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Soybeans:

March soybeans lost 3.50 cents on volume of 173,394 contract. Total open interest increased by 1,944 contract, which relative to volume is approximately 45% below average.The March contract accounted for loss of 7,015 of open interest. As this report is being compiled on January 29, March soybeans are trading unchanged on the day and have made a daily low of 9.67, which is above yesterday’s low of 9.66 1/4. A move to contract lows of 9.20 3/4 made on October 1 appears inevitable. We have no recommendation other than soybeans should be traded from the bearish side. March soybeans remain on a short and intermediate term sell signal.

Soybean Meal:

March soybean meal advanced 80 cents on volume of 85,464 contract. Total interest increased by 4,155 contracts, which relative to volume is approximately 75% above average meaning a battle ensued between buyers and sellers and buyers were able to edge the market slightly higher. The March contract accounted for losses 1,601 of open interest. In the January 5 report, we recommended bearish positions in soybean meal and client should maintain these with stop protection.We expect the market to resume its downtrend and to take out the January 21 low of 326.20.

Corn: On January 29, March corn will generate an intermediate term sell signal because the daily high of 3.73 1/2 is below OIA’s key pivot for January 29 of .3.79 1/2.

March corn lost 8.00 cents on volume of 310,131 contracts. Volume was the strongest since January 23 when March corn advanced 3.00 cents on volume of 314,654 contracts and total open interest increased by 26 contracts. On January 28, total interest increased by a massive 16,222 contract, which relative the volume is approximately 105% above average meaning that aggressive new short-sellers were entering the corn market in large numbers and driving prices to a new low for the move (3.73). As this report is being compiled on January 29, March corn is trading 4.25 cents lower and has made a daily low of 3.68 1/4, which is the lowest print since 3.62 1/4 made on October 27, 2014. Rallies should be sold.

WTI crude oil:

March WTI crude oil lost $1.78 on volume of 765,919 contacts. Volume was the strongest since January 23 when March WTI lost 72 cents on volume of 762,248 contracts and total open interest increased by 3,772. On January 28, total open interest increased by 14,906 contracts, which relative to volume is approximately 20% below average. The March contract accounted for loss of 3,524 of open interest. As this report is being compiled on January 29, March WTI is trading 62 cents lower and has made a new contract low of 43.58. Stand aside.

Natural Gas:

March natural gas lost 8.3 cents on volume of 273,224 contracts. Total open interest declined by 6618 contracts, which relative the volume is average. The February contract accounted for loss of 5,990 of open interest. As this report is being compiled on January 29, March natural gas is trading 14.7 cents lower and has made a new contract low of 2.672, which takes out the previous contract low of 2.762. On December 1, 2014 natural gas generated a short and intermediate term sell signal.

The Energy Information Administration announced that working gas in storage was 2,543 Bcf as of Friday, January 23, 2015, according to EIA estimates. This represents a net decline of 94 Bcf from the previous week. Stocks were 324 Bcf higher than last year at this time and 79 Bcf below the 5-year average of 2,622 Bcf. In the East Region, stocks were 40 Bcf below the 5-year average following net withdrawals of 69 Bcf. Stocks in the Producing Region were 43 Bcf below the 5-year average of 930 Bcf after a net withdrawal of 16 Bcf. Stocks in the West Region were 4 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 2,543 Bcf, total working gas is within the 5-year historical range.

Gold:

April gold lost $4.50 on volume of 344,864 contracts. Total open interest declined by 8,695 contracts, which relative the volume is average. The February contract, which is approaching first notice day lost 56,127 of open interest. As his report is being compiled on January 29, April gold is trading sharply lower, down $32.50 and has made a daily low of 1252.50. As we said in yesterday’s report, we expected more of the correction, and that the path higher will be a rocky one.

Based upon the current price for April gold, the market is trading slightly above its 20 day moving average of 1249.20 and significantly above the 50 day moving average of 1219.20. Additionally, for April gold to generate a short-term sell signal , the high of the day the day must be below OIA’s key pivot point for January 29 of 1238.90. We don’t think this is in the cards. Additionally, for an intermediate-term sell signal to be generated, the high of the day must be below OIA’s key pivot point for January 29 of 1218.80.There is no question the market can pull back further, but we think this is a garden-variety wash out. We recommend the use of options for risk mitigation. 

Silver:

March silver close unchanged on volume 35,190 contracts. Total open interest declined by 383 contracts, which relative the volume is approximately 50% below average.The March contract lost 1,412 open interest. As this report is being compiled on January 29, March silver is trading $1.298 lower and has made a daily low of 16.740. To put the current price in perspective consider that the 20 day moving average is 17.146 and the 50 day moving average is 16.644, slightly below today’s low.

In order for March silver to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for January 29 of 16.380.For an intermediate term sell signal to be generated, the high of the day must be below OIA’s key pivot point for January 29 of 16.770. March silver is trading 6.93% lower while gold is trading down 2.36%. This is to be expected because silver has been the out performer year to date by a wide margin.

Coffee:

March coffee lost 50 ticks on volume 29,072 contracts. Total open interest increased by a massive 2,311 contracts, which relative the volume is approximately 230% above average meaning a battle ensued between buyers and sellers and sellers were only able to move the market fractionally lower. The March contract accounted for loss of 2,196 of open interest. As this report is being compiled on January 29, March coffee is trading 7.30 cents lower on the day. March coffee remains on a short and intermediate term sell signal.

Sugar:

March sugar closed unchanged on volume of 130,069 contract. Total open interest increased by 3,842 contracts, which relative the volume is approximately 15% above average. The March contract accounted for loss of 5,294 of open interest. As this report is being compiled on January 29, March sugar has closed at 14.85, down 31 points. It looks increasingly likely that March sugar is going to reverse the short term buy signal of January 16.In order for this to occur, the high of the day must be below OIA’s key pivot point for January 29 of 14.91. If the market penetrates 14.61, bullish positions should be liquidated.