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Corn: December corn will generate a short-term sell signal on October 15 if the high of the day is below OIA’s key pivot point for October 15 of 3.79 5/8. This reverses the short-term buy signal of September 14. December corn remains on an intermediate term sell signal.

December corn lost 5.50 cents on volume of 222,424 contracts. Volume increased slightly from October 13 when the December contract gained 3.75 cents on volume of 218,702 and total open interest increased by 5,881. On October 14, total open interest increased by 3,121 contracts, which relative to volume is approximately 40% below average, but yesterday’s total open interest increase on lower prices, especially as the December contract made a new low for the move of 3.78 1/2 is definitively bearish.

The December contract lost 3,537 of open interest, March 2016 -594, which means there were sufficient open interest increases in the forward months to offset the declines in the two delivery months and increase total open interest. Yesterday’s action indicates that lower prices are in store and as this report is being compiled on October 15, the December contract has made another new low of 3.76. We have no recommendation.

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

November soybeans lost 3.50 cents on volume of 308,267 contracts. Total open interest increased by 5,975 contracts, which relative to volume is approximately 20% below average. The November contract lost 5,143 of open interest. As this report is being compiled on October 15, the November contract is trading 2.75 cents higher and has made a daily low of 9.07, which is below yesterday’s print of 9.09 and the high of 9.13 1/2, which is below yesterday’s print of 9.19 3/4. For the November contract to continue its advance, it must make a daily low above OIA’s key pivot point of 9.23 for October 15, which would generate an intermediate term buy signal. We have no recommendation.

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

December soybean meal lost $1.90 on volume of 76,247 contracts. Total open interest increased by 2,986, which relative to volume is approximately 50% above average meaning a battle ensued between buyers and sellers and sellers were able to edge the market slightly lower. The December contract lost 2,068 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in November and substantially increase total open interest.

As we pointed out in yesterday’s report, managed money is more favorably inclined toward soybean meal than soybeans, and we have no doubt that speculators were on the buy side of yesterday’s action. As this report is being compiled on October 15, the December contract is trading $1.70 higher and has made a daily high of 318.70, which is 10 cents above yesterday’s print. For the December contract to continue its advance, it must generate an intermediate term buy signal, which will occur if the daily low is above OIA’s key pivot point for October 15 of $320.70. We have no recommendation.

Soybean oil:

December soybean oil gained 4 points on volume of 87,994 contracts. Total open interest declined by 2,451 contracts, which relative to volume is average. As this report is being compiled on October 15, the December contract is trading 24 points lower and has made a daily low of 28.31, which is the lowest print since 28.12 made on October 13.

Our concern about soybean oil is that it has been unable to generate an intermediate term sell signal, despite being on a short-term buy signal since October 5. If soybean oil had sufficient internal strength, it would have gotten close to an intermediate buy signal during the past three sessions, especially on October 13 when soybeans rallied 26.50. For the December contract to generate an intermediate term buy signal, the low of the day must be above OIA’s key pivot point for October 15 of 29.79. We have no recommendation.

Sugar: We are suspending coverage on sugar until we announce a signal change, see a trading opportunity or spot unusual activity. March sugar remains on short and intermediate term buy signals.

Coffee:

December coffee gained 30 ticks on volume of 32,950 contracts. Total open interest declined again, this time by 1,399 contracts, which relative to volume is approximately 65% above average meaning liquidation was extremely heavy on the nearly unchanged close.

 For the past five days beginning on October 8, coffee has advanced for 4 days and declined on October 13 for a cumulative increase of 8.60 cents while total open interest has declined each day for cumulative total of 9.672 contracts. The problem with coffee is that we are seeing consistent negative open interest action relative to the price advance and this has been the pattern since coffee generated a short-term buy signal on October 5 and an intermediate term buy signal on October 9. For recommendations on coffee, subscribers of OIA Direct should call.

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

December cotton lost 10 points on volume of 23,214 contracts. Total open interest increased by 1,970 contracts, which relative to volume is approximately 230% above average meaning that a battle ensued between buyers and sellers and sellers were able to edge the market slightly lower.

For the past two days, beginning on October 13, December cotton has advanced 2.07 cents while total open interest has increased by 1,020 contracts. For December cotton to continue its advance it must generate an intermediate term buy signal, and for this to occur the low of the day must be above OIA’s key pivot point for October 15 of 64.04. We have no recommendation.

