For Bloomberg access:{OIAR<GO>}

Soybeans:

May soybeans lost 4.75 cents on very light volume of 132,733 contracts. Total open interest increased by a massive 6,895 contracts, which relative to volume is approximately 110% above average meaning that new short-sellers were aggressively entering the market in large numbers and driving prices to a new low for the move (9.67 1/2). There were open interest increases in the May 2015 through July 2016 contracts.

As this report is being compiled on March 17, May soybeans are trading sharply lower, down 12.00 cents and have made a new low of 9.56 1/4, which is not far from its October 1 contract low of 9.28 3/4.The contract low on the continuation chart, (November 2014 contract) is 9.04, and a test of the contract lows is inevitable. On March 6, OIA announced that May soybeans generated a short-term sell signal, and the market has fallen sharply ever since. Soybeans should be traded only from the short side. However, on March 31, the USDA will release its quarterly grain stocks and planting intentions report, and this will have a major impact on the market.

Soybean meal: On March 16, May soybean meal generated a short-term sell signal, which reversed the short-term buy signal of February 19. May soybean meal remains on the intermediate term sell signal.

May soybean meal lost $3.30 volume of 63,327 contracts. Total open interest declined by 498 contracts, which relative to volume is approximately 60% below average. The May contract lost 1,935 open interest. As this report is being compiled on March 17, May soybean meal is trading sharply lower, down $5.10 and has made a new low for the move of 318.00. The next target on the downside is the January 20 low of 314.50, then the contract low of 292.30 made on October 1, 2014. We have no recommendation other than to trade soybean meal from the short side.

Corn:

May corn lost 1.50 cents on volume of 256,990 contracts. Total open interest increased by massive 24,788 contracts, which relative to volume is approximately 275% above average meaning that large numbers of buyers and sellers were entering the market and sellers had the edge by driving prices fractionally lower. There were open interest increases in the May 2015 through May 2017 contracts.

During the past three days beginning on March 12, total open interest has increased by 39,575 contracts while May corn has declined 12.00 cents. This is bearish open interest action relative to the price decline. As this report is being  compiled on March 17, May corn is trading 8.00 cents lower and has made a new low for the move of 3.70 3/4, which is the lowest print since 3.69 1/2 made on October 21. May corn remains on the short and intermediate term sell signal and should be traded from the short side only.

Live cattle:

June live cattle lost 30 points on volume of 45,635 contracts. Total open interest increased by a massive 2,048 contracts, which relative to volume is approximately 75% above average meaning a battle ensued between buyers and sellers and sellers had the edge by moving June live cattle fractionally lower. The April contract lost 3,586 of open interest. As this report is being compiled on March 17, June live cattle is trading 1.025 cents higher on the day and has made a daily high of 1.46300, which is the highest print since 1.47225 made on March 13.

On March 5, June live cattle generated a short-term buy signal, and thus far the high for the move occurred on March 9 at 1.47675. Ever since the high, the market has been moving sideways to lower. In order for the rally to continue, June live cattle must make a daily low above OIA’s key pivot point for March 17 of 1.45560. A short-term sell signal, which would reverse the March 5 short-term buy signal will occur if the daily high is below OIA’s key pivot point for March 17 of 1.43490. Although, cattle can certainly trade higher from here, we do think that being long cattle is a compelling trade. On March 13, clients should have exited the market after the March 10 low was penetrated.

WTI crude oil:

April WTI crude oil lost 96 cents on total volume of 858,741 contracts. Total open interest increased by 25,195 contracts, which relative to volume is approximately 15% above average meaning that aggressive new short-sellers were entering the market in substantial numbers and driving prices to a new contract low ($42.85). For the past two sessions, total open interest has increased by a massive 71,819 contracts while April WTI has fallen $3.17. This is very bearish open interest action relative to the price decline. 

As this report is being compiled on March 17, April WTI is made another contract low of 42.63, which is only fractionally below yesterday’s print. Since making the low earlier in the session, the market has rallied and is now trading 21 cents above yesterday’s close. On March 11, April and May WTI generated a short-term sell signal. Stand aside.

Coffee:

May coffee gained 8.25 cents on volume of 27,463 contracts. Volume was the strongest since March 12 when May coffee advanced 45 points on volume of 28,216 contracts and total open interest increased by 1,771 contracts. On March 16, total open interest increased by only 315 contracts, which relative to volume is approximately 50% below average, which is disappointing for a move of the magnitude seen on March 16. However, the May contract lost 565 of open interest, September 2015 and December 2016 contracts lost a total of 89.

All in all, the tepid volume and minimal increase of open interest is uninspiring, and indicates that coffee has much more work to do on the downside, before it can mount a sustainable rally. As this report is being compiled on March 17, May coffee has closed at 1.3815, up 10 points from yesterday’s close. May coffee remains on a short and intermediate term sell signal. Stand aside.