We at Open Interest Analyst wish our clients health, happiness and prosperity in the coming year.
The COT report has been released and we will post the results to the December 29 Weekend Wrap on January 1.
January soybeans lost 3.25 and March – 5.00 cents on heavier than normal volume of 162,488 contracts. Volume was the highest since December 21 190,687 contracts were traded and January and March soybeans each advanced 12.00 cents while total open interest declined 8,447 contracts. On December 30, total open interest declined by 11,420 contracts, which relative to volume is approximately 185% above average meaning that liquidation was extremely heavy on the modest decline. The January contract accounted for loss of 16,203 of open interest as it approaches 1st notice day. In the December 22 Weekend Wrap, we warned about the potential bearish situation developing in soybeans, and printed an extract of that in the December 29 report. As as we said in yesterday’s report, if March soybeans closed below $13.02 1/4, March soybeans would likely generate a short-term sell signal. As this report is being compiled on December 31, March soybeans are trading 14.00 cents lower and have made a new low for the move at 12.89 1/4. For those of you who took our advice and shorted out of the money calls per the December 22 recommendation, continue to hold these positions. We will be looking for new opportunities to establish further bearish positions. Based upon the latest COT report, managed money is loaded up on the long side (long by a ratio of 10.29:1, which is a new high) and will provide fuel for the continued downside move. It is ok to become a more aggressive bear at this juncture. If long liquidate immediately.