WTI crude oil:

December WTI crude oil lost 50 cents on volume of 722,416 contracts. Total open interest increased by 4,652 contracts, which relative to volume is approximately 60% below average, however an open interest increase accompanying yesterday’s decline is negative. This follows the action of October 13 when the December contract lost 46 cents on very heavy volume of 1,048,608 contracts and total open interest increased by 7,314.

In summary, new short-sellers have been dominating downside market action for the past two days. The November contract lost 23,912 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.

As this report is being compiled on October 15, the December contract is trading 44 cents lower and making a daily low of 45.79 after the release of the EIA report which showed a massive storage build. Despite the negative price action on October 15, the fact remains 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 15 of $45.88. We have no recommendation.

The Energy Information Administration announced on October 15 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.6 million barrels from the previous week. At 468.6 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 2.6 million barrels last week, but are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 1.5 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories rose 1.8 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 3.3 million barrels last week.

Gold:

December gold advanced $14.40 on heavy volume of 212,199 contracts. Total open interest increased by a massive 15,774 contracts, which relative to volume is approximately 185% above average meaning aggressive new buyers were entering the market in large numbers and driving prices higher (1189.90). This is the best price and open interest action on increased volume that we’ve seen in gold in quite some time.

Additionally, gold is able to maintain a firm undertone and although the market made a low of 1151.30 on October 13, it snapped back smartly and has rallied to make new highs for the move on October 15 of 1191.70. On October 7, OIA announced that December gold generated a short-term buy signal and an intermediate term buy signal on October 8. For subscribers to OIA Direct, please call for recommendations.

Silver:

December silver advanced 21.00 cents on volume of 69,111 contracts. Total open interest increased by a massive 3,944 contracts, which relative to volume is approximately 130% above average meaning aggressive new buyers were entering the market and driving December silver to a new high for the move of 16.195. As this report is being compiled on October 15, the December contract is trading 3.3 cents higher and has made a daily high of 16.195. On September 21, December silver generated a short-term buy signal and an intermediate term buy signal on October 5.For subscribers to OIA Direct, please call for recommendations.

Dollar index:

The December dollar index lost 83.3 points on volume of 36,511 contracts. Total open interest increased by a massive 4,828 contracts, which relative to volume is approximately an astounding 420% above average meaning huge numbers of new short-sellers were entering the market and driving prices to a new low for the move of 93.860. On October 9, OIA announced that the December dollar index generated a short-term sell signal and remains on an intermediate sell signal. We have no recommendation.

Euro:

The December euro advanced 94 pips on volume of 200,785 contracts. Total open interest increased by a massive 9,688 contracts, which relative to volume is approximately 75% above average meaning large numbers of new buyers were entering the market and driving prices to a new high for the move of 1.1500. As this report is being compiled on October 15, the market is pulling back trading 87 pips lower on the day. On October 12, the December euro generated a short-term buy signal and remains on an intermediate term buy signal. We have no recommendation.

British pound: The December British pound will generate a short-term buy signal on October 15, but will remain on an intermediate term sell signal.

Swiss franc: On October 14, the December Swiss franc generated an intermediate term buy signal after generating a short-term buy signal on October 12.

Yen:

The December yen advanced 72 pips on surprisingly light volume of 167,962 contracts. However, total open interest exploded higher by increasing 16,946 contracts, which relative to volume is approximately 300% above average meaning that huge numbers of new buyers were entering the market and driving prices to a new high for the move of .8441.

As this report is being compiled on October 15, the yen is trading 17 pips higher and has made a new high for the move of .8475. Keep in mind that according to the latest COT report, manage money is substantially short the yen. Across-the-board, we are seeing the major currencies rally, and in the process blowing out old short-sellers, but many are holding on. The yen remains on short and intermediate term buy signals. We have no recommendation.

Canadian dollar: 

The December Canadian dollar advanced 43 pips on volume of 50,021 contracts. Total open interest increased by 539 contracts, which relative to volume is approximately 50% below average. For the past ten days beginning on October 1, the December Canadian dollar has rallied by a total 1.48 cents and total open interest has declined each day except for October 7 (+530) and October 14 (+539) bringing the cumulative total open interest decline for the ten day period to 19,212 contracts.

On October 5, the December Canadian dollar generated a short-term buy signal, and for an intermediate term buy signal to be generated, the low of the day must be above OIA’s key pivot point for October 15 of 77.26. Conceivably, an intermediate term buy signal may be generated on October 16. We have no recommendation.