Soybeans:

May soybeans lost 7.00 cents on very heavy volume of 427,926 contracts. Volume was the highest in over one year. On February 27, total open interest declined by 14,723 contracts, which relative to volume is approximately 40% above average meaning that liquidation was substantial on the decline. The March contract lost 17,126 of open interest. May soybeans made a high of 14.45 1/2, which was its highest print since September 9 when the high on the continuation chart was $14.48 3/4. The market made its high in a 15 minute period between 6:30 AM and 6:45 a.m CST. For the rest of the session, which encompasses about 2 hours and 45 minutes, the market traded sideways and then began to fall out of bed during the last hour. Soybeans did not get close to testing the high made earlier in the session. When we look at the parabolic move combined with the spike high on heavy volume, OIA thinks we have a tradable top in soybeans. With the key reversal day yesterday, we are confident that rallies will be met by nervous longs looking to exit the market, which will cap any substantial rally. Although we have not advocated bullish positions, if clients are long soybeans, we strongly advise them to take partial profits and tighten stops. Also, consider writing out of the money calls in soybeans. Soybeans remain on a short and intermediate term buy signal.

Soybean meal:

May soybean meal lost $2.10 on heavy volume of 133,509 contracts. Volume took out the previous high volume of 130,961 contracts made on February 13 when May soybean meal closed at $452.80. On February 27, total open interest increased by 2,671 contracts, which relative to volume is approximately 20% below average, but this is a fairly substantial open interest increase on a price decline after making a new high for the move at $472.90, which is the highest print since September 12 (480.90). Like soybeans, we are leery of any major advance from here, and strongly suggest for holders of bullish meal positions to take partial profits and consider writing out of the money calls. Tighten stops on any remaining positions. Soybean meal remains on a short and intermediate term buy signal.

Soybean oil:

May soybean oil lost 31 points on volume of 131,874 contracts. Volume was below that of February 26 when May soybean oil advanced 61 points on volume of 132,971 contracts and total open interest increased by 2,575 contracts. On February 27, total open interest declined by 447 contracts, which is approximately 85% below average. The March contract lost 6,849 of open interest. As this report is being compiled on February 28, May soybean oil is trading 52 points higher but has not taken out yesterday’s high of 41.96. Like soybeans and soybean meal, we advise taking partial profits, tighten up sell stops on remaining positions and consider writing out of the money calls. Soybean oil remains on a short and intermediate term buy signal.

Corn:

May corn lost 6.50 cents on heavy volume of 443,411 contracts. Volume was the highest since February 20 when 455,739 contracts were traded and May corn advanced 2.00 cents while total open interest increased by 6,562 contracts. On February 27, total open interest declined by a massive 53,358 contracts, which relative to volume is approximately 400% above average meaning that liquidation was off the charts heavy. As this report is being compiled on February 28, May corn is trading 7.75 cents higher, but has not taken out the high of 4.65 made on February 26. We have no recommendation for corn. Corn remains on a short and intermediate term buy signal.

Chicago wheat:

May Chicago wheat lost 6.25 cents on volume of 126,318 contracts. Total open interest declined by 4,102 contracts, which relative to volume is approximately 25% above average. The March contract lost 6,412 of open interest. Wheat has been the worse performer of the grain complex, and we are becoming increasingly doubtful that it has the wherewithal to move considerably higher from here. For the May contract to continue its advance, the low for the day must be above $6.09. As this report is being compiled on February 28, May wheat is trading 11.75 cents higher and has made a high of 6.02, which is considerably below the high of 6.20 1/2 made on February 19. On February 20, we advised clients to take partial profits in Chicago wheat and tighten stops on remaining positions. Chicago wheat remains on a short-term buy signal, but an intermediate term sell signal. 

Kansas City wheat:

May Kansas City wheat lost 14.50 on volume of 37,532 contracts. Total open interest declined by 1,804 contracts, which relative to volume is approximately 75% above average meaning that liquidation was heavy on the decline. The March contract lost 4,217 of open interest. Like Chicago wheat, we have advised clients to take partial profits in the February 20 report and tighten up sell stops on remaining positions. As this report is being compiled on February 28, May KC wheat is trading 9.50 higher, but is below 6.93 1/2, the high made on February 19. Kansas City wheat remains on a short and intermediate term buy signal.

Sugar #11: This will be our last report in sugar until we see a trading opportunity.

May sugar advanced 40 points on volume of 195,464 contracts. Total open interest declined by only 123 contracts. The March contract lost 8,643 of open interest and the May 2014 through October 2015 contracts all gained open interest. As this report is being compiled on February 28, May sugar is trading 7 points lower. Sugar remains on a short and intermediate term buy signal.

