Soybeans:

May soybeans advanced 5.75 cents on volume of 247,535 contracts. Total open interest increased by 6,797 contracts, which relative to volume is average. The March contract lost 17,494 of open interest, which makes the total open interest increase much more impressive (bullish). As this report is being compiled on February 21, May soybeans are trading 5.50 higher and have made a new high for the move at 13.72 1/4. The market continues to grind higher, despite a very poor export sales report. The fact that soybeans are moving higher under the current circumstances bodes well for higher prices. We have no recommended position in soybeans. Soybeans remain on a short and intermediate term buy signal.

The USDA reported that 86.2 thousand metric tons (tmt) were sold in the recent reporting period, which brings total commitments for the season to 1.587.9 billion bushels (bb) versus USDA projections for the season of 1.510 bb.

Soybean meal:

May soybean meal advanced 50 cents on healthy volume of 107,676 contracts. Total open interest increased by 2,948 contracts, which relative to volume is average. The March contract lost 10,714 of open interest. As this report is being compiled on February 21, May soybean meal has taken out yesterday’s high of 438.50 and is trading $4.50 higher on the day. Soybean meal remains on a short and intermediate term buy signal. We have no recommendations for soybean meal.

The USDA reported that 227.4 tmt of soybean meal have been sold, which brings total commitments to 7293.2 tmt versus USDA projections for the entire season of 9888 tmt.

Soybean oil:

May soybean oil advanced 30 points on volume of 146,238 contracts. Total open interest declined by 5,133 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly heavy on the advance. This is bearish open interest action relative to the price advance. The March contract lost 10,784 of open interest. As this report is being compiled on February 21,  May soybean oil has made a new high for the move at 41.29. Maintain bullish positions, and move  sell stops to at least break even.

The USDA reported that 11.8 tmt of soybean oil had been sold, which brings total commitments to date of 531 tmt versus USDA projections for the season of 657.7 tmt.

Corn:

May corn advanced 2.00 cents on strong volume of 455,739 contracts. Volume shrank by nearly 100,000 contracts from February 19 when corn advanced 4.25 cents and total open interest increased by 7287 contracts. On February 20, total open interest increased again, this time by 6,562 contracts, which relative to volume is approximately 40% less than average. The March contract lost 23,761 of open interest. As this report is being compiled on February 21, May corn is trading 1.75 cents lower. Corn remains on a short and intermediate term buy signal. We have no recommended positions.

The USDA reported that 691.4 tmt  of corn had been sold, which brings total commitments to 1.389.5 bb versus the USDA projection for the entire season of 1.600 bb. The export pace of corn is the best since 2007-2008.

Chicago wheat:

May Chicago wheat closed unchanged on strong volume of 172,587 contracts. Volume was the highest since February 12 when 181,730 contracts were traded and wheat declined 3.25 cents while total open interest declined by 2,453 contracts. On February 20, total open interest declined again, this time by 3,596 contracts, which relative to volume is approximately 20% below average. The March contract lost 21,103 of open interest, which means there was significant open interest increases in the forward months to bring the total number below average. As this report is being compiled on February 21, May wheat is trading 5.75 cents lower. If long, move sell stops up to at least break even and consider taking partial profits.

Kansas City wheat:

May Kansas City wheat advanced 2.00 cents on volume of 28,534 contracts. Total open interest increased by 189 contracts, which relative to volume is approximately 65% less than average. The March contract lost 4,813 of open interest, which means there was enough open interest increases in the forward months to bring the total number positive. Remarkably, the open interest increase on February 20 is the first since KC wheat generated a short-term buy signal on February 5. During this time, May KC wheat rallied 42.50 cents. Based upon OIA’s experience, we suspect the trend followers are beginning to get on board, which increases the likelihood of a pullback, which is overdue. The 20 day moving average is $6.43 7/8 and May KC wheat closed at 6.83 3/4 on February 20. We recommended bullish positions in the report of February 6, and the market has never had a correction of the move that began on January 31. Although we think wheat is headed higher, we think taking partial profits makes sense at this juncture.

The USDA reported that sales for all wheat categories totaled 424.5 tmt, which brings total commitments for the season to date of 1.018.4 bb versus USDA projections for the season, which ends on May 31 of 1.175 bb.

Sugar #11:

May sugar lost 16 points on volume of 141,952 contracts. Volume declined from the 192,267 contracts traded on February 19 when May sugar advanced 35 points and total open interest declined by 4,658 contracts. On February 20, total open interest declined by 5,170 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly heavy on the decline. As this report is being compiled on February 21, May sugar is trading 43 points higher and has made a new high for the move at 17.14, which is the highest price for the May contract since December 2 when the print was 17.32. On February 19, May sugar generated a short-term buy signal, and it is conceivable and intermediate term buy signal will be generated next week. The upcoming COT report will let us know the extent to which managed money has liquidated their short positions. We have no recommended positions.

