ao link

Markets Extra

Linked In

Are open interest data signalling a grain market decline?


Returning to the theme of how to gauge whether grains markets have set a top, this week has provided some negativity in signals.


Revisiting the advice from RJ O’Brien to “watch for penetration of key benchmark moving averages”, wheat futures for May have surrendered their 50-day moving average, and look like ending below it on a weekly chart.


For corn, the May contract has this week closed below its 40-day line for the first time in seven months - although has managed to rebound off its 40-daly line, some 9 cents below at $5.32 a bushel.


Past the peak


Open interest is another factor which may be ringing an alert too.


“Watch for evidence that open interest is topping out or eroding, which would indicate an outbound money flow,” RJ O’Brien said.


In fact, open interest, ie the number of live contracts, set 2021 peaks some time ago for Chicago corn, soybeans and wheat.


In wheat, the open interest in futures as of the last session, at 417,879 contract, was down 35,032 lots from the high, with the soybean figure 92,201 lots below its peak and corn’s open interest 187,789 contracts from the top set on February 18.


Wheat outflow


At least, from a bull’s perspective, the outward flow is showing signs of stabilising, and even reversing in the case of wheat.


Not that this has helped wheat futures, which for May shed 1.3% for the week to last night - compared with a 0.2% gain in soybeans, which achieved a 0.2% gain in prices.


The rule appears to be holding better for Kansas City hard red winter wheat futures - which have seen a notable cut in open interest, and prices of which fell by 2.7% during the week.



Crop Open interest March 11
Week-on-week change
Change from 2021 top

Date of 2021 top

Corn 1,790,287 -990 -187,789 February 18
Kansas City wheat 214,903 -4,470 -18,896 February 19
Soybeans 857,327 -1,438 -92,201 January 15
Chicago wheat 417,879 +963 -35,032 January 29
Data in contracts. Futues only




Related Stories

LIVE FORECASTS - First estimate for wheat planted area in Argentina 2021-22

First estimate for wheat planted area in Argentina in the 2021-22 season

Canada ag officials heighten warning over Prairies dryness

"Spring rains need to be significantly higher than normal," AAFC saiys, as it underlines expectations of tight domestic canola supplies

Carr's Group shares rise, as it reveals 'positive' trading, profits rise

The engineering-to-farm retail group sees tailwinds from a strategic review and reviving feed margins. But what about USDA forecasts for UK wheat in 2021-22?

Canadian wheat 2019-20

Estimates for Canadian wheat output in 2019-20
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2021 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069