Corn:
May Chicago corn closed 2 1/2 cents higher on volume of 232,763 contracts. Open interest increased by 4,174 contracts. The market reached a new low for the move at $6.36 3/4, per bushel and the May-July spread widened to 1 3/4 cents premium to May. The fact that May is holding its premium to July continues to be a bullish factor. In my March 18 Weekend Wrap, I did an analysis of the history of that spread going back nearly 40 years. The low of $6.36 3/4 was the lowest price for corn since March 9 when corn dipped to $ 6.31 3/4. After the market reached its low, it rallied smartly to close in positive territory at $6.44 1/2. The pivot point on the downside is $6.33 3/8. A penetration of that point would be negative, and if the daily high is below it, a sell signal will be generated.
Wheat:
In the post of March 21, I stated that if the daily high in the wheat market was no greater than $6.43 5/8 pivot point, a sell signal would be generated. When I wrote that post, it was March 22 and the high for wheat at the time was $6.42 1/2. Later that day, the market rallied and made a high of $6.47 1/2, which negated any possibility of a sell signal on March 22.
Soybeans:
May soybeans closed 5 1/2 cents lower on volume of 173,135 contracts. Open interest increased by 748 contracts. The market continues to act in a very bullish fashion. Stand aside.
Sugar #11:
May New York sugar closed 58 points higher on fairly light volume of 101,509 contracts. However, open interest increased by a massive 6,264 contracts. The market made a new closing high of 25.91 cents per pound, which was above the high of 25.81 cents made on February 27, 2012. This is a very bullish development, and as I said in a recent post the market needed to close over 25.81 to continue the move higher. There have been a couple of setbacks that would have allowed speculators to put on long positions. Stay long, with stops at 25.21, which was the low for March 19, or at 25.04, which was the low on March 16.
Crude oil:
May New York crude oil closed $1.92 lower on light volume of 539,283 contracts. Open interest declined by 7,820 contracts. The market made a low for the day at $104.50.The previous low of $104.43 was made on March 15, 2012 and the low previous to that was $104.88 made on March 7, 2012. Going back further, the next low was made on February 17, 2012 at $103.07. It is apparent the market is well supported in the $104.00 area. In the weekend wrap of March 25, I will do an open interest analysis of crude oil during its period of consolidation beginning in late February.
Gasoline:
May gasoline closed 1.95 cents lower on fairly heavy volume of the 171,965 contracts. Open interest declined by 2,968 contracts. Stand aside.
Gold:
April gold closed $7.80 lower on volume of 204,513 contracts. Open interest declined by 3,261 contracts. The market reached a new low for the move at $1627.50 per ounce. Gold continues to be on a sell signal, but this should used as an opportunity to acquire long positions at lower prices.
Silver:
May New York silver closed $.88 lower on volume of 56,606 contracts. Open interest increased on the decline by 1,417 contracts. The market made a new low for the move at $31.09 per ounce, which was the lowest price since January 20, 2012 when the market made a low of $30.37 per ounce. Additionally, the market broke a low of $31.60 that was made on January 25. On the two days that silver has declined precipitously, open interest has risen significantly on both occasions. On March 20 silver lost $1.21 and open interest increased by 3,154 contracts. In short, silver has declined by $2.09 and open interest has increased a total of 4,571 contracts. This is bearish. Despite the poor price and open interest action, silver has not generated a sell signal. Stand aside.
Euro:
The June euro closed 22 points lower on volume of 243,947 contracts. Open interest increased by 4,527 contracts. Use the high of 1.3299, which was made on March 8 to liquidate bearish positions.
S&P E mini:
The June S&P 500 E mini closed 8.50 points lower on volume of 1,684,841 contracts. Open interest increased by 5,770 contracts. Long put protection should be in place.
Interest Rates:
The 10 year treasury note closed 5 1/2 points higher on volume of 1,151,318 contracts. Open interest declined on the rally by 14,931 contracts. The market has rallied from a low of
127-26.5 on March 21 to a high of 128-31 on March 22 and open interest has declined a total of 23,035 contracts. This is bearish price and open interest action. As previously recommended, bearish positions should be implemented in the 128-28 to 129-15 area.
E-mail any question or comment to: garry@openinterestanalyst.com