Live cattle:

April live cattle lost 7.5 points on heavy volume of 80,045 contracts. Volume declined from the 95,500 contracts traded on February 26 when April cattle advanced 2.125 cents and open interest increased by 2,317 contracts. On February 27, total open interest declined by a substantial 4,046 contracts, which relative to volume is approximately 100% above average. The February contract lost 1,047 of open interest. In yesterday’s trading, April cattle made a new contract high of 1.45975, and as this report is being compiled on February 28, April cattle is trading 90 points higher, but has not taken out yesterday’s high. April hogs are trading limit up on the 28th. In the report of February 25, we recommended that short call positions be liquidated and that clients should continue to hold bullish positions initiated in late December.

WTI crude oil:

April WTI crude oil lost 19 cents on volume of 433,976 contracts. Total open interest increased by 12,096 contracts, which relative to volume is average. The April contract lost 4,413 of open interest. As this report is being compiled on February 28, April WTI is trading 35 cents higher on the day. The market continues to trade weakly and it appears that WTI may be in a topping process. We want to continue watching the market before we recommend shorting out of the money calls. WTI crude remains on a short and intermediate term buy signal.

Natural gas:

April natural gas lost 3 cents on light volume of 292,000 550 contracts. Total open interest increased by 3,551 contracts, which relative to volume is approximately 45% less than average. The March contract lost 874 of open interest. As this report is being compiled on February 28, April natural gas is trading 12.9 cents higher on the day. We have no recommendation for natural gas. Natural gas remains on a short and intermediate term buy signal.

Euro:

The March euro advanced 28 pips on volume of 199,242 contracts. Total open interest declined by 1,026 contracts, which relative to volume is approximately 75% below average. As this report is being compiled on February 28, the March euro is trading 96 pips higher and has made a new high for the move at 1.3825. The euro remains on a short and intermediate term buy signal. We have no recommendation for the euro.

British pound:

The March British pound advanced 22 pips on volume of 86,015 contracts. Total open interest increased by 3,661 contracts, which relative to volume is approximately 55% above average. As this report is being compiled on February 28, the March pound is trading 57 pips higher and has made a daily high of 1.6767, which takes out the previous high of 1.6747 made on February 14. The March pound remains on a short and intermediate term buy signal and we have no recommendation at this time.

Yen:

The March yen advanced 38 pips on volume of 162,904 contracts. Volume on February 27 took out the previous high of 161,221 contracts made on February 20 when the March yen lost 2 pips and total open interest increased by 4,995 contracts. On February 27, total open interest declined by 474 contracts, which is minuscule and dramatically below average. As this report is being compiled on February 28, the March yen is trading 1 pip higher and has made a new high for the move at .9848, which takes out the previous high of .9847 made on February 14. The US equity market is trading at new all time highs and yet the yen continues to hold up well. We have no recommendation for the yen at this time. The March yen remains on a short-term buy signal, but in intermediate term sell signal.

Gold:

April gold advanced $3.80 on volume of 141,472 contracts. Total open interest increased by 2,270 contracts, which relative to volume is approximately 35% less than average. Gold has had a spectacular run since the beginning of the year, and despite the advance, has corrected very little. For example, the 20 day moving average is 1297.60, and April gold has not gotten close to it. level. Actually, a correction would be healthy, but as we have said before, gold may not accommodate those sitting on the sidelines waiting to get long. Maintain bullish positions recommended in February 6 report.

Platinum:

April platinum advanced $24.30 on heavy volume of 21,679 contracts. Volume was the highest since December 27 when 24,311 contracts were traded and April platinum closed at $1376.00. On February 27, total open interest increased by 970 contracts, which relative to volume is approximately 75% above average, meaning that new longs were very aggressive about entering positions and driving prices up to a new high for the move (1455.50). Platinum remains on a short and intermediate term buy signal. We have no recommendations at this time.

Silver:

May silver advanced 6.3 cents on total volume of 72,206 contracts. Total open interest increased by 832 contracts, which relative to volume is approximately 50% less than average. The March contract lost 6,639 of open interest, which makes the total open interest increased more impressive (bullish). As this report is being compiled on February 28, May silver is trading 10.1 cents lower on the day. Maintain long straddle and strangle positions and long call positions recommended in February 6 report.

S&P 500 E mini:

The March S&P 500 E mini gained 12.00 points on volume of 1,632,061 contracts. Total open interest increased by 18,747 contracts, which relative to volume is approximately 45% less than average. As this report is being compiled on February 28, the March E mini is trading 8.75 points higher and has made a new all-time high of 1866.50. In the February 21 report, we recommended buying out of the money calls to offset any losses in long put positions. We made this recommendation based upon our belief the market is headed higher. However, we also think for those who hold long equity positions that they should have put protection. When the market finally does correct, it could be much deeper than anyone anticipates.