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As we notified readers yesterday, today’s report will be truncated due to major electrical work being done on our building, which requires that electricity for the facility be shutdown.

Corn:

December corn advanced 3.75 cents on volume of 287,625 contracts. Volume exceeded that of October 19 when the December contract lost 3.75 cents on volume of 186,962 contracts and total open interest increased by massive 10,750 contracts. Additionally, volume was the strongest since October 9 when the December contract lost 8.50 cents on volume of 397,649 contracts and total open interest declined by 15,770.

On October 20, total open interest increased by 5,375 contracts, which relative to volume is approximately 25% below average, and the December contract lost 185 of open interest. On October 15, December corn generated a short-term sell signal, and the market is experiencing its typical counter trend rally, which has carried over into trading on October 21. The December contract has advanced 2.00 cents and has made a daily high of 3.79 3/4, which matches yesterday’s print. For the December contract to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for October 21 of 3.86. We have no recommendation.

Soybeans:

November soybeans advanced 5.00 cents on volume of 288,519 contracts. Total open interest increased by 1,697 contracts, which relative to volume is approximately 70% below average, but the open interest action in soybeans has been positive for the past couple of days. It declines when prices decline and advances on price gains. The November contract lost 11,199 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.

While open interest action in soybeans has been positive, it has been negative for soybean meal and soybean oil. For example, total open interest increased in soybean meal by 3,469 contracts on October 20 while the December contract lost $1.30 and total open interest declined in soybean oil in yesterday’s trading despite the rally of 52 points. In summary, the underpinnings for the products from a price and open interest stand point do not support substantially higher soybean prices.

As this report is being compiled on October 21, the November contract is trading 6.50 cents higher and has made a high of 9.05 3/4, which is below the October 19 print of 9.06 1/2. November and January soybeans remain on short term buy signals, but intermediate term sell signals. We have no recommendation at this juncture.

Live cattle:

December live cattle advanced 1.525 cents on volume of 55,105 contracts. Volume declined from October 19 when the December contract gained 2.225 cents on volume of 61,015 contracts and total open interest declined by 3,425. On October 20, total open interest declined again, this time by 2,981 contracts, which relative to volume is approximately 110% above average meaning liquidation was substantial on yesterday’s strong price advance.

Aside from the strong advance on October 16 when the December contract gained 2.875 on volume of 53,513 contracts and total open interest increased by 1,156, the market has been powered higher by short-sellers covering positions, not new buying. The market is vulnerable to a sharp pull back and as a result, we continue to recommend a stand aside posture until the market has corrected its excesses. We are looking for a decline lasting approximately two days. On October 19, December live cattle generated a short-term buy signal, but remains on an intermediate term sell signal.

Coffee: On October 21, December coffee will generate an intermediate term sell signal, but remains on a short-term buy signal.

December coffee advanced 85 points on volume of 23,684 contracts. Total open interest increased by 1,816 contracts, which relative to volume is approximately 210% above average meaning a battle ensued between buyers and sellers and buyers were able to edge the market slightly higher. As this report is being compiled on October 21, the December contract is trading sharply lower, down 3.50, or -2.81%. For December coffee to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for October 21 of 1.2360. We expect this to occur this week.

WTI crude oil: December WTI crude oil will generate a short-term sell signal on October 21 provided the high of the day remains below OIA’s key pivot point for October 21 of $46.12.

December WTI crude oil advanced 1 cent on volume of 683,026 contracts. Total open interest declined by 7,647 contracts, which relative to volume is approximately 45% below average. The November contract accounted for loss of 24,630 contracts. As this report is being compiled on October 21, the December contract is trading 96 cents lower, or -2.05% and has made a new low for the move of 44.86.

We have been cautioning clients about WTI and its inability to make a daily low above the pivot point and that product prices were weak. In addition the Brent crude oil contract has been trading negatively along with open interest. We have no recommendation.

Brent crude oil: December Brent crude oil will generate a short-term sell signal on October 21 provided the high of the day remains below OIA’s key pivot point for October 21 of $49.01.

December Brent crude oil advanced 9 cents on volume of 626,709 contracts. Total open interest increased by an astounding 37,636 contracts, which relative to volume is approximately 140% above average, which is a huge number. The December contract gained 6,735 of open interest. As this report is being compiled on October 21, the December contract is trading 75 lower, or -1.52%. We have no recommendation.

The Energy Information Administration announced on October 21 that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.0 million barrels from the previous week. At 476.6 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 1.5 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 2.6 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories fell 0.6 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 1.5 million barrels last week.