Soybeans:

May soybeans gained 3.25 on light volume of 114,106 contracts. Total open interest declined by 5,353 contracts, which relative to volume is approximately 75% above average meaning that liquidation was heavy on the advance. The May contract lost 6,702 of open interest. As this report is being compiled on March 18, May soybeans are trading 25.75 higher and have made a daily high of 14.19 1/2, which is the highest print since 14.28 3/4 made on March 11. We are currently experiencing a rally in all grains on March 18, and our concern is that the May soybean meal contract is above the daily low pivot point of $443.60 and is showing uncharacteristic strength compared to other members of the complex. We have previously recommended a short call position, and we are questioning the validity of this now that soybean meal is showing renewed strength. Conceivably, soybeans may be in the process of testing 14.60, the high made on March 7. At this juncture, we suggest waiting until the end of the session before deciding whether or not to liquidate the short call position. If the position shows a loss, liquidate.

Soybean meal:

May soybean meal advanced $2.60 on light volume of 48,968 contracts. Total open interest increased by a hefty 2,000 contracts, which relative to volume is approximately 55% above average. The May contract gained 1,306 of open interest. As this report is being compiled on March 18, May soybean meal is trading $7.90 higher and has made a high of 456.90, which is the highest print since $456.80 made on March 10. Conceivably, soybean meal may attempt to test the February 27 high of 471.50. As indicated in the soybean report, the low for the day in soybean meal is above our key pivot point of 443.60, which means soybean meal is headed higher. We recommend liquidating the short call in soybean meal.

Soybean oil: This will be our last report on soybean oil until we see a trading opportunity.

May soybean oil lost 40 points on light volume of 59,022 contracts. Total open interest increased by 2,068 contracts, which relative to volume is approximately 40% above average meaning that new short sellers were entering the market aggressively and driving prices to new lows for the move (41.82). The the May contract gained 565 of open interest.  If clients followed OIA’s recommendations, the soybean oil trade was closed out with a healthy profit. We recommend a stand aside posture at this juncture.

Corn:

May corn lost 7.00 cents on light volume of 146,041 contracts. Total open interest increased by 5,130 contracts, which relative to volume is approximately 40% above average. The May contract lost 2,579 of open interest. As as this report is being compiled on March 18, May corn is trading 5.75 higher, but has not taken out yesterday’s high of 4.87 1/2. For the past 3 days beginning on March 13, the highs have been lower and the lows have been lower in the May contract. Corn is significantly underperforming both Chicago and Kansas City wheat, and we will provide performance stats for all the grains from March 7 through March 17 in the paragraph that follows the grain reports. We see no reason to be involved in corn and recommend a stand aside posture. May corn remains on a short and intermediate term buy signal.

Chicago wheat:

May Chicago wheat lost 12.75 cents on volume of 76,249 contracts. Total open interest increased by 1,154 contracts, which relative to volume is approximately 40% below average. The May contract lost 1,161 of open interest. We want to restate that price and open interest action has been acting in a bearish congruent manner ever since March 12. This means that open interest increases when prices decline and when prices advance, open interest declines. Despite this, wheat continues to climb higher and as this report is being compiled, May wheat is trading 15.50 cents higher and has made a high for the day of 6.93 1/2,, but has not taken out yesterday’s high of 6.94 1/4. As mentioned in yesterday’s report, use the March 14 low of 6.69 3/4 as an exit point for bullish positions. Although Ukraine is fulfilling contracts that have already been entered into, offerings of wheat from the black sea region have slowed to a crawl. Undoubtedly, buyers will seek wheat from other origins and US will be the beneficiary.

Kansas City wheat:

May Kansas City wheat lost 8.00 cents on light volume of 15,158 contracts. Total open interest increased by 324 contracts, which relative to volume is approximately 20% less than average. The May contract lost 293 of open interest, July -104. As this report is being compiled on March 18, May KC wheat has made another new high for the move at $7.64, which is the highest print since 7.63 made on October 25, 2013. As mentioned in yesterday’s report, exit bullish positions in May KC wheat at $7.32, the low of March 14.

From March 7 through March 17, Chicago wheat is the leader with a gain of 3.13%, May KC wheat +3.08%, May corn -2.04%, May soybean meal -2.45%, May soybeans -4.53%, May soybean oil -5.48%.

