March Comex Silver "Deliveries"

41
Wed, Mar 29, 2017 - 11:25am

It seems that every few months, the charade of "physical delivery" on Comex becomes so outrageous that we feel compelled to write about it. Well here we are again today.

Before we get to the CME-reported numbers, let's start with the usual background...

What you need to know is that most of this is just a massive scam. Rarely is any actual, physical metal exchanged. Instead, the bi-monthly Comex delivery process is primarily a shuffle of paper warehouse receipts and warrants. Additionally, the parties to these exchanges of paper are usuallly The Banks themselves, acting in one seemingly endless circle jerk where one month Scotia "delivers" to HSBC and, the next month, HSBC turns around and "delivers" metals back to Scotia. It's been this way for years and it continues to this day.

And the volume of "deliveries" rarely changes, as well. For March, the initial amount of contracts still open and "standing" when the contract went off the board on February 27 was 7,299. Even at the conclusion of First Notice Day on the 28th, there were still 4,271 contracts still open. The delivery month is now complete and a total of 3,855 "deliveries" have been made. How does this compare to previous delivery months? It's about average. See below:

Delivery Month Total "Deliveries"

Dec 2014 2,975

Mar 2015 2,583

May 2015 2,840

July 2015 3,637

Sept 2015 1,555

Dec 2015 3,939

Mar 2016 1,356

May 2016 2,716

July 2016 2,474

Sept 2016 3,215

Dec 2016 3,980

Two-year average: 2,843

So, as you can see, the total amount of "deliveries" for March were not extraordinary by any means, though when compared to the previous to Marches, the 3,855 for March 2017 is above average. Regardless, let's dispel with the idea that suddenly there is some surge of physical demand for silver on the Comex for as you can see above, March 2017 was really no different from any other month in the past two years.

However, I do want to make note of two items and they both have to deal with The Major Power in Comex silver...JP Morgan. Not only does JP Morgan control about half of the total vaulted silver on the Comex, they only do so after nearly experiencing an extinction-level event back in 2011 when they were caught massively short paper silver with no physical silver with which to cover it. This led to the final short squeeze of April 2011 and all of the events that followed. In response and to prevent this from happening again, JPM was rushed through the approval process for their own Comex silver vault. See here: https://seekingalpha.com/article/259549-will-jpmorgan-now-make-and-take-...

In the years since, JP Morgan has amassed a stockpile of what is alleged to be physical silver in their Comex Vault. As of Monday, their total stockpile of registered and eligible silver stood at just over 94,000,000 ounces versus a total Comex vaulting structure of 191,488,871 ounces. That's just a shade over 49% and JPM now has enough silver to "physically settle" a short position of nearly 19,000 Comex contracts should they ever find themselves squeezed again.

How did JPM acquire all of this "physical silver"? Primarily through the Comex "delivery" process. Below are the year-end summaries for just 2015 and 2016 (click to enlarge). Note that the "house" or proprietary account of JPM is the primary stopper of "deliveries" nearly every month, to the tune of a NET 10,199 contracts. At 5,000 ounces per contract, that's just shy of 51,000,000 ounces of their current 94,000,000 ounce warchest.

And this continued during the just-completed March "delivery" month. As you can see below, of the stated 3,855 "deliveries", the proprietary account of JPM stopped a total of 2,689 for nearly 70%. That's another 13.5MM ounces added to the stockpile for use in the event of another paper metal short squeeze.

Lastly, just one other item of note. Since there is a stated position limit of just 1,500 contracts for each front/delivery month, you might be asking yourself how JPM gets away with stopping far more than that number. If you go back and look at the 2015 and 2016 tables above, note that they seem to adhere to these limits each month. So why and how did they manage to stop 2,689 in March? That's a good question so I took the time yesterday to submit a formal complaint to the CFTC:

Given my past experience in dealing with the CFTC, in no way do I expect any aggressive action from this neutered and fully-controlled agency. Instead, I just thought it would be fun to see if I heard anything back from them at all. Will I even get a response? I can tell you that, so far, I haven't even received one of those "thank you for writing us, we'll look into it" emails so it's not looking good. However, if I do eventually hear from them, I'll be sure to write follow-up to this post.

