March Comex Silver "Deliveries"

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-delivery-of-its-own-silver-shorts

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

www.tfmetalsreport.com/subscribe

42 Comments

SilverBelle's picture

Something to think about

http://i.imgur.com/6hGVTrQ.jpg

billhilly's picture

Sliver !

onesong's picture

The silver one is mine...

?u=https%3A%2F%2Ftse4.mm.bing.net%2Fth%3

forever20's picture

Why the juice and goose is back in operation

,

ArtL's picture

The tide is coming back in for PM prices

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

Mickey's picture

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's picture

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

973af590-e89a-11e6-b294-9bc8096ac008_reu

By Tom Hals, Makiko Yamazaki and Tim Kelly

ReutersMarch 29, 2017

The Vogtle Unit 3 and 4 site, being constructed by primary contactor Westinghouse, is seen near Waynesboro

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 $9.8 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 $8.3 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-unit-westinghouse-023954576--sector.html

A local perspective at this link:

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

Lurker's picture

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's picture

Brexit Gets Real

tyberious's picture

Unravelling of complexity,,,

Unravelling of complexity,,, vaporization of capitalization

Tainter wrote a very good book about the collapse of complex societies. The more complex the society,,, the more effort it took to hold it all together. The failing society peels off layers of complexity like peeling an onion. Modern society has definitely reached some kind of pinnacle of complexity. The problems in one area affect the problems in other areas.
oftwominds-Charles Hugh Smith: The Overlapping Crises Are Coming, Regardless of Who's in Power
" No leader can reverse the dynamics of mutually reinforcing crises. No one can reverse the diminishing returns on financialization, debt, centralization, financial fakery, rentier state-cartel parasitism, or reverse the decline in paid work, the erosion of well-being and health and rising inequality.
There is no way to actually forestall the reckoning as the forces of demographics, financial predation, Imperial over-reach, soaring debts, political disunity, technology disruption and the failings of state-cartel centralization grind up the status quo."

Globalism is going into reverse since people have no money; https://mishtalk.com/2017/03/28/more...y-yields-fall/

"On the first day of March 2017, the combined market capitalization of U.S. nonfinancial and financial stocks reached $34 trillion. Those trillions of dollars in paper wealth filter down to the investment statements of millions of investors, reflected in quotes on computer screens and blotches of ink on paper. Over the completion of the current market cycle, we estimate that roughly half of U.S. equity market capitalization - $17 trillion in paper wealth - will simply vanish. Nobody will “get” that wealth."
"By contrast, an expected 50% loss of U.S. equity market capitalization over the completion of this market cycle (a decline that would not even bring historically reliable valuation metrics below their long-term historical norms), would produce an expected loss of over $25 trillion in U.S. total private net worth."
https://www.hussmanfunds.com/wmc/wmc170327.htm

The takeaway from all of this is; nobody will have any money to spend.
The dollar is sinking. It remains to see just how far, https://dailyreckoning.com/dows-drop...ominous-chart/

tyberious's picture

Cryptocurrencies — (Abstracti

Cryptocurrencies — (Abstraction Squared)

"expected loss of over $25 trillion in U.S. total private net worth."
This is notional wealth. You can't actually handle it over to another person. If $25 trillion can just disappear, why can't $26 trillion disappear? With a cascade of default, what instrument is going to have value? What will inspire confidence?
Exeter's Pyramid illustrates the preference of value, The Exter Inverted Pyramid - A Refresher | Zero Hedge

Paper money is there just below gold and quite a ways from diamonds. Paper money is a demand note,,, a bearer bond. It has a huge utility value.

Where, exactly do cyrpto-currencies fit in?
"What is money? and why do we need it? In this section, I will show why any free society is simply a system to organize a division of labor and cooperate for the purpose of achieving an energy surplus (also known as prosperity). Money is simply the signal which most closely mirrors the state of energy surplus or prosperity. The contiguous and growing stock of Money is the sum total of human prosperity"
"Given enough time, the humans will always figure out the need to organize into a cooperative system (society) that maximizes the usage of energy in order to withstand the forces of entropy."

"If the system of accounting fails and there is a loss of energy surplus, the society will succumb to entropy and will fail on its primary objective: reproduction."
"Throughout the course of history we have seen many attempts at forms of money which have succeeded in being a unit of account, medium of exchange, or both, but we have never witnessed anything other than precious metals withstand time as a store of value while simultaneously being a unit of account and medium of exchange."
"Over the course of time, however, entropy will easily render abstract accounting systems as obsolete. Just as an empty sack can’t stand upright, an accounting system based on abstract and individual human qualities will fail."

"What is so special about these precious metals is that they are a product of nature. They are not abstractions which can change with time. "
"It is no surprise then that only 8 years following the creation of bitcoin, we now have 669 cryptocurrencies. These cryptocurrencies are presently valued at $23.5 Billion and trade nearly $900 million a day. But what are these abstractions ultimately achieving aside from enabling speculative fervor?"

