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Soybeans: 

On January 13, March soybeans generated a short term buy signal and remains on an intermediate term buy signal.

March soybeans gained 6.00 cents on volume of 265,703 contracts. Total open interest increased by massive 12,661 contracts, which relative to volume is approximately 75% above average. The March contract accounted for a loss of 151 of open interest. As this report is being compiled on January 17, the March contract is rocketing higher, up 27.75 cents and has made a new high for the move of 10.75 1/2, which is the highest print since 10.74 made on November 29, 2016.

Now that soybeans are on a short term buy signal, the market should have a pullback lasting 1-3 days and this would be the opportunity to initiate bullish positions. The COT report released last Friday and tabulated on January 11 showed that managed money added 2,878 to their long positions and also added 1,384 to their short positions. Commercial interests added 465 contracts to their long positions and liquidated 2,740 of their short positions. As a result, managed money was long soybeans by a ratio of 4.42:1, down from the previous week of 4.54:1 and below the ratio two weeks ago of 4.87:1.

Soybean meal: On January 13, March soybean meal generated a short term buy signal and remains on an intermediate term buy signal.

March soybean meal gained $6.00 on volume of 130,272 contracts. Total open interest increased by 4,292, which relative to volume is approximately 15% above average. The March contract accounted for a loss of 164 of open interest. As this report is being compiled on January 17, the March contract has exploded higher, up $15.30 and has made a new high for the move of 352.40, which is the highest print since 357.90 made on July 19, 2016.

The COT report revealed that managed money added 2,719 to their long positions and liquidated 1,376 of their short positions. Commercial interests added 1,206 to their long positions and also added 12,278 to their short positions. As a result, managed money was long soybean meal by ratio of 1.72:1, up slightly from the previous week of 1.56:1 and the ratio two weeks ago of 1.60:1. The market has come very far very fast and now that it is on a short term buy signal, soybean meal should experience a pullback lasting 1-3 days and this would be the opportunity to initiate bullish positions.

Soybean oil: March soybean oil remains on short and intermediate term sell signals on January 17.

March soybean oil lost 47 points on volume of 107,544 contracts. Total open interest increased by 2,664, which relative to volume is average. As this report is being compiled on January 17, the March contract is trading 3 points lower while the soybean meal contract is trading 4.67% higher and soybeans +2.25%.

Surprisingly, managed money continues to be far more bullish on soybean oil than meal and beans. According to the latest COT report, managed money added 2,523 to their long positions and liquidated 4,905 of their short positions. Commercial interests added 222 to their long positions and also added 10,405 to their short positions. As a result, managed money was long soybean oil by a ratio of 6.18:1, up substantially from the previous week of 4.54:1 and the ratio two weeks ago of 5.88:1. Stand aside.

Chicago wheat: March Chicago we will generate an intermediate term buy signal on January 17 after generating a short term buy signal on January 5. We will provide a report tomorrow on today’s activity in Chicago wheat.

Natural gas:

February natural gas advanced 2.9 cents on volume of 479,454 contracts. Total open interest declined by 4,301 contracts, which relative to volume is approximately 50% below average. However, this is the third time since January 10 when natural gas prices advanced that total open interest declined. This reflects the condition of large numbers of speculative longs who got caught heavily long at the top of the market and are now using any rally to trim losses or enhance profits.

The COT report revealed that managed money liquidated 19,341 of their long positions and added 11,932 to their short positions. Commercial interests added 10,357 to their long positions and also added 9,798 to their short positions. As a result, managed money was long by ratio of 2.23:1, down from the previous week of 2.68:1 and the ratio two weeks ago of 2.87:1. On January 4 February natural gas generated short and intermediate term sell signals. Stand aside.

Euro:

The March euro advanced 17 pips on volume of 186,132 contracts. Total open interest increased by 1,283, which relative to volume is approximately 65% below average, but a total open interest increase on Friday’s modest advance is positive.

The COT report released on Friday revealed that leverage funds continue to hold a very large short position and the ratio for this week was 3.85:1, though this was down slightly from the previous week of 4.00:1, but up from the ratio two weeks ago of 3.58:1. Due to the massive short position, leveraged funds should provide fuel for a continued upside move until such time that weak shorts are blown out.

On January 12, OIA announced that the March euro generated a short term buy signal, but it remains on an intermediate term sell signal. As this report is being compiled on January 17, the March contract is trading 53 pips higher and has made a daily high of 1.0745, which is the highest print since 1.0878 made on December 8. Stand aside.