JP Morgan's craving for physical silver can't be denied based upon the current March COMEX silver delivery process. We're down to very little remaining open interest as the last day for delivery is close. While the delivery month played out as suggested earlier in the month, once the scope of JP Morgan's intentions became clear; nevertheless, it was a silver delivery month like none other in my experience. Of the 3,795 total silver deliveries issued, JPM stopped (took) 3,428 contracts, or 90%, - 2,689 contracts in its own name and another 739 for clients. Combined, JPM and its client(s) took control of another 17 million oz of physical silver this month in COMEX deliveries.
Putting aside the fact that there is a published COMEX delivery limit of no more than 1,500 silver contracts for any one trading entity -- and this is the highest amount, either in total contracts or by percentage of total deliveries I can recall, there is something else. Not only did JP Morgan bust down the door and say "Gimme that" loud and clear in terms of physical silver this month, I can't shake the feeling that the shorts who did deliver the physical silver struggled a bit in doing so, particularly as the month progressed. I base that on a variety of factors, like spread differentials, warehouse movements - both in terms of physical inflows and by category changes from eligible to registered.
Having already fully described the March COMEX silver delivery period as being the tightest I can recall, instead of simply repeating that, let me add this - I don't think the silver market could handle another delivery month as just witnessed. I am sure JP Morgan could buy and take delivery of another 17 million oz of silver many times over, but I can't see the shorts coming up with such quantities easily, or even at all. Yeah - I'm thinking about the walking dead. -- Silver analyst Ted Butler
