Soybeans:

March soybeans gained 2.25 cents on volume of 211,497 contracts. Open interest increased by 2668 contracts, which in relation to volume is approximately 45% less than average. The March contract lost 11,015 of open interest. For the past 5 trading sessions beginning on February 7, the highs have been lower and the lows have been lower. The high on February 13 was $14.28 3/4, and this matches the high on February 14. The USDA reported export sales at 32.93 million bushels, which is the highest since the report was compiled on January 10 when 59.11 million was sold. The market continues to look weak and clients should stand aside. On February 14, soybeans remain on a short-term buy signal, but in intermediate term sell signal. Stand aside.

Soybean meal:

March soybean meal lost $2.20 on volume of 98,987 contracts. Volume was the lightest since February 6 when 67,658 contracts were traded and March soybean meal lost $1.40 while open interest increased by 4093 contracts. On February 13 open interest declined by 3047 contracts, which in relation to volume is approximately 20% above average. The March contract lost 10,223 contracts of open interest, however there were increases of open interest in the May 2013 through July 2014 contracts. From February 4 through February 13, open interest has declined by 3,849 contracts, while soybean meal has declined by $24.80. The open interest decline from February 4 through February 13 is positive relative to the price decline. On February 13, the March-May soybean meal spread continued to narrow with March selling at a 40 cent premium to May. Like soybeans, for the past 5 trading sessions, the highs have been lower and the lows have been lower. According to the USDA export sales totaled 132.42 thousand tons, which is the lowest weekly sales number for the past 4 weeks. On February 11, March soybean meal generated a short-term sell signal and has been on an intermediate term sell signal. Stand aside.

Soybean oil:

March soybean oil gained 56 points on volume of 138,934 contracts. Volume was the highest since February 8 when 150,935 contracts were traded and March soybean oil lost 42 points while open interest declined by 6091 contracts. On February 13, total open interest declined by 1747 contracts, which in relation to volume is approximately 40% less than average. Although the March contract lost 9342 of open interest the May 2013 through July 2014 contracts added open interest. The USDA reported that 16.60 thousand tons were sold in the most recent reporting week which is the lowest since January 10. However this is not as bad as it seems because sales need to average only 7.88 thousand tons to meet the USDA export projection. Yesterday, we recommended that any setback in soybean oil should be bought, and that the low of 50.56 should be used as an exit point for all long positions.

Corn:

March corn lost 0.75 cents on heavy volume of 438,086 contracts. Volume declined slightly from the 446,723 contracts that were traded on February 12. On February 12 corn lost 6 cents while open interest increased by 10,436 contracts. On February 13, total open interest increased by 6017 contracts, which in relation to volume is approximately 40% less than average. The March contract lost 30,798 of open interest, but the May 2013 through December 2014 contracts gained open interest with the exception of the September 2013 contract. From February 4, through February 13, open interest has increased by 28,565 contracts while March corn has declined 40.50 cents. This is bearish open interest action relative to the price decline.

Although March corn generated a short-term sell signal on February 11, which confirmed the intermediate term sell signal,  clients should not get bearish at current levels. The March-May spread widened to 2.00 cents premium to March, which is the highest price for the spread since November 28, 2012. Additionally, from February 4 when the spread closed at 2.00 cents premium to May, March corn declined from $7.34 1/4 to 6.87 1/4 on February 13. Yet the spread inverted during the decline in corn prices. This is bullish. Although we are not advocating long positions at this juncture, clients should not enter new short positions. The USDA reported that 6.7 million bushels were sold, which is the lowest in 2 weeks. Stand aside.

Wheat:

March wheat gained 3.50 cents on heavy volume of 145,867 contracts. Volume declined by approximately 35,000 contracts from February 12 when wheat lost 9.50 cents and open interest increased by 9686 contracts. On February 13, open interest declined by 6540 contracts, which in relation to volume is approximately 75% above average. The March contract lost 17,449 of open interest. We got the USDA reported that 23.9 million bushels were sold, which is the highest number in 7 weeks. Wheat remains on a short and intermediate term sell signal. Stand aside.

Crude oil:

March crude oil lost 50 cents on volume of 706,370 contracts. Volume increased by approximately 22,000 contracts from February 12 when crude oil advanced 48 cents and open interest increased by 22,570 contracts. On February 13, open interest increased by 11,574 contracts, which in relation to volume is approximately 35% less than average. The last COT report was tabulated on February 5. From February 6 through February 12, open interest has increased by 58,616 contracts while crude oil has advanced 87 cents. The open interest increased is disproportionately large to the advance, and it is a warning there is a considerable amount of selling, probably by commercial interests that is keeping a lid on prices.

