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Corn:

December corn advanced 3.75 cents on volume of 218,702 contracts. Total open interest increased by 5,881 contracts, which relative to volume is average. The December contract lost 228 of open interest and July 2016 -712. Although it was positive that open interest increased in yesterday’s trading, the fact remains corn is trading in a very weak fashion, and it appears inevitable that a short-term sell signal will be generated.

As this report is being compiled on October 14, the December contract is trading 3.75 cents lower and has made a daily high of 3.86 3/4, which is above yesterday’s print of 3.84 3/4, and a low of 3.79 1/2, which is slightly above yesterday’s print of 3.79. The December contract will generate a short-term sell signal if the daily high is below OIA’s key pivot point for October 14 of 3.79 3/4. The rally will resume if the daily low is above OIA’s pivot point for October 14 at 3.87 1/4. We have no recommendation.

Soybeans: November and January soybeans will generate short-term buy signals on October 14, but remain on an intermediate term sell signals.

November soybeans advanced by a strong 26.50 cents on very heavy volume of 431,836 contracts. Volume exceeded that of October 9, the day of the USDA report when the November contract advanced 4.50 cents on volume of 390,675 contracts and total open interest increased by 15,454. On October 13, total open interest increased by a very strong 17,277 contracts, which relative to volume is approximately 55% above average. The November contract lost 6,529 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in November and increase total open interest substantially.

As this report is being compiled on October 14, the November contract is trading unchanged on the day and has made a new high for the move of  9.19 3/4, which takes out yesterday’s print of 9.15. The next area of resistance for the November contract will be OIA’s key pivot point of 9.23 for October 14, and a daily low above this pivot point would generate an intermediate term buy signal.

We think the market will struggle to do this, but keep in mind that according to the most recent COT report, managed money remains short soybeans. For the past three days beginning on October 9, November soybeans have advanced each day along with open interest. This means that there are large numbers of speculative shorts in soybeans who are receiving margin calls. This group of traders will continue to support the market until they’re blown out. We have no recommendation.

Soybean meal: December and January soybean meal will generate short-term buy signals on October 14, but remain on intermediate term sell signals.

December soybean meal advanced $8.20 on heavy volume of 172,867 contracts. Total open interest increased by 14,179 contracts, which relative to volume is approximately 230% above average meaning huge numbers of new buyers were entering the market and driving prices to a new high for the move (318.30). The October contract lost 200 of open interest.

As this report is being compiled on October 14, the December contract is trading nearly unchanged on the day, and has made a daily high of 318.60, which takes out yesterday’s print of 318.30. Unlike soybeans, managed money has remained net long soybean meal and therefore the upward pressure may not be as intense because soybean meal needs more fresh buying from new longs to send it higher due to relatively small numbers of short-sellers. The December contract should encounter resistance at OIA’s key pivot point for October 14 of $320.70, and a daily low above the pivot point would generate an intermediate term buy signal. We have no recommendation.

Soybean oil:

December soybean oil advanced 61 points on volume of 145,568 contracts. Total open interest increased by 7,252 contracts, which relative to volume is approximately 100% above average meaning aggressive new buyers were entering the market in large numbers and driving prices higher (28.96), which takes out the October 12 high of 28.89. As this report is being compiled on October 14, the December contract has made a new high for the move of 29.20, which takes out the previous high for the move of 29.06 made on October 6. On October 5, OIA announced that December soybean oil generated a short-term buy signal, but remains on an intermediate term sell signal. We have no recommendation.

Chicago wheat:

December Chicago wheat advanced 12.25 cents on volume of 97,590 contracts. Total open interest increased by 1,429, which relative to volume is approximately 40% below average. The December contract lost 941 of open interest, May 2016 -194. As this report is being compiled on October 14, December Chicago wheat has reversed course and is trading 10.25 cents lower and has made a daily low of 5.0 7 1/2. On October 1, December Chicago wheat generated a short-term buy signal, but has been unable to generate an intermediate term buy signal. We have no recommendation.

