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Soybeans:

May soybeans lost 12.50 cents on volume of 220,223 contracts. Total open interest declined by 5,452 contracts, which relative to volume is average. The March contract account for lost 11,536 of open interest. Yesterday, May soybeans made a high of 10.16, and as this report is being compiled on February 19, May soybeans have made another new high at 10.20 3/4.

In order for May soybeans to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for February 19 of 9.97 1/2. The low thus far on February 19 has been 9.96 3/4. Clients should note that on a seasonal basis, soybeans and soybean meal tend to rally during the period immediately ahead.We have no recommendation.

Soybean meal: May soybean meal will generate a short-term buy signal on February 19. The low of the day has been 331.00, which is above OIA’s key pivot point for February 19 of 330.00.

May soybean meal lost $3.70 volume of 89,697 contracts. Total open interest increased by 494 contracts, which relative to volume is approximately 70% below average.The March contract lost 7328 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in March.

As this report is being compiled on February 19, May soybean meal is trading $9.60 higher, or +2.99% versus soybeans trading +1.80%. Yesterday, we recommended that clients liquidate their bearish positions and moved to the sidelines. Bearish positions were recommended in the January 5 report and were highly profitable. At this juncture, we have no recommendation.

Corn:

May corn lost 5.75 cents on volume of 298,824 contracts. Total open interest declined by massive 18,155 contracts, which relative to volume is approximately 120% above average meaning that liquidation was extremely heavy in yesterday’s trading. The March contract account for a loss of 36,090 contracts. As this report is being compiled on February 19, May corn is trading 6.00 cents higher and has made a daily high of 3.99. In order for a short term buy signal to be generated, the low of the day must be above OIA’s key pivot point for February 19 of 3.95 7/8. Stand aside.

WTI crude oil:

April WTI crude oil lost $1.47 on volume of 865,922 contract. Total open interest declined by 9,456 contracts, which relative to volume is approximately 45% less than average. The March contract accounted for loss of 23,864 open interest. As this report is being compiled on February 19, April WTI is trading 37 cents lower and has made a daily low of 49.82, which is below yesterday’s low of 51.00.On February 13, April WTI generated a short-term buy signal, but remains on intermediate term sell signal. Usually after the generation of a buy signal, the market has a tendency to pull back from 1-3 days, and the decline on February 19 represents the second day of  the pullback. Although the EIA stats are bearish, we think the market has largely discounted storage builds and a test of the highs is likely. Stand aside.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.7 million barrels from the previous week. At 425.6 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 0.5 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories decreased by 3.8 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories fell 3.5 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories decreased by 0.8 million barrels last week.

Brent crude oil:

April Brent crude oil lost $2.00 on light volume of 600,260 contracts. Total open interest declined by 1,212 contracts, which is minuscule and dramatically below average. The April contract lost 11,194 open interest. As this report is being compiled on February 19 April Brent is trading 12 cents higher after making a daily low of 57.80, which is the lowest print since February 12 (56.07). April Brent made a high of 63.00 on February 17 and we expect a test of this high in the coming days. April Brent crude oil generated a short-term buy signal on February 3, but remains on intermediate-term sell signal. Stand aside.

Heating oil:

April heating oil lost 3.49 cents on volume of 204,660 contract. Total open interest declined by 1,434 contracts, which relative to volume is approximately 65% below average. The March contract accounted for loss of 10,158 of open interest. As this report is being compiled on February 19, April heating oil is trading 1.05 cents higher after making a daily low or 1.8258, which is below yesterday’s print out 1.8520. On February 17, heating oil made a high of 1.9940 and we expect a test of this high in the coming days. On February 3, heating oil generated a short-term buy signal, but remains on intermediate term sell signal. Stand aside.

Gasoline:

April gasoline lost 2.26 cents on volume of 193,434 contracts. Total open interest declined by 461 contracts, which is miniscule and dramatically below average. The March contract accounted for loss of 9,422 of open interest. As this report is being compiled on February 19, April gasoline is trading 2.50 cents higher after making a daily low of 1.7535, which is below yesterday’s print of 1.7957. On February 3, gasoline generated a short-term buy signal, but remains on intermediate term sell signal.

Gold:

April gold lost $8.40 on volume of 130,285 contracts. Total open interest increased by 1,502, which relative to volume is approximately 45% below average, however an open interest increase on yesterday’s price decline is bearish. This is the second day in a row in which prices have declined and open interest has increased. As this report is being compiled on February 19, April gold is trading 6.90 higher after making a high on February 19 of 1222.90. The reason for the rally was the approval by the Indian government to eliminate the import tax on gold. However, the rally fizzled out, and we think an intermediate term sell signal is on the horizon.On February 9, April goal generated a short term sell signal. Stand aside.

Silver: On February 18, March and May silver generated short-term sell signals, but remain on intermediate term buy signals.

March silver lost 11.3 cents on volume of 77,377 contracts. Total open interest declined by a massive 4,021 contracts, which relative to volume is approximately 105% above average, meaning that liquidation was extremely heavy on the modest decline. Accounting for the total open interest decline was the March contract, which lost 12,069 of open interest.As this report is being compiled on February 19, March silver is trading 11.5 cents higher after making a high of 16.770, which is above OIA’s key pivot point for February 19 of 16.649 for the generation of an intermediate term sell signal. The high of the day must be below the pivot point. Stand aside.

Cocoa:

May cocoa gained $31.00 on volume of 25,846 contracts. Total open interest increased by 2,866 contracts, which relative to volume is approximately 340% above average meaning that large numbers of new buyers were entering the market and driving prices to a new high for the move (2976). As this report is being compiled on February 19 after the close, May cocoa has made another new high of 2985, and has closed $3.00 higher on the day.The market remains massively overbought, and we recommend a sideline stance.On February 12, OIA announced that May cocoa generated a short-term buy signal and generated an intermediate term buy signal on February 17.

Coffee:

May coffee lost 1.90 cents on heavy volume of 48,082 contracts. Volume fell from the 73,488 contracts traded on February 17 when May coffee lost 7.65 cents. On February 18, total open interest increased 293 contracts, which relative to volume is approximately 65% below average, however the March contract lost 7,066 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in March. This is bearish open interest action relative to the price decline.

As we said in yesterday’s report this indicates that new short sellers are willing to enter the market at very low prices without fearing a counter trend rally. Down the road, these short-sellers will become the new distressed buyers as they cover positions and send coffee prices significantly higher. The collapse of the Brazilian real against the dollar has hurt the coffee market, however exports are robust, which sets the stage for a shortfall in supplies later on. As this report is being compiled on February 19 after the close of the coffee market, the May contract has closed at 1.5265, down 4.30 cents. Today, is first noticed day for the March contract. May coffee remains on a short and intermediate term sell signal. Stand aside.