However, the price performance of crude oil since it topped out at $98.24 on January 30 is even worse. For example, from January 31 through February 13, open interest has increased by 92,973 contracts, however crude oil has declined by 93 cents from the close on January 30 of $97.94 to February 13 of $97.01. This is distinctly bearish. Additionally with the hefty increase of open interest during the COT reporting period of February 6 through February 12, we have no doubt that the long to short ratio has increased from the most recent report tabulated as of July 5 and released on February 8. This leaves crude oil  vulnerable to a heavy selling when market participants realize that crude oil is topping out. The only exception to this would be a major crisis in the Middle East, in which case all bets are off. Stand aside.

Copper:

March copper lost .0015 on heavy volume of 81,074 contracts. Volume was the highest since January 31 when 89,122 contracts were traded and March copper closed at $3.7320. On February 13, open interest increased by a massive 3602 contracts, which in relation to volume is approximately 75% above average. Note that on February 12, copper gained 2.15 cents, but open interest increased by only 255 contracts on volume of 65,841. Copper remains in a trading range, and clients should keep this in mind if they decide to enter long positions. Since topping out at $3.7925 on February 4 through February 13 open interest has declined by 5898 contracts while copper has declined by 2.60 cents. This is bullish open interest action relative to the price decline. Copper remains on a short and intermediate term buy signal.

Gold:

April gold lost $4.50 on volume of 146,851 contracts. Open interest increased by a massive 11,186 contracts, which in relation to volume is approximately 210% above average. This is the largest percentage increase of open interest above the average since gold began its decline. During the past 4 sessions, open interest has increased by 25,508 contracts while April gold has declined by $26.20. This is bearish open interest action relative to the price decline. Additionally, gold closed at $16 45.10 on February 13, which was the lowest close since August 28, 2012 when April gold closed at 1627.20. We have been warning clients for quite some time to stay away from the long side of gold. As this report is being compiled on February 14, gold is trading $10.90 lower and is made a new low for the move at $1632.80. Stand aside.

Platinum:

April platinum gained $12.50 on fairly light volume of 9811 contracts. Volume was the lowest since January 30, when platinum traded 9057 contracts and April platinum gained $10.40 while open interest increased by 28 contracts. On February 13, open interest declined by 858 contracts, which in relation to volume is approximately 240% above average, meaning that liquidation was heavy. During the past 2 days platinum advanced $33.60 while open interest declined 735 contracts. This is bearish open interest action relative to the price advance. Additionally the market reached its highest level ($17 35.90) since February 7 when it made a high of 1743.00, yet open interest declined and volume was light on the advance. As this report is being compiled, April platinum is trading $15.20 lower and has made a low for the day of 1709.40. Platinum should continue to correct, and clients should stand aside until the carnage is over.

Silver:

March silver lost 15 cents on volume of 45,923 contracts. Open interest increased by 130 contracts, which is minuscule and dramatically below average. The 50 day moving average closed under the 150 day moving average for the first time since late September. On February 12, March silver generated a short-term sell signal, and has already been on an intermediate term sell signal. As this report is being compiled on February 14 silver is trading 48.4 cents lower and has made a new low for the move at $30.21. Stand aside.

Euro:

The March euro gained 5 points on volume of 246,638 contracts. Open interest declined by 1112 contracts, which in relation to volume is approximately 75% below average. During the past 6 days, open interest has declined 18,906 contracts while the March euro lost approximately 1.42 cents. This is bullish open interest action relative to the price decline. As this report is being compiled, euros trading 1.03 cents lower and has made a new low for the move at 1.3317. The decline of open interest is positive, and the euro remains on a short and intermediate term buy signal. We could see the euro move down to its 50 day moving average of 1.3270.

S&P 500 E mini:

The S&P 500 E mini ain’t 1.00 point on light volume of 1,272,090 contracts. Open interest increased by 6845 contracts, which in relation to volume is approximately 75% below average. As we said in yesterday’s report there is a massive divergence between the number of stocks above their 50 day moving averages, which peaked at 2115 on January 22 and have declined to 1896 on February 13. From January 22, through February 13, the S&P 500 cash index has advanced 27.77 points, but the number of stocks above their 50 day moving averages have declined by 219 issues or approximately 10.00%. As of February 13, the number of stocks above their 50 day moving averages is the lowest since January 2. From January to through February 13, the S&P 500 cash index has advanced 94.14 points or 6.60%. In other words, as the market has advanced substantially, the number of stocks above their 50 day moving averages have been declining. We expect this trend to continue. Stand aside.