Comments or questions:  garry@openinterestanalyst.com

Soybeans:

March soybeans gained 6.75 cents on volume of 159,113 contracts. Open interest increased by 5,393 contracts, which in relation to volume is approximately 25% above average. Soybeans made a high of $14.52 1/2 which is the highest price since January 23 when beans reached 14.58. From January 18 through January 28 (6 sessions), open interest has increased by 27,361 contracts, while March soybeans have advanced 17.50 cents. While the open interest increase is positive in relation to price, the fact that is taken a large open interest number to move soybeans higher indicates it is likely commercial selling is taking place on the rally. The market has been trading in a sideways to higher pattern, but soybeans remain on a short and intermediate term sell signal. Stand aside.

Soybean meal:

March soybean meal gained $3.90 on volume of 63,748 contracts. Open interest increased by a massive 5,925 contracts, which in relation to volume is approximately 250% above average. From January 14 through January 28, open interest has increased by 32,468 contracts while March soybean meal advanced $16.00. Like soybeans, soybean meal has seen a massive increase in open interest, but this has not moved soybean meal significantly higher. Soybean meal remains on a short and intermediate term sell signal. Stand aside.

Soybean oil:

March soybean oil lost 21 points on volume of 65,697 contracts. Open interest increased by 4,005 contracts, which in relation to volume is approximately 140% above average. Soybean oil generated a short-term buy signal on January 15, but has not generated in intermediate term buy signal.

Corn:

March corn gained 8.50 cents on volume of 172,872 contracts. Volume declined by approximately 6,500 contracts from January 25 when corn lost 3.50 cents and open interest increased by 3,597 contracts. On January 28, open interest increased by 3,916 contracts, which in relation to volume is average. On January 22, March corn generated a short-term buy signal, but has not yet generated in intermediate term buy signal. We think the path of least resistance is higher for corn.

Wheat:

March wheat lost 2.75 cents on volume of 52,778 contracts. Open interest declined by 2,265 contracts, which in relation to volume is approximately 60% above average. Although wheat has not generated a short or intermediate term buy signal, open interest action relative to price has been acting in a bullish congruent fashion from January 16 through January 28. This means that open interest increases when prices advance and when price declines so does open interest. Stand aside.

Crude oil:

March crude oil advanced 56 cents on volume of 393,687 contracts. Volume was the lowest since December 31 when 251,281 contracts were traded and crude oil advanced by $1.02 and open interest increased by 5,796 contracts. On January 28, open interest increased by 714 contracts which is minuscule and dramatically below average. As this report is being compiled on January 29, crude oil is trading $1.27 higher and has made a new high for the move at $97.82. On January 2, crude oil generated a short-term buy signal and on January 3 generated an intermediate term buy signal. The market remains overbought, and it is dangerous to chase it at current levels.

Natural gas:

March natural gas lost 15.8 cents on volume of 363,597 contracts. Open interest declined by 10,066 contracts, which in relation to volume is average. Stand aside.

Copper:

March copper gained .0095 cents on volume of 45,367 contracts. Open interest declined by 119 contracts, which is minuscule and dramatically below average. As we’ve said before, we do not see a compelling trade in copper despite it being on a short and intermediate term buy signal.

Gold:

February gold lost $3.70 on heavy volume of 295,408 contracts. Volume was the highest since November 28 when 486,308 contracts were traded and February gold lost $25.80, while open interest declined by 27,236 contracts. On January 28, open interest declined by 19,020 contracts, which in relation to volume is approximately 150% above average. Although volume was considerably heavier on November 28 and open interest declined by a greater amount than January 28, the open interest decline relative to volume on November 28 was 125% above average, versus 150% above average on January 28. In short, liquidation on January 28 relative to volume was heavier than on November 28. Gold made a low of $1651.00, which is slightly below 1651.30, which was the low on January 9. Very often major lows are made on heavy volume and large open interest declines. We are not saying that gold has made a definitive low. It may have to do more work around current levels before this occurs. On January 4, February gold made a spike low at 1626.00 and declined by $25.70 while open interest declined 5,301 contracts.

Platinum:

April platinum lost 32.70 on volume of 13,140 contracts. Open interest increased by 280 contracts, which in relation to volume is approximately 5% below average. Platinum remains overbought, and if clients want to participate on the long side of platinum with less risk, please see the January 27 Weekend Wrap. We made two recommendations of platinum and palladium mining stocks. At current levels, it is too dangerous to get long futures.

Silver:

March silver lost 42.6 cents on volume of 40,198 contracts. Volume was lower than January 25 when silver lost 51.6 cents and 46,387 contracts were traded, while open interest increased by 1,242 contracts. On January 24, silver lost 71.7 cents on volume of 55,573 contracts while open interest increased by 4,156 contracts. On January 28, open interest declined by 596 contracts, which in relation to volume is approximately 40% below average. March silver made a new low for the move at $30.745, which is the lowest price since January 14 when March silver made a low of $30.38. On January 23, March silver generated a short-term buy signal, and as we said at the time, the market would pull back. It has pulled back, and yesterday we thought it was possible a short-term sell signal would be generated on January 29, but this will not occur.

Euro:

The March euro lost 9 points on light volume of 214,774 contracts. Open interest increased by 4,154 contracts, which in relation to volume is approximately 5% below average. As this report is being compiled on January 29, the euro has made a new high for the move at 1.3501. We have been bullish on the euro ever since a short-term buy signal was generated on December 3, which confirmed the intermediate term buy signal. We continue to think the euro will continue to move higher.

S&P 500 E mini:

The S&P 500 E mini gained 1.25 points on light volume of 1,210,245 contracts. Open interest declined by 3,685 contracts, which is minuscule and dramatically below average. As we have said before, clients should avoid being long the indices, but instead look for stocks that have corrected close to their 50 day moving average in favored sectors. We like chemicals and oil service sectors.