Live cattle:

April live cattle lost 22.5 points on light volume of 37,679 contracts. Total open interest increased by 789 contracts, which relative to volume is approximately 20% below average. The April contract lost 2,987 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled on March 18, April cattle is trading 70 points higher and has made a daily high of 1.45825, which has not taken out yesterdays high of 1.45925. Cattle is headed higher, and clients should maintain bullish positions recommended in late December. However, sell stop protection should be moved up to protect profits.

WTI crude oil:

April WTI crude oil lost 81 cents on volume of 551,511 contracts. Volume was slightly higher than the 530,524 contracts traded on March 14 when April crude advanced 69 cents and total open interest declined by 5,348 contracts. On March 17, total open interest declined by a massive 25,271 contracts, which relative to volume is approximately 75% above average meaning that liquidation was extremely heavy on the decline. The April contract lost 43,145 of open interest. This is the first sign of significant liquidation since WTI topped out at $105.22 on March 3. On March 12, WTI generated a short-term sell signal, but remains on an intermediate term buy signal. As this report is being compiled on March 18, May WTI crude is trading $1.43 higher on light volume. Maintain the out of the money short call position and clients should be positioning themselves for the initiation of new bearish positions on a further rally. May WTI should not advance much above $100.02.

Brent crude oil: On March 17, May Brent crude oil generated a short and intermediate term sell signal.

Gasoline: On March 17, May gasoline generated a short-term sell signal, but remains on an intermediate term buy signal.

Natural gas:

April natural gas advanced 11.1 cents on volume of 227,265 contracts. Volume increased from the 162,409 contracts traded on March 14 when April natural gas advanced 4.2 cents and total open interest declined by 5,871 contracts. On March 17, total open interest increased by only 1,267 contracts, which relative to volume is approximately 75% below average. The April contract lost 12,320 of open interest. For the past 2 trading sessions, April natural gas has advanced 15.3 cents, but open interest has declined by 4,604 contracts, which is bearish open interest action relative to the price advance. On March 12, natural gas generated a short-term sell signal, but remains on an intermediate term sell signal.

At this juncture, though we think natural gas prices will drift lower, possibly to the $4.16-4.28 range, our bearishness is tempered by the massive depletion of natural gas supplies. The pipeline needs to be refilled during the next couple of months , before we enter the summer months, which could see a further reduction in inventory. We the think supply-demand of natural gas has fundamentally changed, which has favored supply for the past several years and now favors demand. As this report is being compiled on March 18, April natural gas is trading 8.5 cents lower at 4.453, which is right at the 50 day moving average of 4.449.We recommend a stand aside posture.

Euro:

The June euro advanced 16 pips on volume of 145,128 contracts. Total open interest declined by 690 contracts, which relative to volume is approximately 75% below average. As this report is being compiled on March 18, the June euro is trading 5 pips higher. The euro remains on a short and intermediate term buy signal. We have no recommendation.

Yen:

The June yen lost 44 pips on light volume of 108,711 contracts. Total open interest declined by 1,794 contracts, which relative to volume is approximately 35% below average. As this report is being compiled on March 18, the June yen is trading 29 pips higher. The yen remains on a short and intermediate term sell signal.

Gold:

April gold lost $6.10 on volume of 167,955 contracts. Total open interest increased by 625 contracts, which relative to volume is approximately 85% below average. As this report is being compiled on March 18, April gold is trading $11.20 lower on the day on light volume. Maintain bullish positions recommended in the February 6 report.

Silver:

May silver lost 13.8 cents on very light volume of 35,246 contracts. Total open interest increased by a massive 2,948 contracts, which relative to volume is approximately 235% above average meaning that new short sellers were entering the market and driving prices lower. As this report is being compiled on March 18, May silver is trading 30.4 cents lower on the day. Ever since silver topped out on February 24 ($22.215) through March 17, May silver is lost 4.05% while April platinum has gained 1.89% and April gold +2.35%.

Due to the significant underperformance of silver during the past 2 weeks, we are advise clients to take profits on bullish positions, and if these show losses take the loss now.  If May silver makes a daily low above $21.172, we would feel comfortable recommending bullish positions in silver once more.

S&P 500 E mini:

The S&P 500 E mini advanced 17.75 points on heavy volume of 2,652,562 contracts. Total open interest increased by 114,025 contracts. The huge increase of open interest is due to the expiration of the March contract and switching into the June E mini. As this report is being compiled on March 18, the June E mini is trading 15.75 points higher, and has made a daily high at 1867.00, which is the highest print since 1867.75 made on March 13 . The all-time high was made on March 7 at 1880.50. Continue to hold long out of the money calls coupled with long puts for those clients who hold long equity positions.