Eric Sprott interview: (The article has a number of large inaccuracies. Like “In the silver market, there is enough silver..” True for any market. The question is ‘at what price?’ But one interesting tidbit is supposedly solar panel construction used 64,000,000 ounces last year. That’s a lot!)
+ Took 10 weeks to take delivery of 15,000,000 ounces Ag and some of the bars were just 2 weeks old.
+ For the first 2 months this year, the US mint sold the same dollar amount of silver coins as of gold coins.

UPDATE March 3: I have some mistakes on the chart. This one is correct. The following 2 not correct. A similar price rise for 2011 targets 38 $/oz.

Still looking for an effective way to present this data… Just the fact that the mid points almost match (at least so far) is interesting.

Another try in data visualization

The COMEX partial backwardation continues with the front month 1.17 $/oz more expensive than December 2015.

References
+ Silver backwardation update on Feb 28th: LBMA 12 days, COMEX (partial) 18 days, both about the same

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