Soybeans:

May soybeans lost 25.00 cents on volume of 151,039 contracts. Volume was significantly below the 212,552 contracts traded on March 20 when May soybeans advanced 2.50 cents and total open interest declined by 6,582 contracts. On March 21, total open interest declined by 8,922 contracts, which relative to volume is approximately 160% above average meaning that liquidation was heavy on the decline. The May contract accounted for loss of 8,951 of open interest. As this report is being compiled on March 24, May soybeans are trading 13.75 cents higher and have made a daily high of 14.32 3/4, but this is below the high of March 21 of 14.35 3/4. 

In the early evening session on Sunday, the market made a low of 13.93 1/4, which is the May contract’s lowest price since the print of 13.84 1/2 made on March 18. Even though the market has been trading in a fairly firm manner and has rebounded smartly from its losses, the fact remains that Brazilian crop is being harvested at a healthy pace and there is talk of the Chinese looking to sell some of their inventory, as they are well-stocked with soybeans. Cancellations by China have been moderate, but  could increase dramatically, especially with the March 31 planting intentions and grain stocks report on the horizon. From now until the March 31 report, we do not see anything more than tepid rallies on low volume. Although we have not recommended purchases soybeans, we suggest that clients should be looking to exit long positions soybeans on any rally. Soybeans remain on a short and intermediate term buy signal.

Soybean meal:

May soybean meal lost $10.60 on volume of 54,563 contracts. Total open interest declined by 396 contracts, which relative to volume is approximately 65% below average. The May contract accounted for loss of 2,481 of open interest. As this report is being compiled on March 24, May soybean meal is trading $2.90 higher and has made a daily high of $466.30, which is below the high of March 21 of 468.40. Like soybeans, we see nothing more than tepid rallies on low volume and if long would use these as an opportunity to exit long positions. Soybean meal remains on a short and intermediate term buy signal.

Corn:

May corn advanced 0.50 cents on light volume of 155,263 contracts. Total open interest declined by 2,944 contracts, which relative to volume is approximately 25% below average. As this report is being compiled on March 24, May corn is trading 9.50 higher on low volume and has made a daily high of 4.91, which is its highest price since the March 19 high of 4.91 3/4. Please review the March 23 Weekend Wrap for our report on corn. Though we have not recommended long positions, we do suggest that clients liquidate corn on any rally. The March 23 report goes into detail about the massive bullish position of managed money and the increasingly bearish position of commercial interests. As the March 31 planting intentions and grain stocks report gets closer, we will see position squaring and believe that the bias of the market will be to the downside.

Chicago wheat:

May Chicago wheat lost 10.50 cents on volume of 92,224 contracts. Volume fell dramatically from March 20 when May Chicago wheat lost 12.00 cents on volume of 177,414 contracts and total open interest increased by 6,806 contracts. On March 21, open interest increased again, this time by 2119 contracts, which relative to volume is approximately 10% below average, but an open interest increased on the decline is bearish. This is the second day in a row that prices have declined and open interest has increased. The May contract lost 2367 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on March 24, May Chicago wheat is trading 19.00 cents higher and has made a daily high of 7.18 1/4, which is shy of the 7.23 1/2 print of March 20, which has been the high for the move. In the March 19 report, we recommended that bullish positions recommended on February 6 be protected with long puts. Continue to hold both positions.

Kansas City wheat:

May Kansas City wheat lost 10.75 cents on volume of 25,820 contracts. Volume declined from the 33,625 contracts traded on March 20 when May KC wheat lost 6.25 cents and total open interest increased by 1,290 contracts. On March 21, total open interest increased by a massive 2939 contracts, which relative to volume is approximately 360% above average meaning that new short sellers were heavily entering the market and driving prices lower. The May contract lost 292 of open interest , which makes the total open interest increase more impressive (bearish). As this report is being compiled on March 24, May KC wheat is trading 20.50 cents higher and has made a daily high of 7.97, which is shy of 7.99, the high print made on March 20 and the high for the move. On March 19, we recommended the initiation of long puts against the bullish positions recommended on February 6. Continue to hold these positions.

Live cattle:

April live cattle lost 42.5 points on volume of 54,422 contracts. Total open interest increased by 976 contracts, which relative to volume is approximately 25% below average. The April contract lost 3,189 of open interest, which makes the total open interest increase somewhat more impressive (bullish). As this report is being compiled on March 24, April cattle is trading 27.5 points higher but has not taken out the March 21 high of 1.44900. Continue to hold bullish positions, but make sure sell stops are in place.

Sugar #11: On March 21, May sugar generated a short-term sell signal, but remains on an intermediate term buy signal.

