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Corn:

December corn advanced 0.25 cents on surprisingly heavy volume of 521,302 contracts. Volume exceeded that of November 17 when the December contract gained 2.00 cents on volume of 404,545 contracts and total open interest declined by 15,312. Additionally, volume was the strongest since November 12 when the December contract lost 0.25  cents on volume of 549,368 contracts and total open interest increased by 6,950.

On November 18, total open interest declined by 9,177 contracts, which relative to volume is approximately 25% below average. Accounting for the loss of total open interest was the December contract which shed 28,753 of open interest. As this report is being compiled on November 19, the December contract is trading unchanged on the day. We have no recommendation.

Soybeans:

January soybeans lost 6.25 cents on heavy volume of 232,203 contracts. Volume was the strongest since November 10 when the January contract lost 10.75 cents on volume of 256,930 contracts and total open interest increased by 10,715. On November 18, total open interest increased by 10,201 contracts, which relative to volume is approximately 70% above average meaning aggressive new short-sellers were entering the market in large numbers and driving prices lower (8.52 1/2), , which is above the contract low of 8.50 made on November 10.

Open interest increases were across-the-board and the August 2016 and January 2017 contracts lost a total of 13 of open interest. As this report is being compiled on November 19, the January contract is trading 2.00 cents above yesterday’s close. Soybeans, soybean meal and soybean oil remain on short and intermediate term sell signals. We have no recommendation.

Sugar:

March sugar lost 31 points on volume of 117,342 contracts. Total open interest increased by 1,478, which relative to volume is approximately 45% below average. As this report is being compiled on November 19, the March contract has reversed course and is trading sharply higher, up 51 points, or +3.46%. Although March sugar remains on short and intermediate term by signals, we have no strong feeling about the market and though sugar fundamentals have improved, with the deflationary environment impacting all commodities, we question how much more upside the sugar market has. In any event, do not short the market

Cocoa:

March cocoa lost $25.00 on volume of 24,258 contracts. Total open interest increased massively again for the third day in a row, this time by 2,281 contracts, which relative to volume is approximately 275% above average, meaning aggressive new short-sellers were entering the market and driving prices lower ($3,335).

During the past three days beginning on November 16, total open interest has increased 7,674 contracts while the March contract has declined by $17.00. We do not like this market action and recommend a stand aside posture. As this report is being compiled on November 19, the March contract is trading $10.00 above yesterday’s close and has made a daily high of 3,388, which is $1.00 above yesterday’s print. Do not short cocoa.

WTI crude oil:

December WTI crude oil advanced 24 cents on substantial volume of 880,062 contracts. Total open interest increased by 1,126 contracts, which is minuscule and substantially below average. The December contract lost 28,436 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in December and increase total open interest fractionally.

As this report is being compiled on November 19, the January contract is trading 33 cents lower and has made a daily low of 41.25, which is only slightly above the low for the move of 41.21 made on November 16. Although we may not see a rapid price decline in oil, we do expect to see prices grinding lower and making new contract lows along the way.

Dollar index:

The December dollar index advanced 4.5 points on volume of 34,406 contracts. Total open interest increased by 703, which relative to volume is approximately 20% below average. As this report is being compiled on November 19, the dollar index is trading sharply lower losing 74 points, or -0.74%. The major currencies that comprise the dollar index: euro, yen, British pound, Swiss franc and Canadian dollar are all rallying sharply. We see this as a temporary setback, and expect the dollar index to resume its climb next week. The December dollar index remains on short and intermediate term buy signals.

S&P 500 E-mini: It appears likely that the December S&P 500 E-mini will generate a short-term buy signal on November 19 (see below).

The S&P 500 E-mini advanced strongly by 30.75 points on surprisingly light volume of 1,549,352 contracts. To put yesterday’s volume in perspective consider that volume for the four prior days (November 12-November 17)  averaged 1,822,209. This speaks poorly about general market participation in yesterday’s advance.

On November 18, total open interest increased by 20,565 contracts, which relative to volume is approximately 45% below average. In summary, volume was below the prior four days average volume and total open interest increased substantially below average.

On November 16, the December contract gained 29.50 points on volume of 1,716,362 contracts and total open interest declined by 14,809. Setting aside the decline in open interest on November 16, volume traded on November 16 was 167,010 contracts above November 18.

In other words, participation declined  on November 18 as prices moved to their highest levels since November 11. Although it appears that a short-term buy signal will be generated on November 19, we think the market will struggle to move much beyond the high for the move of 2110.25 made on November 3

For the December contract to generate a short-term buy signal on November 19, the low of the day must be above OIA’s key pivot point for November 19 of 2069.20. At this juncture, we recommend liquidating the short call position recommended two days ago and moving to the sidelines for now.