Thanks for reading and thanks for taking the time to understand some of the forces aligned against you in the Bullion Bank Paper Derivative Pricing Scheme.

TF

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  41 Comments

SilverBelle
Mar 29, 2017 - 11:27am
forever20
Mar 29, 2017 - 11:29am
billhilly
Mar 29, 2017 - 11:32am
ArtL
Mar 29, 2017 - 11:35am

The tide is coming back in for PM prices

Ag and Au prices ebb and flow, just like the tides.

onesong
Mar 29, 2017 - 11:42am
Mickey
Mar 29, 2017 - 11:48am

just a thought

silver or gold-if we have the double and triple etfs, both upside and downside--where nothing is delivered, ever, are we the investors part of the problem ?

I am talking about AGQ and USLV (and perhaps some others on the silver side) and DGP and UGLD on the gold side.

We know ther is The ZSL, 2x inverse and AGQ, the 2x--do these just create a lot of open contracts and does ZSL have to put up silver to go short? Or do they even use traders futures or do they use private swaps.

If we did not have the double triple or the single etfs, then I think if we wanted gold or silver you have to buy physical, unless PHYS and PSLV is good enuf, although better than the others.

SilverBelle
Mar 29, 2017 - 11:57am

Westinghouse files for Chapter 11 Bankruptcy protection

Could be nothing ... could be something. I've read the Trump administration views the filing as a "concern" and a potential "national security issue."

Huge nuclear cost overruns push Toshiba's Westinghouse into bankruptcy

By Tom Hals, Makiko Yamazaki and Tim Kelly

ReutersMarch 29, 2017

The Vogtle Unit 3 and 4 site, being constructed by primary contactor Westinghouse, a business unit of Toshiba, near Waynesboro, Georgia, U.S. is seen in an aerial photo taken February 2017. Georgia Power/Handout via REUTERS/File Photo

By Tom Hals, Makiko Yamazaki and Tim Kelly

WILMINGTON, DEL./TOKYO (Reuters) - Westinghouse Electric Co, a unit of Japanese conglomerate Toshiba Corp, filed for bankruptcy on Wednesday, hit by billions of dollars of cost overruns at four nuclear reactors under construction in the U.S. Southeast.

Bankruptcy will allow Pittsburgh-based Westinghouse to assess whether to continue construction of the first new U.S. nuclear power projects in three decades for utility companies SCANA Corp and Southern Co. The company also provides nuclear design, engineering and decomissioning work around the globe, and said in court filings that its nuclear fuel and power plant servicing operations are "very profitable."

Westinghouse and affiliates intend to use bankruptcy to "isolate them from the one specific area of their businesses that is losing money: their construction of nuclear power plants in Georgia and South Carolina," the company said in a filing in Manhattan's U.S. Bankruptcy Court.

For Toshiba, the filing will help keep the parent company afloat and ringfence it from soaring liabilities from Westinghouse. Toshiba said Westinghouse-related liabilities totalled .8 billion as of December, making it one of the industry's most costly collapses to date.

The bankruptcy will trigger complex negotiations between the Japanese conglomerate, Westinghouse and the utility companies, which are among the main creditors. It could also embroil the U.S. and Japanese governments, given the scale of the collapse and the .3 billion in U.S. government loan guarantees that were provided to help finance the reactors.

More at link:

https://www.yahoo.com/news/toshiba-approves-chapter-11-filing-nuclear-un...

A local perspective at this link:

https://triblive.com/business/headlines/12131864-74/westinghouse-files-for-bankruptcy-protection

pbfurn
Mar 29, 2017 - 12:09pm

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Lurkerpbfurn
Mar 29, 2017 - 12:20pm

Dave Kanzler does

excellent analysis. His third black swan, the fact that pension funds need the stock market to go up, is precisely why the stock market will be manipulated upwards until it can't be manipulated any more. TPTB cannot afford a negative stock market event. Ultimately, the manipulation and money printing will result in hyperinflation, and the pensioners will be paid their defined benefit in inflated dollars.

Fatso
Mar 29, 2017 - 12:30pm

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