" But their being a store of value will always rely on the exchangeable value rising requiring the continuous inflow of capital at an increasing rate of change over time."
"Since 2009, Bitcoins share of the total market value of cryptocurrencies has dropped from 100% to 72.5%. We have seen entropy take its toll on the original rigid rules of Bitcoin "
"n this essay, I have set out to prove that money must follow the natural order of things and that abstract concepts of money not inexorably linked to nature will inevitably fail as money."

"onversely, blockchain and cryptocurrencies, being a human abstraction, have no value at rest. There is no need to “store” them for the future aside from two potential catalysts:"
https://medium.com/@roysebag/the-nat...l-aad5f9f8cf89

Turd Ferguson's picture

Some good news

MODERATOR

Be sure to note that the Long Bond is back under 3.00% today after briefly spiking yesterday.

Turd Ferguson's picture

the Long Bond since Mother

MODERATOR

New lows below 2.96% coming soon?

Response to: Some good news
Turd Ferguson's picture

And this is encouraging

MODERATOR

Both Comex Digital Metals wrapping up their trading session very near their respective highs for the day.

scoremore's picture

Metal US futures scoreboard

Metal                YTD          1YR         3YR

Silver               13.68%     19.89%   -8.06%

Gold                  8.85%        2.12%    -3.16%

Platinum          5.64%       -1.08%   -32.37%

Palladium         15.39%     39.35%   2.01%

Silver just keeps chugging up.

What is going on with Palladium? Is their room for it to continue at this pace? Incredible.

infometron's picture

The Admiral sets sail from Barkerville

Selling his >16% interest to Osisko Royalty, keeping ~1% in warrants...

https://ceo.ca/@marketwired/early-warning-release-ee2df

How will he redeploy this capital?

Must be nice!!

garth's picture

The Long Bond since Mother

In the interview with Mr Alasdair, didn'the say that the bond % had no reason to come down?  If I heard that correctly, was there something incorrect about his reasoning?  

Real Money's picture

Cot Report

Hey Turd,

How do we know that the numbers that are published in the C.O.T. report are even remotely Accurate.  If you think about it

since every government number is bullshit these days and the COMEX is in bed with the banks.  How do we know that their isn't extreme pressure

built into the metals markets because the numbers are manipulated.  I know Andrew touched on this.  What are your thoughts

infometron's picture

Re: The Unravelling of Complexity

@Ty's post above reminded me of David McAlvany's excellent interview with Tainter

https://mcalvanyweeklycommentary.com/complexsocieties/

It was a while back but still totally relevant

@Turd, it's been quite a while since you've had McAlvany on for A2A... (hint hint)

Turd Ferguson's picture

No that's exactly right

MODERATOR

I report them every week on the "legacy" basis but I'll NEVER waste the time to pour over the disaggregated report and all the potential bullshit of the "swap dealers" and "hedgers".

It's garbage and JPM has been repeatedly fined in the past for consistently submitting false information. See here: 

Not only that, who's to say that some "Large Specs" aren't simply a few of the offshore private accounts that JPM runs to cover their tracks? Recall this is some of the information provided by the two whistleblowers back in 2012.

So, again, in summary...We'll continue to monitor the aggregated or "legacy" CoT and look at it as a historical reference. However, anyone who takes the CoT as some be-all-end-all honest reporting of summary positions is either hopelessly naive or just plain stupid/lazy.

Response to: Cot Report
Turd Ferguson's picture

Mother hiked exactly two weeks ago

MODERATOR

Seems longer ago than that...

Regardless, you might note that CDS is hands down the best performing asset in the 10 trading days since, now UP over 8%.

brolgaboy's picture

non-day

who decided that absolutely nothing was going to happen today?

brolgaboy's picture

opps!

okay I forgot to mention the very positive price action on Eldorado Gold.

Seems things are advancing in Greece!

onesong's picture

Kirkland Lake also...

having a nice day!

billhilly's picture

and...

...NGD too !  Up 4 %

Looking at T's Silver chart above, there just hasn't been any coverage periods for the shorts.  It has probably caught them off guard...hmmm, maybe some fireworks ahead !

canary's picture

Non-day in Options an FND week...is a very good day

   I wish we have two more 'non days' this week...smiley And I do pay more and more attention to silver.

silver10sguy's picture

Thank You Turd

We have endured so much over the years.   My stress levels are much better than previous years and did not know silver was up over 8% since Mother's BS 2 weeks ago.  Thanks Turd for all you do to keep us on track and in the know.  

Dr. P. Metals's picture

Curious

don't have charts where I am what is AG stock up over that same time? Seems like a big divergence still?

chudson's picture

Is Gartman retarded or just stupid ?

Long. Short. Long. Short. Long. Short.

Changes Daily !!

Does he know he looks retarded ?

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