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Soybeans:

May soybeans lost 2.25 cents on volume of 175,588 contracts.Total open interest increased by 1,032 contracts, which relative to volume is approximately 65% below average. However the March contract lost 350 of open interest, July -1819, which makes the total open interest increase more impressive (bearish).

As this report is being compiled on March 13, May soybeans are trading sharply lower, down 16.00 cents and is trading at the lows the day, which are new lows for the move. On March 6, May soybeans generated a short-term sell signal, and though prices have been relatively firm for the past several days, it now appears that prices are headed on the downward trajectory that we spoke of in previous reports.

From the March 10 report:

“We think the path of least resistance is lower, however, soybeans have not broken down, but we think this is inevitable. On March 6 May soybeans generated a short-term sell signal. Soybeans may not begin to trade significantly lower until a sell signal is generated in soybean meal.”

Soybean meal:

May soybean meal lost $1.70 volume 62,001 contracts. Total open interest declined by 701 contracts, which relative to volume is approximately 45% less than average. As this report is being compiled on March 13, May soybean meal is trading 3.70 lower and has made a daily low 326.80. On February 19, May soybean meal generated a short-term buy signal, and a short-term sell signal will be generated if the high of the day is below OIA’s key pivot point for March 13 of 329.20. We have no recommendation.

Corn:

May corn lost 2.50 cents on volume of 258,870 contract. Total open interest increased by 1,500 contracts, which relative to volume is approximately 70% below average. However, the March contract lost 781 of open interest, July -4618, which makes the total open interest increase more impressive (bearish). As this report is being compiled on March 13, May corn is trading 7.25 cents lower and has made a daily low of 3.80 3/4, which is the lowest print since 3.79 1/2 made on February 25. May corn remains on a short and intermediate term sell signal. May corn should be traded only from the bearish side.

Live cattle:

June live cattle lost 30 points on volume of 56,434 contract. Total open interest increased by a sizable 2,446 contracts, which relative to volume is approximately 70% above average meaning a battle ensued between buyers and sellers and sellers edged the market fractionally lower.The April contract accounted for a loss of 4,517 of open interest.

Cattle saw two-sided trading with the June contract making a high of 1.47275, which is slightly below the March 11 high of 1.47300 and high for the move of 1.47675 made on March 9. It made a low of 1.45525, which has been taken out on March 13 (1.44325). We  have been advising clients to exit bullish positions at the March 10 low of 1.45250 and, clients should now be on the sidelines. For June live cattle to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for March 13 of 1.43400.

WTI crude oil:

April WTI crude oil lost $1.12 on volume of 855,293 contracts. Total open interest increased by a sizable 26,391 contracts, which relative to volume is approximately 20% above average meaning that aggressive new short-sellers were entering the market in heavy numbers and driving prices to a new low for the move (46.86). The April contract lost 22,062 of open interest, which makes the total open interest increase more impressive (bearish).

As this report is being compiled on March 13, April WTI is trading $1.85 lower and has made a new low for the move at 44.86, which is only slightly above the January 29 contract low of 44.37. On March 11, April WTI generated a short-term sell signal and remains on intermediate term sell signal. Stand aside.

Brent crude oil:

May Brent crude oil lost 60 cents on volume of 862,910 contracts. Total open interest increased by 18,902 contracts, which relative to volume is approximately 15% below average. However, the April contract lost 26,584 of open interest, which makes the total open interest increase more impressive (bearish).As this report is being compiled on March 13, May Brent crude oil is trading 1.56 lower on the day. On March 11, May Brent crude oil generated a short-term sell signal and remains on intermediate-term sell signal. Stand aside.

Heating oil: On March 13, April and May heating oil will generate a short-term sell signal, which reverses the short-term buy signal of February 3.

April heating oil lost 4.13 cents on volume of 175,564 contracts. Total open interest increased by 5,394 contracts, which relative to volume is approximately 20% above average, indicating that new short-sellers were entering the market and driving prices lower (1.7640). The April contract lost 2,566 of open interest, which makes the total open interest more impressive (bearish). As this report is being compiled on March 13, April heating oil is trading 4.42 cents lower.

Gasoline: On March 13, April and May gasoline will generate a short-term sell signal, which reverses the short-term buy signal of February 3.

April gasoline lost 1.69 cents on heavy volume of 232,788 contracts. Total open interest declined by 3,287, which relative to volume is approximately 40% less than average. The April contract accounted for a loss of 5,012 open interest. As this report is being compiled on March 13, April gasoline is 3.11 cents lower.

Cocoa: On March 12, May cocoa generated an intermediate term sell signal after generating a short-term sell signal on March 11.

This will be our last report on cocoa until we announce a signal change or see a trading opportunity.

May cocoa lost $17.00 on volume of 33,264 contracts.Total open interest declined by a massive 1,766 contracts, which relative to volume is approximately 110% above average meaning that liquidation was extremely heavy on the relatively modest decline. As this report is being compiled on March 13, May cocoa is trading $27.00 lower and has made a new low for the move of 2807. As we said yesterday, the fundamentals for cocoa or actually quite bullish and we prefer to stand aside, rather than trade it from the bearish side.

Coffee:

May coffee gained 45 points on volume of 28,216 contracts. Total open interest increased by massive 1,771 contracts, which relative to volume is approximately 140% above average meaning that a battle ensued between buyers and sellers and buyers had the edge by moving prices fractionally higher. The massive build up of open interest has been nothing short of spectacular, and based upon our experience indicates that we are likely near a bottom.

Remember this: open interest increases when buyers and sellers disagree on the direction of prices. The larger the increase – the greater degree of disagreement.We know that speculators are dominating the short side, and commercials the long side.

This afternoon, the COT report is going to be released, and we fully expect to see an increase in the net short position of managed money. At the same time, we expect to see a decrease in the net short position of commercial interests.