Sugar:

March sugar lost 41 points on volume of 131,596 contracts. Total open interest declined by 8,438 contracts, which relative to volume is approximately 155% above average meaning liquidation was extremely heavy on the decline. This is positive open interest action relative to yesterday’s loss. As this report is being compiled on October 14, the March contract is trading 23 points higher after making a daily low of 13.69, which is the lowest print since 13.70 made on October 8. On September 28, March sugar generated a short-term buy signal and an intermediate term buy signal on October 1. We have no recommendation.

Coffee:

December coffee lost 15 ticks on volume of 32,162 contracts. Total open interest declined by a massive 3,496 contracts, which relative to volume is approximately 300% above average meaning liquidation was off the charts heavy. For the past four days beginning on October 8, coffee has advanced for 3 days and declined yesterday for a cumulative increase of 8.30 cents while total open interest has declined each day for cumulative total of 8,273 contracts.

This is very negative open interest action relative to the price advance and this has been typical coffee action since it generated a short-term buy signal on October 5 and an intermediate term buy signal on October 9. As this report is being compiled on October 14, the December contract is trading 1.85 cents higher and has made a daily high of 1.3750, which is below the high for the move of 1.3760 made on October 12. We have no recommendation.

Cotton: December cotton will generate a short-term buy signal on October 14, but remains on an intermediate term sell signal.

December cotton advanced 2.17 on volume of 45,988 contracts. Total open interest declined by 950 contracts, which relative to volume is approximately 20% below average, but an open interest decline on yesterday’s strong advance is negative. When looking at this number is important to keep in mind that managed money is net long cotton and yet short sellers covering were powering the market higher, not new buying. As this report is being compiled on October 14, the December contract is trading 10 points higher on the day and has made a daily high of 64.08, which is below yesterday’s print of 64.16. We have no recommendation.

WTI crude oil:

December WTI crude oil lost 46 cents on heavy volume of 1,048,608 contracts. Interestingly, volume increased substantially from October 12 when WTI lost $2.53 on volume of 846,991 contracts and total open interest declined by 18,507. On October 13, total open interest increased by 7,314 contracts, which is minuscule and dramatically below average. However, the November contract lost 41,121 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in November and increase total open interest. The action on October 13 was definitively bearish.

As this report is being compiled on October 14, the December contract is trading 15 cents lower and has made a daily low of 46.47. For the December contract to generate a short-term sell signal, which would reverse the September 3 short-term buy signal, the high of the day must be below OIA’s key pivot point for October 14 of $45.88. The rally will resume if the December contract makes a daily low above OIA’s pivot point for October 14 of 47.85. We have no recommendation.

Euro:

The December euro advanced 7 pips on light volume of 161,812 contracts. Total open interest increased by a sizable 4,357 contracts, which relative to volume is average. However, this continues the pattern of positive open interest action relative to price advances and declines that we have seen for the past couple of weeks. On October 12, OIA announced the December euro generated a short-term buy signal, which reversed the September 22 short-term sell signal.

Despite occasional bouts of weakness, the euro never generated an intermediate term sell signal. As this report is being compiled on October 14, the December euro has made a new high for the move of 1.1464, which is the highest print since 1.1476 made on September 18. The impetus for the move on October 14 was likely the terrible retail sales figures released by the government and the December dollar index is trading sharply lower as a result. This appears to confirm that any interest rate increase is off the table for 2015.

Swiss franc: The December Swiss franc will generate an intermediate term buy signal on October 14 after generating a short-term buy signal on October 12.

British pound:

The December British pound lost 1.07 cents on volume of 103,199 contracts. Total open interest increased by 4,777 contracts, which relative to volume is approximately 75% above average meaning that new aggressive short-sellers were entering the market and driving prices lower (1.5194). However, it is a different story on October 14: the December pound is trading 2.06 cents higher after the release of the United Kingdom employment report which showed robust job creation. It appears likely that a short-term buy signal may be generated in tomorrow’s trading. We have no recommendation.

Canadian dollar:

The December Canadian dollar lost 23 pips on volume of 63,688 contracts. Total open interest declined again, this time by 1,257 contracts, which relative to volume is approximately 20% below average, but yesterday’s decline continues the pattern of open interest declines seen since October 1.

For the past nine days beginning on October 1, the December Canadian dollar has rallied by a total 1.91 cents and total open interest has declined each day except for October 7 (+530) bringing the cumulative total open interest decline for the nine day period to 19,751 contracts. We have no recommendation.