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Corn:

March corn lost 0.50 cents on volume of 270,473 contracts. Volume increased from January 25 when the March contract lost 0.50 cents on volume of 243,626 contracts and total open interest declined by 13,836. On January 26, total open interest declined again, this time by 6,090 contracts, which relative to volume is approximately 10% below average. The March contract accounted for loss of 18,468 of open interest.

As this report is being compiled on January 27, the March contract is trading nearly unchanged on the day and has made a high of 3.71, which is below yesterday’s print of 3.72. The March contract is having trouble breaking above the 3.72 area, but this should not be taken as a sign of renewed weakness. For the March contract to resume its advance, it must make a daily low above OIA’s pivot point for January 27 of 3.68 7/8.

A short-term sell signal will be generated if the daily high is below OIA’s key pivot point for January 27 of 3.62 3/4. Despite the difficulty of corn breaking out to the upside, we advise clients against shorting corn. March corn remains on a short-term buy signal, but an intermediate term sell signal.

Soybeans:

March soybeans lost 4.00 cents on volume of 171,368 contracts. Total open interest increased by 1,243 contracts, which relative to volume is approximately 60% below average, however an open interest increase on yesterday’s decline is negative. As we pointed out before, open interest action relative to price advances and declines have been mixed.

Despite this, we think the path of least resistance is higher for soybeans, especially because the March soybean oil contract will generate a short-term buy signal on January 27 and will support higher bean prices. As this report is being compiled on January 27 the March contract is trading 2.50 cents higher on the day. On January 19, OIA announced that March soybeans generated a short-term buy signal, and it remains on an intermediate term sell signal. We have no recommendation.

Soybean oil: March soybean oil will generate a short-term buy signal on January 27 provided the daily low remains above OIA’s key pivot point for January 27 of 30.46.

March soybean oil advanced 30 points on volume of 95,011 contracts. Total open interest increased by 2,871 contracts, which relative to volume is approximately 10% above average. The July 2016 through October 2016 contracts lost a total of 948 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in these delivery months and increase total open interest above average. Yesterday’s performance was outstanding. As this report is being compiled on January 27, the March contract is trading 28 points higher and has made a daily high of 31.09, which is the highest print since 31.13 made on December 31. We have no recommendation.

Chicago wheat: March Chicago wheat will NOT generate a short-term buy signal on January 27.

Live cattle: April live cattle will generate a short-term buy signal if the daily low is above OIA’s key pivot point for January 27 of 1.34300. The low on January 27 has been 1.33325. Live cattle is entering its period of seasonal strength and February is a strong month performance wise.

Coffee: March coffee will generate a short-term buy signal if the daily low is above OIA’s key pivot point for January 27 of 1.1990. The low on January 27 is 1.1630.

WTI crude oil:

March WTI crude oil advanced 23 cents on strong volume of 1,087,338 contracts. Volume increased from January 25 when the March contract lost $1.85 on volume of 1,066,356 contracts and total open interest increased by 6,988. On January 26, total open interest increased by 11,723 contracts, which relative to volume is approximately 50% below average, but an open interest increase on yesterday’s moderate advance is positive.

During the past three sessions beginning on January 21, whenever crude prices advance, total open interest increases. This clearly indicates that new buying is powering prices higher, NOT short covering. As this report is being compiled on January 27, the March contract is trading 85 cents above yesterday’s close and has made a new high for the move of 32.84, which is slightly above the January 25 print of 32.74. We have no recommendation.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.4 million barrels from the previous week. At 494.9 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 3.5 million barrels last week, and are well above the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 4.1 million barrels last week but are near the upper limit of the average range for this time of year. Propane/propylene inventories fell 6.2 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories decreased by 1.0 million barrels last week.

Euro:

The March euro advanced 16 pips on volume of 156,439 contracts. Total open interest increased by 3,242 contracts, which relative to volume is approximately 10% below average, but an open interest increase on yesterday’s modest advance is positive.

As this report is being compiled on January 27, the March euro is trading 23 pips higher on the day. In yesterday’s report, we pointed out that the euro was correlated to yesterday’s movement in equity indices and this is the second day the euro is advancing along with the S&P 500 E-mini.

Many people are calling for euro parity, but we are not in this crowd. OIA thinks it is highly likely a short-term buy signal will be generated in the not-too-distant future. For this to occur, the low of the day must be above OIA’s key pivot point for January 27 of 1.0939. We have no recommendation.

Silver: On January 26, March silver generated a short-term buy signal, and remains on an intermediate term sell signal.

March silver advanced 31 cents on volume of 67,948 contracts. Total open interest increased by a sizable 3,295 contracts, which relative to volume is approximately 75% above average meaning aggressive new buyers were entering the market in large numbers and driving prices higher. The March contract accounted for loss of 361 of open interest, which means there were more than enough open interest increases in the forward months to offset the decline in March.

As this report is being compiled on January 27, March contract is trading 9.4 cents lower, which is typical after the generation of a short-term buy signal. As of today, all three precious metals: gold, silver and platinum are on short term buy signals. It has been quite while since the last occurrence. At this juncture, we have no recommendation.

Platinum: April platinum will generate a short-term buy signal on January 27, but remains on an intermediate term sell signal.

Gold: On January 26, April gold generated an intermediate term buy signal after generating a short-term buy signal on January 7.

April gold advanced $14.90 on heavy volume of 302,143 contracts. Total open interest declined by 15,598 contracts, which relative to volume is approximately 105% above average meaning liquidation was extremely heavy on yesterday’s strong advance. However, the February contract which is approaching first notice day lost 41,045 of open interest.

As this report is being compiled on January 27, the April contract is trading 4.90 lower after making a daily high below yesterday’s print. We think the market may consolidate for a time, but the Federal Reserve will be releasing their minutes within the next hour, and this could send gold strongly in either direction. We have no recommendation.

S&P 500 E-mini:

The March S&P 500 E-mini advanced 25.75 points on volume of 1,784,724 contracts. Total open interest increased by 9,507 contracts, which relative to volume is approximately 75% below average, but an open interest increase on yesterday’s advance is mildly positive. This is the first day of positive open interest action relative to a price advance that we’ve seen during the course of the recent rally.

As this report is being compiled on January 27 the March contract is trading 6.25 points higher and has made a new high for the move of 1910.00, which is the highest print since 1921.00 made on January 15. We have been cautioning clients to remain on the sidelines and have expected the rally. At this juncture the March contract is trading approximately 100 points from the low of 1804.25 made on January 20. Continue on the sidelines.