Comments or questions: garry@openinterestanalyst.com

March soybeans gained 4 cents on volume of 156,483 contracts. Open interest increased by a massive 10,170 contracts, which in relation to volume is approximately 160% above average, meaning that new buyers were entering the market and pushing prices higher, but there was aggressive selling which kept a lid on prices. The March contract lost 1,690 contracts of open interest.

On January 29, March soybeans generated a short-term buy signal.

From January 18 through January 29 (6 sessions) soybean open interest has increased by 37,531 contracts while soybeans have advanced 21.50 cents. As we said in yesterday’s report, it appears that heavy trade selling has been keeping prices from advancing further. However, this appears to have changed on January 30 as March soybeans are trading 24.75 cents higher and has made a new high for the move at $14.81 3/4. 

Soybean meal:

March soybean meal gained $3.40 on volume of 63,940 contracts. Open interest increased by 4,190 contracts, which in relation to volume is approximately 160% above average. From January 14 through January 29, open interest has increased by 35,658 contracts while March soybean meal has advanced $19.40. Like soybeans, soybean meal has been affected by commercial selling, which is keeping a lid on prices. As this report is being compiled on January 30, March soybean meal has made a new high for the move at 434.30. It is likely that soybean meal will generate a short-term buy signal on January 31.

Soybean oil:

March soybean oil lost 18 points on volume of 75,474 contracts. Open interest increased by 2,438 contracts, which in relation to volume is approximately 20% above average. Soybean oil generated a short-term buy signal on January 15, and it appears likely that soybean oil will generate an intermediate term buy signal this week.

Corn:

March corn gained 0.25 cents on volume of 203,982 contracts. Open interest increased by a massive 10,097 contracts, which in relation to volume is approximately 90% above average. For the past 4 sessions beginning on January 24 through January 29, open interest has increased by 30,060 contracts and March corn has advanced 8.75 cents. Like soybeans, and soybean meal, the massive increase of open interest is disproportionate high to the price advance, which to us indicates fairly aggressive trade selling. As this report is being compiled, March soybeans are trading 6.50 cents higher and has made a new high for the move at $7.41. On January 22, March corn generated a short-term buy signal.

Wheat:

March wheat declined by 2.25 cents on light volume of 55,304 contracts. Open interest increased by 1,624 contracts, which in relation to volume is approximately 20% above average. During January 16 through January 28, open interest and price action has been acting in a bullish congruent fashion. January 29 was the first day the pattern deviated. Stand aside.

Crude oil:

March crude oil gained $1.13 on heavy volume of 649,676 contracts. Volume was the highest since January 23 when 950,824 contracts were traded and crude oil lost $1.45, while open interest increased by 15,463 contracts. On January 29, open interest increased by 27,653 contracts, which in relation to volume is approximately 60% above average, which is a massive increase for crude oil. Crude oil made a high of $97.82, which is the highest price since $98.34 on September 18. As this report is being compiled, crude oil has made another new high at $98.24. Although we have been bullish on crude oil since it generated a short and intermediate term buy signal on January 2 and January 3 respectively, the market has not had a correction. As we have advised before, do not chase the market because it can turn lower at any time.

Natural gas:

March natural gas lost 4.7 cents on volume of 268,841 contracts. Open interest declined by 8,941 contracts, which in relation to volume is approximately 30% above average. Stand aside.

Copper:

March copper gained 3.00 cents on volume of 56,228 contracts. Volume was the highest since January 22 when 68,405 contracts were traded and open interest increased by 2,077 contracts while March copper advanced 2.60 cents. On January 29, open interest increased by 3,319 contracts, which in relation to volume is approximately 130% above average, meaning that buyers were very aggressive and moving prices higher. As this report is being compiled, March copper has advanced 5.85 cents.

 Gold:

April gold advanced $9.80 on heavy volume of 281,578 contracts. Volume declined by approximately 14,000 contracts from January 28 when gold lost $3.70 and open interest declined by 19,020 contracts. On January 29, open interest declined by 8,200 contracts, which in relation to volume is approximately 20% above average. During the past 3 days beginning on January 25, open interest has declined by 27,479 contracts while gold has declined by $7.20. This is bullish congruent open interest and price action. In the report of January 28, we commented on high volume on the decline and a massive decrease of open interest, which we thought could signal a bottom or temporary bottom. As this report is being compiled on January 30, gold is trading $18.60 higher and has made a new high for the move at $1684.00. Despite the rally on January 30, gold remains on a short and intermediate term sell signal. Also, gold continues to trade below its 50 day moving average of 1689.30 on the gold continuation chart.

Platinum:

April platinum gained $16.70 on volume of 10,239 contracts. Open interest declined by 90 contracts which is minuscule and dramatically below average. Interestingly, on January 30 when gold is up nearly $18.00, platinum has advanced only $9.60. This is the first time in recent weeks that gold is rallying more than platinum.

Silver:

March silver gained 40.4 cents on light volume of 35,080 contracts. Open interest declined by 465 contracts, which in relation to volume is approximately 45% less than average. On January 23, March silver generated a short-term sell signal, and then pulled back, which is to be expected once a buy signal is generated. However, the market pulled back much further than we anticipated. As this report is being written, silver is trading 99.3 cents higher. It appears that silver is ready to make a more significant move. It may take another two days before silver generates an intermediate term buy signal.

Euro:

The March euro gained 31 points on volume of volume of 275,865 contracts. Open interest increased by 3,552 contracts, which in relation to volume is approximately 45% less than average. The euro is beginning to approach December 2011 the highs, and although the market is overbought relative to its 50 day moving average of 1.3146, the professional money crowd is getting increasingly bullish, which worries us. Not because we don’t think the market is going to move higher, but because the increasing bullishness means that a setback is imminent.

S&P 500 E mini:

The S&P 500 E mini gained 8.00 points on volume of 1,504,735 contracts. Open interest increased by 27,848 contracts, which in relation to volume is approximately 10% less than average. The market remains overbought, and we caution against getting long at current levels in the major indices.