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Soybeans:

May soybeans gained 5.25 cents on volume of 226,710 contracts. Total open interest increased by 3,532 contracts, which relative to volume is approximately 40% below average. The, March contract accounted for loss of 5,246 of open interest, which makes the total open interest increase more impressive (bullish).

However, as this report is being compiled on March 2, soybeans have reversed course and the May contract is trading 17.50 cents lower. On February 20, May soybeans generated a short-term buy signal, but as we’ve said in previous reports, the fundamentals for soybeans are negative. The boost to prices had been primarily due to the truckers strike in Brazil, however a large crop is expected from the South American country. We have advised a stand aside posture and will be looking for an opportunity to trade the market from the short side.

Soybean meal:

May soybean meal lost $1.70 volume of 71,165 contracts. Total open interest declined by 596 contracts, which relative to volume is approximately 60% below average. The March contract accounted for loss of 2,153 of open interest. As this report is being compiled on March 2, May soybean meal is trading $8.70 lower or -2.57% versus May soybeans trading -1.60%.On February 19, May soybean meal generated a short-term buy signal, but remains on intermediate-term sell signal. Like soybeans, we expect meal to move lower.

Soybean oil: May soybean oil will likely generate a short term buy signal on March 2.

May soybean oil gained 91 points on volume of 123,240 contracts. Total open interest declined by 2,867 contracts, which relative to volume is approximately 10% below average. The March contract lost 1,859 of open interest and there were open interest declines in the forward months as well. As this report is being compiled on March 2, May soybean oil is trading 9 points lower and has made a daily high of 33.50, which is the highest print since January 16 (33.58).The strength of soybean oil will likely support soybean prices, but we question the duration of the rally. OIA recommends a sideline stance in soybean oil.

Corn:

May corn gained 4.75 cents on volume of 345,088 contract. Total open interest declined by a massive 17,895 contracts, which relative to volume is approximately 105% above average meaning that liquidation was extremely heavy on the modest advance. The March contract law 16,634 of open interest and there were additional open interest inclines in the forward months which increased the total open interest decline. As this report is being compiled on March 2, May corn has reversed course and is currently trading 5.50 lower. May corn remains on a short and intermediate term sell signal. We expect lower prices ahead, but have no trade recommendation.

WTI crude oil:

April WTI crude oil gained $1.59 on volume of 820,165 contracts. Total open interest increased only 3,834 contracts, which relative to volume is approximately 85% less than average. The April contract accounted for loss of 7,017 of open interest. The action on February 27 is disappointing, and the minor increase of open interest indicates a lack of enthusiasm on the part of buyers. As this report is being compiled on March 2, April WTI is trading 13 cents higher and has made a daily high of 51.04, which is the highest print since 51.22 made on February 26.

On February 13, April WTI generated a short-term buy signal, and has not reversed the signal despite moving to a low of 47.80 on February 26. Conceivably, the April contract could rally to a high of 52.47, which is a key pivot point of OIA, but we think it is highly unlikely that a daily low will be made above the pivot point, which would be required for a continuation of the rally. Stand aside.

Brent crude oil:

April Brent crude oil gained $2.53 on volume of 770,369 contracts. Total open interest increased by 16,090 contracts, which relative to volume is approximately 20% below average. The April contract accounted for loss of 3,624 of open interest. The open interest action on Friday was significantly more positive for Brent than WTI, and this has been the pattern for a couple of weeks.

As this report is being compiled on March 2 April rent is trading $2.87 lower while the April WTI contract is trading 2 cents higher indicating that the spread is correcting, which is to be expected considering the massive widening during the past couple of weeks. On February 3, Brent crude generated a short term buy signal, but has not yet generated and intermediate term buy signal. Stand aside.

Silver:

May silver lost 6.6 cents on very light volume of 32,231 contracts. Total open interest increased just 14 contracts.The March contract which has just entered first notice day lost 1,603 of open interest. As this report is being compiled on March 2, May silver is trading 9.3 cents lower and is trading at the lows of the day. On February 18, May silver generated a short-term sell signal and an intermediate term sell signal will be generated if a high of the day is below OIA’s key pivot point for March 2 of $16.420. April gold is on a short and intermediate term sell signal, but silver has been the out performer year to date, which is why the intermediate term sell signal has not been generated. Stand aside.

Cocoa:

May cocoa gained $35.00 on volume of 24,813 contracts. Total open interest increased again, this time by a massive 4,038 contracts, which relative to volume is approximately 475% above average meaning aggressive new buyers were entering the market in huge numbers and driving prices higher (3019). As this report is being compiled after the close, May cocoa has advanced $3.00, however, the May contract did not take out Friday’s high, and the high for the move thus far has been 3037 made on February 25. On February 12, May cocoa generated a short-term buy signal and an intermediate term buy signal occurred on February 17.We recommend a stand aside posture.

Coffee:

May coffee lost 5 ticks on very heavy volume of 40,919 contracts. Volume was stronger than the action on February 25 when 39,349 contracts were traded and May coffee lost 5.45 cents while total open interest increased by 4,048 contracts.On February 27, total open interest declined just 286 contracts, which relative to volume is approximately 60% less than average. Surprisingly, the March contract gained 14 contracts of open interest.

As this report is being compiled on March 2 after the close, May coffee has declined again, this time by 2.15 cents. The March contract has made a daily low of 1.3485. The selling has been relentless since February 17, and as we pointed out in the Weekend Wrap of March 1, commercial interests have been liquidating short positions and adding to long positions as prices have moved lower. This is very positive for the intermediate and longer term. As we have stated in previous reports, much damage has been done to the chart and there is going to be a period of repair before prices can begin to move higher. May coffee remains on a short and intermediate term sell signal. Stand aside.