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On February 10, the USDA will release its World Agriculture Supply Demand report (WASDE)

Soybeans:

March soybeans lost 7.75 cents on volume of 220,543 contracts.Total open interest increased by 9,729 contracts, which relative to volume is approximately 75% above average meaning that aggressive new short-sellers were entering the market in large numbers and driving prices lower.The March contract lost 8167 of open interest, which makes the total open interest increase more impressive (bearish).As this report is being compiled on February 9, March soybeans are trading 1.75 cents higher on the day. March soybeans remain on a short and intermediate term sell signal. Although we think that soybeans should be traded from the short side, we advise against carrying positions into the USDA report if they are not profitable. Buy stops should be placed slightly above the February high of 9.99

Soybean meal:

March soybean meal lost $2.00 on very heavy volume of 161,865 contracts. Total open interest increased by 1,995 contracts, which relative to volume is approximately 45% below average. The March contract lost 8,835 of open interest, which makes the total open interest increase more impressive (bearish). There were open interest increases in the May 2015 through March 2016 contracts. As this report is being compiled on February 9, March soybean meal is trading 90 cents lower on the day. In the January 5 report, OIA recommended the initiation of bearish positions and these should continue to be held through the report using the exit point of 344.70, which was the February 3 high.

Corn:

March corn advanced 0.50 cents on volume of 369,226 contracts. Total open interest acquired by 5,239 contracts, which relative the volume is approximately 40% below average. The March contract lost 20,874 of open interest. As this report is being compiled on February 9, March corn is trading 4.50 cents higher and has made a daily high of 3.91 1/2, which is the highest print since 3.92 1/2 made on January 21. Previously, we’ve advised selling rallies and using the 3.88 1/2 high as an exit point for bearish positions. At this juncture, we recommend a standard side posture. It is apparent the market does not want to go down and the USDA report may have a significant impact on the direction of prices.

WTI crude oil:

March WTI crude oil gained $1.21 on heavy volume of 1,214,382 contracts. Total interest declined by 21,712 contracts, which relative to volume is approximately 25% below average. The March contract accounted for loss of 50,145 open interest. As this report is being compiled on February 9, March WTI is trading $1.43 higher and has made daily high of 53.99. The daily low has been 51.65, which is below OIA’s key pivot point for February 9 of 51.81. Based upon the current trading pattern, it appears likely that a short-term buy signal will be generated on February 10.

Brent crude oil: On February 3, OIA announced that March Brent crude oil generated a short-term buy signal. It currently remains on an intermediate term sell signal.

March Brent crude oil advanced $1.23 on volume of 834,513 contracts. Volume fell substantially from February 5 when March Brent crude advanced 2.41 on volume of 1,003,959 contracts and total open interest increased by 12,549. On February 6, total open interest increased 9,197 contracts, which relative to volume is approximately 45% less than average. The March contract accounted for loss of 12,300 of open interest. As this report is being compiled on February 9, April Brent crude oil is trading 1.36 higher and has made new high for the move of 60.59.

Heating oil: On February 3, OIA announced that March heating oil generated a short-term buy signal. Currently, it remains on an intermediate term sell signal.

March heating oil gained 3.32 cents on volume of 169,670 contracts. Total open interest increased by 4,828 contracts, which relative to volume is average. The March contract lost 3,963 of open interest, which makes the total open interest increased more impressive (bullish). As this report is being compiled on February 9, March heating oil is trading 5.42 cents higher and has taken out the previous high of 1.8747 made on February 3. 

Gasoline:. On February 3, OIA announced that March gasoline generated a short-term buy signal. Currently, it remains on an intermediate term sell signal

March gasoline advanced 3.43 cents on volume of 184,495 contracts. Total open interest increased by 898 contracts, which relative to volume is approximately 75% below average. The March contract accounted for loss of 9,278 of open interest. As this report is being compiled on February 9, March gasoline is trading 4.25 cents higher on the day, but has not taken out the February 3 high 1.6260.

Gold: Unless gold continues to rally, it will generate a short-term sell signal on February 9. If gold makes a daily high above OIA’s key pivot point of 1245.10, the buy signal will remain intact. 

April gold  lost $28.10 on volume of 215,338 contracts. Volume was the highest since January 29 when gold lost $30.00 on volume of 325,928 contracts and total open interest declined by 11,413 contracts. On February 6, total open interest declined by 13,392 contracts, which relative the volume is approximately 140% above average mean that liquidation was very heavy on the sizable decline. As this report is being compiled on February 6, April gold has close that 1241.50, up $8.00. If gold generates a short term sell signal, bullish positions should be closed.

Silver:

March silver lost 50.2 cents on volume of 75,263 contracts. Total open interest increased by 1429 contracts, which relative the volume is approximately 25% below average, however an open interest increase on the price decline is bearish. This is especially the case because managed money is substantially long silver. As this report is being compiled on February 9, March silver has closed at 17.070, up 35.5 cents. Interestingly, silver was strong throughout the session today and will not generate a short-term sell signal on February 9. For this to occur, the high of the day must be below OIA’s key pivot point for February 9 of 16.937. We recommend a cautious stance, and advise paring back bullish positions, or liquidating entirely.

Coffee:

March coffee gained 2.10 cents on very heavy volume of 51,996 contracts. Volume was the strongest since November 14 when 54,318 contracts were traded. On February 6, total open interest increased by 1,256 contracts, which relative the volume is approximately average, but a positive number, which is especially encouraging since the March contract lost 5183 of open interest.

As this report is being compiled on February 9, March coffee has closed at 1.6760, up 1.10 cents from the previous day’s close. This is the highest close since 1.6730 made on January 28. On January 29, March coffee fell sharply, down 6.90. It will be important for coffee to maintain its strength, and a short-term buy signal will be generated if the low for the day is above OIA’s key pivot point for February 9 of 1.7200. March coffee remains on a short and intermediate term sell signal.