Soybeans:

May soybeans lost 26.75 cents on very heavy volume of 393,491 contracts. Volume was the highest since July 19, 2012 when 399,183 contracts were traded and May soybeans closed at $14.50 1/2. On February 22, total open interest declined 10,475 contracts, which in relation to volume is average. The March contract accounted for loss of 32,463 of open interest. The soybean market witnessed a key reversal day after making a high at 14.97 and reversing intraday to make a low of 14.42. The high on Friday came within 2 3/4 cents of matching the high of 14.99 made on November 1. Despite the move on February 22, soybeans remain on a short-term buy signal and an intermediate term sell signal. Stand aside.

Soybean meal:

May soybean meal lost $9.30 on volume of 125,673 contracts. Volume was the highest since February 19 when 127,471 contracts were traded and soybean meal closed $15.90 higher while open interest increased by 885 contracts. On February 22, open interest declined by 1,835 contracts, which in relation to volume is approximately 40% below average. The March contract accounted for loss of 7,549 of open interest. Like soybeans, May soybean meal made a new high for the move and reached 443.90, which was the highest price since December 17 when meal made a high of 445.00 and closed at $438.50. Soybean meal remains on a short and intermediate term sell signal. Stand aside.

Soybean oil:

May soybean oil lost 95 points on volume of 144,233 contracts. Volume was the highest since February 21 when 158,451 contracts were traded and soybean oil declined 46 points while open interest declined by 5,282 contracts. On February 22, open interest increased by 418 contracts, which in relation to volume is approximately 75% below average. The March contract lost 7,963 of open interest, but there were sufficient numbers of new entrants into the market to bring the open interest number positive. The increase of open interest on a decline of the magnitude seen on February 22, is decidedly bearish. It is highly likely that soybean oil will generate a short-term sell signal on February 25. Stand aside.

Corn:

May corn lost 1.25 cents on volume of 314,204 contracts. Open interest declined by a massive 39,148 contracts, which in relation to volume is approximately 400% above average, meaning that liquidation was extremely heavy. The March contract accounted for loss of 55,537 of open interest. Although the March- May spread widened to 6.00 cents, corn has not been responding positively to this. As we said in the February 24 Weekend Wrap there is a zeitgeist of bearishness throughout the entire commodity complex. We think that clients should maintain a bearish bias for the complex until such time that an individual commodity shows that it can buck this trend. The only candidate in this regard seems to be cotton, but as we said in the Weekend Wrap, China has burdensome supplies and global consumption is not very good either. Stand aside.

Wheat:

May wheat lost 5.25 cents on volume of 140,496 contracts. Volume shrank approximately 46,000 contracts from February 21 when wheat lost 17.25 cents and open interest declined 7,252 contracts. On February 22, open interest declined by 10,916 contracts, which in relation to volume is approximately 210% above average, meaning that liquidation was extremely heavy. As this report is being compiled on February 25, May wheat is trading 12.25 cents lower. Stand aside.

Crude oil: On February 22, crude oil generated a short-term sell signal.

April crude oil gained 29 cents on very light volume of 395,138 contracts. Volume was the lightest since January 28 when 393,687 contracts were traded and April crude oil closed at $96.87. On February 22, open interest increased by 4,864 contracts, which in relation to volume is approximately 40% below average. We encourage our readers to implement bearish positions. As we said in the Weekend Wrap, crude oil may not rally much because it is trading on the cusp of its 50 day and 50 week moving averages. On February 25, crude oil has made a high of $94.46, but has sold off and is trading unchanged on the day. As we have said before, we prefer options on futures because of the possibility of a flare up in the Middle East. Without this, we believe crude oil is headed lower, and the correction in the equities market along with the sequester on March 1 will add further pressure. Although crude has generated a short-term sell signal, it still remains on an intermediate term buy signal.

Copper:

May copper lost 1.90 cents on heavy volume of 106,145 contracts. Volume shrank approximately 22,000 contracts from February 21 when May copper lost 5.50 cents and open interest declined 6,568 contracts. On February 22, open interest declined 7,775 contracts, which in relation to volume is approximately 55% less than average. For the past 4 trading sessions beginning on February 19, open interest has declined 12,360 contracts while copper has declined 20.30 cents. On February 21, copper generated a short and intermediate term sell signal, but clients should wait for a rally to the $3.62-3.64 area before implementing bearish positions.

Gold:

April gold lost $5.80 on volume of 153,015 contracts. Volume was the lightest since February 13 when 146,851 contracts were traded and gold closed at 1645.10. On February 22, open interest declined by 528 contracts, which is minuscule and dramatically below average. Last week, the 50 day moving average crossed below the 200 day moving average,, which will only increase the bearish outlook of gold by the investment community. The level of support to focus on is the December 29, 2011 low of $1523.90. However, gold is massively oversold relative to its 50 and 200 day moving averages of 1661.50 and 1663.75 respectively. Stand aside.

Platinum: On February 22, platinum generated a short-term sell signal.

April platinum lost $12.60 on volume of 10,765 contracts. Open interest declined by a massive 1,013 contracts, which in relation to volume is approximately 275% above average, meaning that liquidation was extremely heavy. Although platinum has generated a short-term sell signal, it remains on an intermediate term buy signal. Stand aside.

Silver:

March silver lost 23.9 cents on very light volume of 59,598 contracts. Volume was the lightest since February 14 when 57,477 contracts were traded and March silver closed at $30.353. On February 22, open interest increased by 595 contracts, which in relation to volume is approximately 50% below average. Silver generated a short-term sell signal on February 12, and since then has fallen approximately $2.50 to the low made on February 20 of $28.255. The market is overdue for a good-sized rally.

Euro:

The March euro gained 9 points on volume of 284,146 contracts. Open interest declined by 5,440 contracts, which in relation to volume is approximately 25% less than average. During the past 12 days, open interest has declined 29,241 contracts while the March euro lost 4.28 cents. This is bullish open interest action relative to the price decline. Long positions should not be taken despite the massive correction. As of February 25, the euro remains on a short and intermediate term buy signal. The dollar index has broken through a number of resistance points, and looks to head higher, although it is massively overbought and should have a correction. Stand aside.

S&P 500 E mini:

The S&P 500 E mini gained 13.00 points on volume of 1,775,046 contracts. Open interest increased by 11,707 contracts, which in relation to volume is approximately 60% less than average. As we have indicated on a number of occasions, we think the market correction has begun and the most conservative strategy we can recommend is to write calls on out of the money options for the S&P 500 E mini.