Soybeans:

May soybeans advanced 12.25 cents on volume of 295,238 contracts. Total open interest increased by 3,109, which relative to volume is approximately 50% below average. The March contract lost 16,499 of open interest, which makes the total open increase more impressive (bullish). As this report is being compiled on February 26, May beans are trading 3.25 cents higher and have made a new high for the move at 13.97 3/4 The market continues to advance based upon weather concerns, logistical problems in Brazil and tight ending stocks along with robust exports. We do not have a recommended position in beans.

From the February 23 Weekend Wrap:

Soybeans present an interesting dilemma. Old crop stocks are tight, and sales have been brisk up to this point, but there is a risk of major cancellations by the Chinese once the Brazilian crop begins to move out to the marketplace. Last year, cancellations did not begin until April, and there appears to be a window between now and the planting intentions report on March 31 for soybeans to grind slowly higher. Additionally, the very dry conditions in Brazil should give soybeans an added lift.

Soybean meal:

May soybean meal gained $5.00 on volume of 120,422 contracts. Volume was the highest since February 13 when 130,691 were traded and soybean meal advanced $9.30 while total open interest increased by 6,188. On February 25, total open interest declined by 6,432, which relative to volume is approximately 100% above average meaning that liquidation was heavy. The March contract accounted for a loss of 11,291 of open interest. As this report is being compiled on February 26, May meal is trading $2.50 lower.We do not have a recommended position in meal.

Soybean oil:

May soybean oil lost 18 points on volume of 108,622 contracts. Total open interest declined by a massive 11,367, which relative to volume is approximately 320% above average meaning that liquidation was off the charts heavy. The March contract lost 9,674 of open interest. As this report is being compiled on February 26, May bean oil is trading 65 points higher and has made a new high for the move at 41.64, which takes out the previous high of 41.42 made on February 24. Additionally, this is the highest print since December 6 when May reached 41.75. Maintain bullish positions recommended in the February 10 report. May soybean oil will likely generate an intermediate term buy signal on February 26.

Corn:

May corn gained 3.50 cents on volume of 320,961 contracts. Volume declined from the 381,947 contracts traded on February 24 when May corn declined by 1.25 cents and total open interest declined by 11,721 contracts. On February 25, total open interest declined by a massive 18,130, which relative to volume is approximately 120% above average meaning that liquidation was heavy on the advance. The March contract lost 33,946 of open interest. As this report is being compiled on February 26, May corn is trading 0.50 higher and has made a new for the move at $4.65. Corn remains on a short and intermediate term buy signal. We do not have a recommended position.

Chicago wheat:

May Chicago wheat gained 1.00 cent on heavy volume of 152,457. Volume was the highest since February 20 when 172,587 contracts were traded and May wheat was unchanged while open interest declined by 3,596 contracts. On February 25, total open interest declined by a massive 13,840 contracts, which relative to volume is 250% above average meaning liquidation was off the charts heavy. The March contract lost 10,771 of open interest. As this report is being compiled on February 26, May Chicago wheat is trading 6.25 cents lower. 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 7.00 cents on heavy volume of 40,223 contracts. Volume was the heaviest since February 11 when 44,154 contracts were traded and KC wheat gained 2.75 cents while total open interest declined 875 contracts. On February 26, total open interest declined by 3,452 contracts, which relative to volume is approximately 225% above average. The March contract lost 6,859 of open interest. As this report is being compiled on February 26, May KC wheat is trading 4.00 cents lower. Like Chicago wheat, on February 20, we recommend that clients take partial profits in their KC positions and move up sell stops on remaining positions.

Sugar #11:

May sugar closed unchanged on heavy volume of 266,641 contracts.Volume declined from the 368,236 contracts traded on February 24 when May sugar gained 61 points and total open interest declined by 6,033 contracts. On February 26, total open interest declined by a massive 18,935 contracts, which relative to volume is approximately 185% above average meaning that liquidation was very heavy on the advance to a new high for the move at 18.08. This is the highest print since November 6 (18.10). The March contract lost 18,935 and May -3,803 of open interest. We think more liquidation is ahead based upon May open interest of 394,958. March is about to go off the board with a mere 20,460 contracts outstanding. As this report is being compiled, May sugar is trading unchanged after making a daily low of 17.03. We do not have a position to recommend.

Live cattle:

April live cattle gained 1.175 cents on volume of 47,507 contracts. Total open interest declined by 208 contracts. The February contract lost 1,400 of open interest. As this report is being compiled on February 26, April cattle is trading 1.825 cents higher and has made a new contract high at 1,45300. We recommend that the short call position be liquidated immediately.  Cattle is breaking out and is ready to move higher from here. Maintain bullish positions recommended  in late December.

WTI crude oil:

April WTI crude oil declined 99 cents on light volume of 388,665 contracts. Total open interest increased by only 1,252 contracts. The April contract lost 3,821 of open interest. February 25 is the third day in a row that volume has been below 400,000 contracts. As this report is being compiled on February 26, April WTI is trading 90 cents higher. WTI looks tired at current prices and dismal volume reinforces this. We do not have a recommendation in WTI.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.1 million barrels from the previous week. At 362.4 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories decreased by 2.8 million barrels last week, but are in the upper half of the average range. Finished gasoline inventories decreased while blending components inventories remained unchanged last week. Distillate fuel inventories increased by 0.3 million barrels last week but are well below the lower limit of the average range for this time of year. Propane/propylene inventories remained unchanged last week and are below the lower limit of the average range. Total commercial petroleum inventories decreased by 0.5 million barrels last week.

Natural gas:

April natural gas gained 7.1 cents on volume of 469,561 contracts. Total open interest declined by a hefty 17,206, which relative to volume is approximately 40% above average. The March contract lost 18,529 of open interest. Stand aside.

Euro:

The March euro gained 7 pips on volume of 169,423 contracts. Total open interest increased by 3,704 contracts, which relative to volume is approximately 15% below average. As this report is being compiled, the March euro is trading 69 pips lower. We do not have a position to recommend.

British pound:

The March pound gained 13 pips on volume of 127,925 contracts. Total open interest declined by 1,827, which relative to volume is approximately 40% below average. On February 26, the March pound is trading 26 pips lower. The pound remains on a short and intermediate term buy signal. We have no recommended position.

Yen:

The March yen gained 32 pips on volume of 106,082 contracts.Total open interest declined by 1,225 contracts, which relative to volume is approximately 45% less than average. We continue to be impressed by the support in yen and as this report is being compiled the March contract is trading 27 pips lower. We have no recommendation.

Gold:

April gold gained $4.70 on volume of 132,787 contracts.Total open interest declined by 1,970 contracts, which relative to volume is approximately is 40% below average. April gold made a new high for the move at $1343.80, and on February 26 has taken out yesterday’s high with a print of 1345.60. Maintain bullish positions recommended in the February 6 report. 

Silver:

March silver declined 8.8 cents on huge volume of 121,208 contracts. Volume was the highest since February 18 when 123,185 contracts were traded and March silver gained 47.7 cents while total open interest declined by 2,333 contracts. On February 25, total open interest declined by 4,351 contracts, which relative to volume is approximately 40% above average meaning that liquidation was substantial. Maintain long straddles or strangles or long call options per the February 6 report.

S&P 500 Emini:

The March S&P 500 Emini advanced 0.25 point on volume of 1,574,444 contracts. Total open interest declined by 22,348 contracts. We have advised buying out of the money calls to mitigate further losses in long puts. This strategy is only for clients who hold long equity positions.