Soybeans – Open Interest has made a record high at (753669 contracts held). Previous record was 02-15-2011. In the last 5 weeks OI has gone up 40%. Fund Longs made a new record at (275924 contracts held). Previous record was made in 02-08-2011. Commercial Shorts have made a new record at (498507 contracts held). Previous record was made in 01-18-2011. Commercial Volume has made a new record at (797859 contracts held). Previous record was made in 01-18-2011. As strong as this commodity has been it was only a matter of time until records were broken. Let’s look at just the OI for this week’s comments. Back in 2008, a previous record, OI began making records 21 weeks before, off-and-on, until 02-19-2008 at (616048 contracts). The bull price highs came 5 months after, on declining OI. In the bull of 2011, OI starting taking out the 2008 records 19 weeks before the finial record & was hit on 02-15-2011 (698766 contracts). Highs occur in Mid-August 6-months after. This week OI took out the 2011 record levels, assuming 20 weeks, that would put us in again in Mid-August. When looking at things in 3-D using Volume as the depth of the chart, last week was new highs in Soybeans. What’s more important, a simple chart high or how much gain or loss from every tick up or down. The chart to the right shows the Contract Value (OI x Futures Price) and the importance of understanding market depth. Many traders are confused about the strength of the Nov contract, but if the OI highs are made in May, six months after would be November. This bull market is dynamic with multiple swings that developed over the years. The record OI low was made on 05-08-2001 at (132766 contracts held). That is a 467% increase to the record high this week and approaching 11 years next month. One can only assume that finial bull top will not go out quietly with a saucer top, but with a climatic capitulation spike. Its cousin, Minneapolis Wheat, can attest to that possibility.
