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The dollar index is sharply lower on March 20 and this is causing most commodities to get a bid.

Soybeans:

May soybeans lost 3.25 cents on volume of 196,207 contracts. Volume exceeded that of March 18 when May soybeans gained 10.50 cents on volume of 187,424 contracts and total open interest increased by 5981 contracts. On March 19, total open interest increased by 3,246 contracts, which relative to volume is approximately 35% less than average. The May contract lost 3,588 of open interest.

As this report is being compiled on March 20, May soybeans are trading 16.50 cents higher and have made a daily high of 9.80, which is a shade below yesterday’s high of 9.80 1/4. On March 20, the dollar index is trading sharply lower and this is giving a boost to commodities across the board. May soybeans remain on the short and intermediate term sell signal. Before recommending bearish positions we want to take a look at today’s open interest.

Soybean meal:

May soybean meal lost $1.50 volume 68,922 contracts. Total open interest declined by 2,730 contracts, which relative to volume is approximately 55% above average meaning that liquidation was fairly substantial considering the minor decline. As this report is being compiled on March 20 May soybean meal is trading 5.90 higher. May soybean meal remains on the short and intermediate term sell signal.

Corn:

May corn lost 1.25 cents on volume of 258,224 contracts. Total open interest increased by massive 18,976 contracts, which relative to volume is approximately 185% above average meaning that a battle ensued between buyers and sellers and sellers were able to edge the market slightly lower. There were open interest increases from May 2015 through December 2016. As this report is being compiled on March 20, May corn is rallying sharply, up 10.50 cents.

With the massive build of open interest during the past several days, we suspect that most of the buying on March 20 is due to short covering rather than new longs. One factor to keep in mind is that Kansas City wheat is going to generate a short-term buy signal if its daily low holds, and Chicago wheat may generate a short-term buy signal on Monday. This should give corn a boost. May corn remains on a short and intermediate term sell signal.

Kansas City wheat: If the low of 5.48 1/2 holds on March 20, May Kansas City wheat will generate a short-term buy signal.

May Kansas City wheat lost 2.75 cents on volume of 32,796 contracts. Total open interest declined by a massive 2,724 contracts, which relative to volume is approximately 230% above average meaning that liquidation was heavy on the modest decline.As this report is being compiled on March 20, May Kansas City wheat is trading 17.50 cents higher. Once the buy signal is generated, the market should pull back from 1-3 days and this is the opportunity to initiate bullish positions if you are so inclined.

Chicago wheat:

May Chicago wheat gained 1.25 cents on volume of 92,869 contracts. Total open interest increased by 967 contracts, which relative to volume is approximately 50% below average. However, May lost 265 open interest, July 2015 -188, which makes the total open interest increase more impressive (bullish). For the past three days beginning on March 17, the open interest action in May Chicago wheat has been acting in a bullish fashion: open interest increases on price advances and declines with price.

As this report is being compiled on March 20, May Chicago wheat is trading 17.00 cents higher and has made a daily high of 5.30, which is the highest print since 5.29 3/4 made on the February 19.May Chicago wheat will generate a short-term buy signal is the daily low is above OIA’s key pivot point for March 20 of 5.13 1/8.

Live cattle:

June live cattle gained 1.75 cents on heavy volume of 72,673 contracts. Total open interest increased by 3,202 contracts, which relative to volume is approximately 70% above average meaning that aggressive new buyers were entering the market in large numbers and driving prices to a new high for the move (1.50825).The April contract lost 4,619 of open interest, which makes the total open interest increase more impressive (bullish).

As this report is being compiled on March 20, June live cattle is trading 50 points lower and has not taken out yesterday’s high. In order for an intermediate term buy signal to be generated, the low of the day must be above OIA’s key pivot point for March 20 of 1.50400.

WTI crude oil:

May WTI crude oil lost $1.12 on volume of 731,792 contracts. Total open interest declined by 13,134 contracts, which relative to volume is approximately 25% below average. The April contract lost 30,932 of open interest. As this report is being compiled on March 20, the May contract is trading 1.68 higher and has made a daily high of 47.43. On March 11 May WTI crude oil generated a short-term sell signal and has been on an intermediate-term sell signal. Rallies look like selling opportunities, however if the dollar continues to pull back we should see continued strength in commodities across the board.

Brent crude oil:

May Brent crude oil lost $1.48 on light volume of 561,545 contracts. Total open interest increased by 7,176 contracts, which relative to volume is approximately 45% below average. The May contract accounted for a loss of 6,218 of open interest. Note the difference between the open interest action in Brent and WTI. As this report is being compiled on March 20 May Brent is trading 73 cents higher while May WTI is trading 1.78 above yesterday’s close.

Natural gas:

April natural gas lost 10.7 cents on volume of 407,528 contracts. Total open interest declined by 5,094 contracts, which relative to volume is approximately 45% below average. The April contract lost 13,926 of open interest. As this report is being compiled on March 20, natural gas is one the few commodities not trading on the plus side. Stand aside.

Gold:

April gold gained $17.70 on volume of 174,618 contracts. Total open interest increased by 5,994 contracts, which relative to volume is approximately 50% above average meaning that aggressive new buyers were entering the market and pushing prices higher (1177.00). As this report is being compiled on March 20 April gold is trading $15.70 above yesterday’s close  and has made a daily high of 1187.40. In order for April gold to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for March 20 of 1195.90. Stand aside.

Silver:

May silver gained 57.3 cents on volume of 43,681 contracts. Total open interest declined by 2,175 contracts, which relative to volume is approximately 100% above average meaning that liquidation was extremely heavy on strong advance. As this report is being compiled on March 20, May silver is trading 74.1 cents above yesterday’s close and has made a new high for the move at 16.885. In order for May silver to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for March 20 of $16.403. Stand aside.

Dollar index:

The June dollar index gained 80.3 points on volume of 98,151 contracts. Total open interest declined by 6,772 contracts, which relative to volume is approximately 175% above average meaning that huge numbers of market participants were liquidating on the rally, and this was fueled by distressed short-sellers. As this report is being compiled on March 20, the June dollar index is trading 1.739 points lower on the day. Stand aside.

Coffee:

May coffee gained 4.10 cents on heavy volume of 36,672 contracts. Volume was the strongest since March 4 when May coffee gained 7.80 cents on volume of 41,715 contracts and total open interest increased by 2,694 contracts.On March 19 total open interest declined by a massive 2,927 contracts, which relative to volume is approximately 220% above average meaning huge numbers of market participants were liquidating as coffee moved to a new high for the move of 1.4675 and closed at 1.4415.

As this report is being compiled before the close, May coffee is trading 1.50 lower on the day. The massive decline of open interest is the first indication that short sellers are getting nervous about their positions. However, we want to see open interest increases on price advances. In order for May coffee to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for March 20 of 1.4400. Stand aside.