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* Oats (CBOT)- Currently $226* The price of Oats has dropped precipitously over the past 6 trading sessions. Peak to trough it has dropped $58.75 on massive trading volume. To find a day with higher trading volume, you will have to look back to June 16, 2009. The only red flag I can find which pointed to this decline, occurred between November 23/09 and December 4/09. During this period we witnessed open interest decline by 2846 contracts (14,230,000 bushels).
* Open interest declines when long positions are sold out or when short positions are bought back. Amazingly, the November and December trades didn’t have as large of impact as its OI changes would warrant on prices. At the time it would be difficult to determine that the floor was being taken out of the market. However, OI changes in Oats Futures positions indicated that institutions were quietly and discreetly exiting their positions during the end of November 09.
* Long term prospects for Oats remains mixed with bullish potential if prices remain above $188.25 and bearish potential is prices remain below $281. This hundred dollar price range will serve as a great price region for sellers and buyers to establish short term positions.
* Current support targets include $221-$225 with the possibility of traveling as low as $217 before prices rebound.
* If $217 is broken, then next downside target is $203.5
* The first minimum upside target is $251.5
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