Silver Backwardation Eases Slightly, Open Interest Remains Near 110,000

Silver's backwardation has eased very slightly since our last update, but back months remain in significant backwardation.
Front month (Sept 11) silver settled Tuesday at 40.081, and front months settled in contango through the Jan 2013 contract.  Silver now enters backwardation with the March 2013 contract, with backwardation increasing from the March 2013 contract on out, culminating in a $1.413 (3.5%) discount on the farthest out contract of July 2016, which settled at 38.688. 
While its clear that silver traders remain concerned about the liklihood any silver will remain on the COMEX to satisfy deliveries 4-5 years from now (hence the significant backwardation or discount to front months), we believe that when the long awaited physical default is imminent, we will see significant backwardation in ALL MONTHS, signaling the end is near.
This is excellent news for silver bugs and physical metal accumulators, as it indicates that while rapidly dwindling, time remains to continue accumulating the phyzz.

Daily Settlements for Silver Futures (PRELIMINARY)Trade Date: 09/20/2011

Month						Settle	Estimated Volume	Prior Day Open Interest
SEP 11						40.081	119	272
OCT 11						40.087	686	478
NOV 11						40.109	1	31
DEC 11						40.137	39,334	74,359
JAN 12						40.160	10	155
MAR 12						40.171	301	9,090
MAY 12						40.182	20	2,639
JLY 12						40.187	29	2,020
SEP 12						40.158	16	596
DEC 12						40.119	215	10,219
JAN 13						40.091	-	1
MAR 13						40.036	-	720
MAY 13						39.974	-	100
JLY 13						39.913	25	2,200
DEC 13						39.790	72	7,400
JLY 14						39.548	-	247
DEC 14						39.410	1	1,242
JLY 15						39.128	-	161
DEC 15						38.913	1	539
JLY 16						38.688	-	21
Total							40,830	112,490