Soybeans:

May soybeans lost 11.50 cents on volume of 159,603 contracts. Volume fell approximately 37,000 contracts from March 13 when May soybeans lost 21.75 cents and open interest declined 4,277 contracts. On March 14, open interest increased by 586 contracts which is minuscule and dramatically below average. Since reversing on March 13, soybeans have been trading in a manner that suggests further downside. As this report is being compiled, soybeans are trading 8 cents lower and have made a new low for the move at $14.27 1/4. Beginning on March 11, the highs have been lower and the lows have been lower and this continues on March 15. Everyone should be out of long positions in futures and options and on the sidelines. Despite the move lower on the 15th, soybeans will not generate a short or  intermediate term sell signal.

Soybean meal:

May soybean meal lost $3.90 on light volume of 51,317 contracts. Volume fell approximately 26,000 contracts from March 13 when May soybean meal lost $7.30 and open interest declined 2,268 contracts. On March 14, open interest increased 847 contracts, which in relation to volume is approximately 35% less than average. Beginning on March 11, highs and lows have been irregularly lower. Since reversing on March 13, everyone should be out of long futures and options positions and on the sidelines. Soybean meal will not generate a short or intermediate sell signal on March 15.

Soybean oil:

May soybean oil lost 18 points on volume of 66,120 contracts. Volume declined approximately 19,000 contracts from March 13 when soybean oil lost 46 points and open interest increased 4,017 contracts. On March 14, open interest increased 2,919 contracts, which in relation to volume is approximately 70% above average. For the past 3 days, open interest has increased 7,948 contracts while May soybean oil has lost 1.10 cents. This is bearish open interest action relative to the price decline. At this juncture it appears that the soybean complex is headed for short and intermediate term sell signals next week.

Corn:

May corn gained 6.50 cents on volume of 199,612 contracts. Volume cell approximately 59,000 contracts from March 13 when corn lost 4 cents and open interest increase 5,122 contracts. On March 14, open interest increased by a massive 23,201 contracts, which in relation to volume approximately 360% above average. This is an astounding number relative to volume and it has been awhile since open interest increased as much as it did on March 14. Despite the massive increase of open interest, corn was unable to break through the high of March 12 and March 13 of $7.17 3/4, which indicates that heavy selling was keeping a lid on the price advance. On March 15, corn made a new high for the move at $7.19 3/4, but is trading 1.50 cents lower. Corn remains on a short and intermediate term sell signal.

Wheat:

May wheat advanced 14.75 cents on volume of 116,608 contracts. Volume declined approximately 11,000 contracts from March 13 when wheat advanced 6.50 cents and open interest declined 4,889 contracts. On March 14, open interest declined 7,772 contracts, which in relation to volume is approximately 160% above average, meaning that liquidation was heavy. During the past 2 trading sessions, open interest has declined 12,661 contracts while May wheat has advanced 21.25 cents. This is bearish open interest action relative to the price advance. As this report is being compiled, wheat is made a high of $7.25, which is a half cent shy of the high on March 14, and is trading 5.75 cents lower. Wheat remains on a short and intermediate term sell signal. Stand aside.

Crude oil:

April crude oil gained 51 cents on light volume of 442,295 contracts. Volume was the lightest since March 11 when 429,602 contracts were traded and crude oil advanced 11 cents, while open interest increased 9,936 contracts. For the past 3 days open interest has declined 19,914 contracts while crude oil has advanced 97 cents. This is bearish open interest action relative to the price advance. However, since making its bottom of $89.33 on March 4 through March 14, open interest has increased 33,512 contracts, while crude oil prices have advanced $2.35. This is bullish congruent open interest and price action. Though, crude oil prices have rallied, the price advance appears to be labored without much conviction. On March 15, the dollar is sharply lower, and was lower on March 14 as well. Despite this, crude oil is only getting a modest boost trading 46 cents higher and has made a new high for the move at $93.84. We expect further downside action in the dollar, which may act to boost crude oil prices a bit more. But at this juncture, we feel the upside is limited. Crude oil remains on a short and intermediate term sell signal. 

Natural gas:

April natural gas advanced 13.2 cents on huge volume of 758,506 contracts. Volume was the highest since October 11, 2012 when 792,388 contracts were traded and April natural gas closed at $3.94. On March 14, open interest increased by a massive 28,319 contracts, which in relation to volume is approximately 50% above average. Since March 7, natural gas has gone from a low of $3.460 to a high of 3.924 on March 15. This is the highest price for April natural gas since November 26, 2012 when it reached $3.943. Based upon the volume and open interest of March 14, and what we project the volume to be on the 15th, market participants are rapidly rushing in to buy natural gas. Natural gas is massively overstretched, and we recommend taking partial profits on positions that were entered into at significantly lower levels. April natural gas generated a short-term buy signal on March 1 and an intermediate term buy signal on March 8.

Copper:

May copper advanced 1.15 cents on volume of 50,036 contracts. Open interest increased 1,590 contracts, which in relation to volume is approximately 20% above average. Copper continues to trade in a weak fashion, and we see lower prices ahead, but do not recommend chasing the market at current levels. Copper remains on a short and intermediate term sell signal.

Gold:

April gold gained $2.30 on volume of 171,169 contracts. Open interest declined 1,971 contracts, which in relation to volume is approximately 45% less than average. The sharply lower dollar is not boosting the price of gold, nor did it during yesterday’s session. The market looks tired, and we expect lower prices ahead. Gold remains on a short and intermediate term sell signal. A more conservative way of trading gold and taking advantage of its lackluster trading activity is to write out of the money calls.

Platinum:

April platinum lost $3.30 on volume of 11,566 contracts. Open interest declined 206 contracts, which in relation to volume is approximately 25% less than average. Platinum remains on a short and intermediate term sell signal. Stand aside.

Silver:

May silver lost 15.1 cents on volume of 46,535 contracts. Volume was the highest since March 8 when 54,354 contracts were traded and silver advanced 14 cents while open interest declined 1,322 contracts. On March 14, open interest increased 824 contracts, which in relation to volume is approximately 35% less than average. Silver remains on a short and intermediate term sell signal. Stand aside.

Euro:

The March euro gained 39 points on heavy volume of 443,212 contracts. Volume was the highest since February 26 when 452,787 contracts were traded and the March euro closed at 1.3056. On March 14, open interest increased 1,565 contracts, which in relation to volume is approximately 80% less than average.

From the March 13 report:

“On March 14, the euro made a fractionally lower low at 1.2911. As we have pointed out before, often a large increase in volume accompanied by a large increase/decrease of open interest can signal a bottom or temporary bottom.”

As this report is being compiled, the June euro is trading 60 points higher and has made a high of 1.3115. The euro remains on a short and intermediate term sell signal. In the upcoming Weekend Wrap, we will discuss target areas to implement bearish positions.

S&P 500 E mini:

The S&P 500 E mini advanced 6.00 points on volume of 1,901,939 contracts. Volume was the lowest since February 22 when 1,775,046 contracts were traded and the S&P 500s E mini advanced 13.00 points while open interest increased 11,707 contracts. On March 14, open interest declined by 44,482 contracts, which in relation to volume is approximately 5% below average. Undoubtedly, the decline of open interest is due to the expiration of the March contract. On March 14, stocks trading above their 50 day moving average on the NYSE rose to 1710 from 1653 on March 13. New highs minus new lows on the NYSE jumped to 985 from 618 stocks on March 13. Although it appears the major indices want to go higher, it will be a slow grind up, which will benefit sellers of calls that are significantly out of the money.