OIA is having technical difficulties and apologizes for the late report.

Soybeans:

May soybeans advanced 14.75 cents on volume of 280,786 contracts. Total open interest increased by 5,274, which relative to volume is approximately 25% less than average. The March contract lost 14,698 of open interest. As this report is being compiled on February 25, May beans are trading 9.50 higher and have made a new high for the move at 13.88 1/2. Soybeans have been buffeted by hot dry weather and now by excessive rain. Additionally, the USDA announced the sales of 568,000 tons of soybeans to an unknown destination. We have no recommended position in soybeans.

Soybean meal:

May soybean meal gained $8.50 on volume of 100,108 contracts. Total open interest declined by 251 contracts, which is minimal. The March contract lost 9,348 of open interest. As this report is being compiled on February 25, May meal is trading $4.60 higher and has made a new high for the move at $453.60. We  do not have a recommended position at this time.

Soybean oil:

May soybean oil  lost 20 points on volume of 117,398 contracts. Total open interest declined by a massive 8,413 contracts, which relative to volume is approximately 185% above average meaning that liquidation was very heavy. The March contract lost 9,915 of open interest. The May contract made a new high for the move at 41.42, and as this report is being compiled on February 25, May oil is trading 17 points lower and has not taken out yesterday’s high. Maintain bullish positions recommended on February 10.

 Chicago wheat:

May Chicago wheat advanced 11.50 cents on volume of 120,286 contracts. Total open interest declined by a massive 10,592 contracts, which relative to volume is approximately 250% above average meaning that liquidation was off the charts heavy. The March contract lost 11,974 of open interest. In the February 20 report, we suggested that clients take partial profits in Chicago wheat, and move up sell stops on remaining positions.

Kansas City wheat:

May KC wheat advanced 8.50 cents on volume of 26,735 contracts. Total open interest declined by 1,307 contracts, which relative to volume is approximately 100% above average meaning liquidation was very heavy on the advance. The March contract lost 3,649 of open interest. As this report is being compiled on February 25, May KC wheat is trading 4.25 cents higher. Like Chicago wheat, we recommend that clients take partial profits in their KC positions and move up sell stops on remaining positions.

Live cattle:

April live cattle declined 22.5 points on volume of 41,444 contracts. Total open interest increased by 1,796, which relative to volume is approximately 65% above average.  The February contract lost 1,421 of open interest. As this report is being compiled on February 25, April cattle is trading 1.275 cents higher. Maintain bullish positions recommended in late December and the short call position recommended on January 30. 

Sugar #11: On February 24, May sugar generated an intermediate term buy signal after generating a short-term buy signal on February 19.

May sugar advanced 61 points on huge volume of 368,236 contracts. Volume was the highest since October 18 when sugar topped out on volume of 399,832 contracts. On February 24, total open interest declined by only 6,033 contracts, which relative to volume is approximately 35% less than average. The March contract lost 23,o12 of open interest, and there were open interest increases in the May- October 2014 contracts, which offset a good portion of March’s decline. The action yesterday spells bad news for bears. With the relatively heavy short position of managed money, there should have been open interest declines across the board. From February 12 February 24, May sugar has advanced 1.95 cents, but total open interest has declined only 17,517 contracts. Sugar is due for a big correction, but we advise against shorting this market.

From the February 21 report:

The open interest increase on Friday is bad news for shorts because there has been surprisingly small open interest declines since the beginning of the move on February 12. For example, from February 12 through February 21, May sugar advanced 1.34 cents, however total open interest declined only 11,484 contracts. What’s worse, is from the very beginning of the move on January 30 through February 21, total open interest has declined only 15,722 contracts while May sugar has advanced 2.12 cents. Speculators who are playing the short side of the market are getting murdered as sugar skyrockets and are refusing to liquidate. On February 19, May sugar generated a short-term buy signal, and will generate an intermediate term buy signal on February 24. Frankly, we don’t think this is a move that should be played on the long side because the catalyst for it has been dry conditions in Brazil. However, sugar fundamentals are distinctly bearish, and once shorts get blown out of the market, we expect sugar to resume its decline.

WTI crude oil:

April WTI crude gained 62 cents on very light volume of 370,732. Volume was the lowest since December 31. On February 24, total open interest advanced by a  heavy 14,956 contracts, which relative to volume is approximately 55% above average. There were open interest increases in the April-December 2014 contracts.   The high on Monday was $103.45, which is only slightly above the high of 103.29 made on February 19. Based upon very low volume and the hefty increase of open interest, it appears that new foolish money was getting long at the top of the trading range. Keep in mind that the latest COT report showed managed money long WTI crude by a ratio of 15.20:1, which is the highest in memory. On February 25, April WTI is trading 21 cents higher. We have no position to recommend.

Natural gas:

April natural gas lost 39.2 cents on volume of 508,698 contracts. Total open interest increased by 3,485 contracts, which relative to volume is approximately 65% below average. The March contract lost 8945 of open interest. Stand aside.

Euro:

The Match euro lost 9 pips on volume of 124,234 contracts. Total open interest increased by 1,290, which relative to volume is approximately 50% below average. Stand aside.

British pound:

The March British pound gained 19 pips on volume of 87,218 contracts. Total open interest increased by a minor 248 contracts. The pound currently is trading 12 pips higher on the day. Stand aside.

Yen:

The March yen advanced 2 pips on light volume of 90,990 contracts. Total open interest declined by 1,554 contracts, which relative to volume is approximately 30% less than average. We are becoming more friendly to the June Yen and think it is headed higher. The yen remains on a short-term buy signal, but an intermediate term sell signal.

Gold:

April gold gained $14.40 on light volume of 143,254 contracts. Total open interest increased by 3,644 contracts, which relative to volume is average. April gold made a new high for the move yesterday and has taken it out on February 25. Maintain bullish positions recommended in the February 6 report.

Platinum: On February 24, April platinum generated an intermediate term buy signal after generating a short-term buy signal on February 14.

April platinum gained $13.50 on volume of 9,564. Total open interest increased by 462 contracts, which relative to volume is approximately 90% above average meaning that new longs were very aggressive and moved prices sharply higher. We do not have a recommended position.

Silver:

March silver advanced  26.9 cents on heavy volume of 115,883 contracts. Total open interest increased by 2,725 contract, which relative to volume is 10% below average. However, the March contract lost 6,533 of open interest, which makes the total open increase more impressive (bullish). Maintain long straddles or strangles and long call positions recommended in the February 6 report.

S&p 500 E mini:

The March S&P 500 E mini advanced 11.75 points on volume of 1,619,094 contracts. Total open interest declined by 25,243 contracts, which relative to volume is approximately 40% less than average. Yesterday, we recommended to buy out of the money call options on a set back to reduce losses on long put positions.  This set up is only applicable for clients that hold long equity positions.