Andy Waldock of Commodity & Derivative Advisors, shows current trends in Commercial Interest from the CFTC Commitments of Traders (COT) report.

Off the sheet, but on my charts is the Mexican peso. This market fits our criteria for a Commitments of Traders (COT) sell signal, along with a corresponding buy stop at .005261.

Brexit negotiations have once again paralyzed the currency markets. Theresa May’s deadline has been extended to March 29. The pending deadline has caused the total positions of many currency markets to shrink substantially.

Logically, the British pound is leading the shrinkage as its total position has dropped by nearly 70% in the last two weeks. We see the pound as a setup for unexpected strength. It won't take much to push this market around, and we think the odds are that it moves higher.

The total position of the U.S. Dollar Index has declined by nearly as much. In fact, the only total position that gained interest last week was the Canadian dollar as commercials increased their purchases, yet again. The Canadian dollar’s decline is one we’ll be anxiously watching as we feel the market may be nearing a tradable low.

Following up on last week's trades

Currencies: The euro and Swiss franc appear to be decoupling. While both saw nice rallies, the Swiss held onto a more significant portion of its gains. We see many of the currency positions lightening up ahead of the March expiration and Brexit negotiations. The euro and Swiss protective stops should be raised to lock in some gains.

Grains: Last week was a good week in the grains, and we expect it to continue. We suggested long positions in soybeans and soybean meal, as well as the wheat and corn. Commercial purchases were verified in the corn market this past week with news that China bought 300,000 metric tons of corn. This is worth watching because it’s their largest corn purchase in years. We’ll have to see if this is a one-off event or, the beginning of something more consistent as trade negotiations loom on the horizon.

We’ve raised the protective stops in the grain market and included profit objectives for the soybeans and soybean meal. We’re giving the wheat and corn markets a little more room to the upside.

Softs: The orange juice market has risen by nearly 9% since our buy recommendation. This rally has drawn the attention of commercial sellers who've forced momentum back into negative territory. Profits should be locked in at a minimum of Friday's low of 125.50. I’m leaving the orange juice instructions as published in our weekly signals because the rally has been so sharp that it has caused the commercial position to flip completely.

Commercial traders are now short the orange juice market and the market is overbought. This places us in a position to expect a reversal lower.

Cotton has rallied but, not quite as forcefully. Raise the May cotton sell stop to breakeven, at least.

COT Table

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