May sugar lost 22 points on volume of 102,623 contracts. Total open interest declined by 734 contracts, which relative to volume is approximately 60% less than average. As this report is being compiled on March 24, May sugar is trading 6 points higher and has taken out Friday’s low of 16.69 by 2 points. Usually, after the generation of a sell signal, the market has a tendency to rally from 1-3 days, this is the opportunity to initiate bearish positions. Until then, stand aside. Please review the March 23 report on sugar.

WTI crude oil:

May WTI crude oil advanced 56 cents on very light volume of 392,862 contracts. Volume was the lowest since February 28. On March 21, total open interest declined by 4848 contracts, which relative to volume is approximately 45% less than average. April contract lost 68 of open interest. We suggest the March 23 Weekend Wrap be reviewed in the event this has not been done already. As this report is being compiled on March 24, May WTI is trading 3 cents higher on the day and has made a daily high of $100.29, which is 4 cents above the high of 100.25 made on March 21. We think prices are headed lower and advise holding the short call recommended on March 12 and additional bearish positions recommended on March 19.

Natural gas:

May natural gas lost 5.6 cents on volume of 196,828 contracts. Total open interest declined by 1,383 contracts, which relative to volume is approximately 60% below average. The April contract lost 13,728 of open interest. As this report is being compiled on March 24, May natural gas is trading 2.4 cents lower and has made a daily low of $4.258. On March 12, natural gas generated a short-term sell signal, but remains on an intermediate term buy signal. The market should find support at the $4.148 level, which is slightly below the 100 day moving average of $4.165. 

Euro:

The June euro advanced 13 pips on light volume of 141,041 contracts. Total open interest declined by 1,098 contracts, which relative to volume is approximately 65% below average. As this report is being compiled on March 24, the euro is trading 2 pips higher. For the uptrend to resume, the low for the day must be above 1.3784 and after this the next hurdle is a daily low above 1.3821. The euro remains on a short and intermediate term buy signal. We have no recommendation.

British pound: The June British pound generated a short-term sell signal on March 19, and until the market has a rally, which would be the signal to initiate bearish positions, we will not report on the pound. 

Yen: The June yen remains on a short and intermediate term sell signal and until such time as we see a trading opportunity we will not be reporting on it.

Australian dollar:

The June Australian dollar advanced 49 pips on light volume of 72,325 contracts. Total open interest declined by 2,544 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly substantial on the advance. Despite this, the Australian dollar remains on a short and intermediate term buy signal, and it appears the market may be on the verge of a breakout. If the June Australian dollar reaches 91.00, this would be the highest print since November 22 when the high  was 91.10. The moving averages are in a bullish setup with the 20 day at 89.61, 50 day 88.78 and the 100 day moving average at 89.51. Before initiating bullish positions, wait until the June contract reaches 91.00. The only reason we say this is that open interest action is not positive and we know that managed money remains short. 

Gold:

April gold advanced $5.50 on heavy volume of 209,636 contracts. Total open interest declined by 6,579 contracts, which relative to volume is approximately 25% above average. For the past 4 trading sessions beginning on March 18, open interest has declined by 16,821 contracts while April gold has declined $36.90. This is a healthy development especially since the ratio of managed money longs is at a stratospheric level.

As this report is being compiled on March 24, April gold is trading $22.30 lower and has made a new low for the move at $1308.50. Although we were warning that the market was massively overbought and due for correction, the correction has been deeper than we originally thought. Even with the correction, if positions were initiated per the February 6 report, clients have healthy profits on the position. April gold would generate a short-term sell signal if the high for the day was below $1309.70. Another concern is that platinum is on the verge of generating a short-term sell signal as well. On March 24, gold has closed at 1311.20, which means it wouldn’t take much for the April contract to generate a short-term sell signal. On the other hand, the trend would change if the low for the day is above $1328.40. As a result, we recommend that bullish positions in gold be liquidated on March 24. Once the market resumes its uptrend, we will again recommend bullish positions.

Silver:

May silver lost 12 cents on volume of 30,185 contracts. Total open interest increased by 167 contracts, which relative to volume is approximately 75% below average. As this report is being compiled on March 24, May silver is trading 22.1 cents lower on the day and has made a new low for the move at $19.97. Silver will generate an intermediate term sell signal on March 24. On March 17, we recommended that bullish positions be liquidated and clients should be on the sidelines.

S&P 500 E mini:

The June S&P 500 E mini lost 9.00 points on volume of 1,799,614 contracts. Total open interest declined by 15,600 contracts, which relative to volume is approximately 60% less than average. As this report is being compiled on March 24, the June E mini is trading 7.75 points lower and has made a daily low of 1841.25, which took out the low print of 1842.00 made on March 19. Continue to hold out of the money call positions coupled with long put positions for clients who hold long equity positions.