Live cattle:

April live cattle advanced 5 points on volume of 34,077 contracts. Total open interest increased by 1,880 contracts, which relative to volume is approximately 120% above average, meaning that longs and shorts engaged in a battle, but neither side was able to move the market. The February contract lost 1,090 of open interest. As this report is being compiled on February 21, April cattle is trading 12.5 points lower, while April hogs are trading 1.25 cents higher. Maintain bullish cattle positions and the short call position recommended on January 30.

WTI crude oil:

April WTI crude oil lost 9 cents on very light volume of 418,609 contracts. Volume was the lightest since January 29 when 416,634 contracts were traded and April WTI closed at $96.88. On February 20, total open interest declined by 4,676 contracts, which relative to volume is approximately 45% less than average. The March contract accounted for loss of 27,834 contracts. As this report is being compiled on February 21, April WTI is trading 45 cents lower and has made a daily low of $101.69, which is its lowest price since February 18 of $100.05. We have no recommended position in WTI. It remains on a short and intermediate term buy signal.

Natural gas:

March natural gas lost 8.5 cents on volume of 481,576 contracts. Total open interest declined by 20,653 contracts, which relative to volume is approximately 55% above average meaning that liquidation was fairly heavy on a modest decline. The March contract accounted for loss of 21,085 of open interest. March natural gas made a new high for the move the move at $6.40, yet volume was the lowest since February 11 when 414,978 contracts were traded. As this report is being compiled on February 21, March natural gas is trading 10.4 cents higher but has not taken out yesterday’s high. Continue to be a spectator, rather than a speculator in natural gas.

Euro:

The March euro lost 24 pips on volume of 183, 369 contracts. Total open interest increased by 1,590 contracts, which relative to volume is approximately 60% less than average. As this report is being compiled on February 21, the March euro is trading 23 pips higher, but has not taken out yesterday’s high of 1.3762. The euro remains on a short and intermediate term buy signal. We have no recommendations in the euro.

British pound:

The March British pound lost 37 pips on volume of 99,668 contracts. Volume was the lowest since February 14 when 95,944 contracts were traded and the March pound advanced 88 pips while open interest increased by 5,063 contracts. On February 20, total open interest increased by 2,718 contracts, which relative to volume is average. As this report is being compiled on February 21, the March pound has made a low of 1.6608, which is its lowest print since 1.6597, the low on February 13. We have no recommendations in the British pound.

Yen:

The March yen lost 2 pips on light volume of 161,221 contracts. Total open interest increased by 4,995 contracts, which relative to volume is approximately 20% above average. As this report is being compiled, the March yen is trading 30 pips lower and has made a low of .9725, which is its lowest price since .9717, the low made on January 31. The most recent high occurred on February 4 at .9927, and the market has been drifting lower ever since. Although open interest action relative to price has been positive for the most part, it appears that the March yen may continue drifting lower to its 50 day moving average of .9683. However, the yen is trading rather positively considering that the Nikkei is up sharply and US indices are trading higher as well. The yen remains on a short-term buy signal, but an intermediate term sell signal. We have no recommendations the yen.

Gold:

April gold lost $3.50 on volume of 144,778 contracts. Total open interest declined by 3,788 contracts, which relative to volume is average. It is positive to see open interest decrease on a decline in price. On February 20, April gold made a low of 1307.10, which is its lowest print since February 14 of $1299.90. As this report is being compiled on February 21, April gold is trading $2.80 higher and has made a daily high of 1328.80. Maintain bullish positions recommended in the February 6 report. The setbacks continue to be shallow, and this is not offering much of an opportunity for potential participants to get long.

Silver:

March silver lost 16.6 cents on heavy volume of 85,617 contracts. Total open interest increased by 3,318 contracts, which relative to volume is approximately 50% above average. The hefty build of open interest is negative, however, open interest increases have been few and far between on rallies, meaning that new longs have not entered the market in sufficient numbers to liquidate on declines. As this report is being compiled on February 21, March silver is trading 10.3 cents higher and has made a daily high of 21.975, which is near the previous high of 21.98 made on February 18. Maintain long straddles or strangles and long call positions recommended in the February 6 report.

S&P 500 E mini:

The S&P 500 E mini gained 10.75 points on volume of 1,617,390 contracts. Total open interest increased by 20,946 contracts, which relative to volume is approximately 45% less than average. Continue to maintain long put protection if holding long equity positions.