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Soybeans:

November soybeans lost 1.50 cents on volume of 148,772 contracts. Total open interest increased by 1,593 contracts, which relative to volume is approximately 50% below average. The September contract lost 2,980 of open interest. The November contract made a new contract low of 10.19 3/4, which is its lowest print since the week of September 13, 2010 (10.18 3/4). As this report is being compiled on August 27, November soybeans are trading 3.50 lower, but have not taken out yesterday’s contract low. Every day that passes with nearly ideal weather is a day when soybean prices decline. This prospect for a large crop is being discounted and there is not any viable support until the low $9.00 level. There has not been a rally of any magnitude lately that would have enabled clients to establish new short positions. If not short from higher levels, stand aside.

Corn:

December corn lost 2.50 cents on volume of 282,091 contracts. Total open interest declined by 12,776 contracts, which relative to volume is approximately 75% above average meaning that liquidation was heavy. The September contract, which enters 1st notice day on August 29 lost 22,812 of open interest. As this report is being compiled On August 27, December corn is trading 2.25 lower, but remains above its contract low of 3.58. Stand aside unless short from higher levels.

Chicago wheat:

December Chicago wheat advanced 2.00 cents on volume of 91,775 contracts. Total open interest declined by 4,514 contracts, which relative to volume is approximately 100% above average meaning liquidation was extremely heavy on the modest advance. The September contract accounted for loss of 6,394 of open interest. As this report is being compiled on August 27, December Chicago wheat is trading 1.25 higher on the day. Stand aside unless short from higher levels.

Live cattle:

October live cattle advanced 10 points on light volume of 40,450 contracts. Total open interest declined by 448 contracts, which relative to volume is approximately 50% below average. The August contract lost 910 of open interest, October -1910. As this report is being compiled on August 27, October live cattle is trading 60 points lower and has made a low of 1.47475, which is the lowest print since 1.47075 made on August 25.The market continues to shed open interest as it rallies, and this is keeping a lid on prices as we forecast weeks ago. We continue to think higher prices are in the offing, but it is going to take some time to work off the speculative selling pressure. October cattle remains on a short and intermediate term sell signal. Stand aside.

WTI crude oil:

October WTI crude oil advanced 51 cents on volume of 350,102 contracts. Volume increased substantially from August 25 when October WTI lost 30 cents on volume of 244,240 contracts and total open interest increased by 5,958 contracts. On August 26, total open interest declined by 3,821 contracts, which relative to volume is approximately 50% below average. The October contract accounted for loss of 7,023 of open interest. As this report is being compiled on August 27, October WTI is trading 32 cents lower and has made a daily high of 94.24, which is slightly below yesterday’s high of 94.35 and the August 25 high of 93.95. On August 22 the high of October WTI was 94.04 and on August 21, 94.45. In short, WTI has been experiencing a series of lower highs since August 21. The lows have been somewhat irregular. With the decline of 2.1 million barrels in the latest EIA report, WTI inventories have declined by 27.8 million barrels during the past 9 weeks. October crude oil made its low for the move at 92.50 on August 21, and it looks inevitable a test of the low is in the offing. Stand aside.

From the August 19 report:

“Last week, inventories increased by 1.4 million barrels, but the report on August 5  was the 6th consecutive week that crude oil inventories had declined for total of 22.6 million barrels over 6 weeks. Subtracting last week’s inventory build of 1.4 million from this week’s decline means that crude inventories have declined 3.1 million barrels for the past 2 EIA reports. When 3.1 million barrels is added to 22.6 million barrels, inventory has declined during the past 8 weeks by 25.7 million barrels.This is the likely explanation for the inversion of WTI’s term structure.”

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.1 million barrels from the previous week. At 360.5 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories decreased by 1.0 million barrels last week, and are in the middle of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 1.3 million barrels last week but are below the lower limit of the average range for this time of year. Propane/propylene inventories rose 1.9 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories increased by 1.4 million barrels last week. 

Natural gas:

October natural gas lost 3.00 cents on volume of 228,365 contracts. Total open interest declined by 6,247 contracts, which relative to volume is average. The September contract accounted for loss of 9,798 of open interest. Yesterday, October natural gas was trading above OIA’s key pivot point, but during the final 10 minutes of trading, the market dipped below it on heavy volume of 10,010 contracts between 1: 20-1:30 p.m. CDT. The market made a spike low of 3.936 on heavy volume on the 10 minute chart, and then closed at 3.949, above the low of the day.October natural gas has been trading in a fairly firm manner, but it must make a daily low above OIA’s key pivot point of 3.947 before a short-term buy signal can be generated.As this report is being compiled on August 27, October natural gas has made a high of 4.032, which is the highest print since August 12 (4.041) and a low of 3.932, which is 1.5 cents below OIA’s pivot point. Additionally, the low on August 27 slightly takes out yesterday’s print of 3.936. Stand aside.

Copper:

December copper lost 2.45 cents on volume of 53,719 contracts. Volume increased from August 25 when December copper advanced 1.40 cents on volume of 32,423 contracts and total open interest increased by 1,416 contracts. On August 26, total open interest increased by 709 contracts, which relative to volume is approximately 45% less than average, but a total open interest increase on a price decline is bearish. Making the total open interest increase even more negative is the fact that the September contract lost 4,088 of open interest, which means that there were sufficient open interest increases in the forward months to offset the decline in the September contract. Clients may note that during the time that copper prices were advancing (with the exception of yesterday) there were insufficient increases of open interest in the back months to offset the decline in the September contract. Another bearish factor in yesterday’s trading was that the contango widened dramatically between September 2014 and December 2014. The September contract lost 3.20 cents while December -2.45. The widening of contango is most definitely bearish for prices going forward.December copper remains on a short-term sell signal, but an intermediate term buy signal.

Gold:

December gold advanced 6.30 on volume of 110,224 contracts. Volume was the highest since August 21 when December gold lost $19.80 on volume of 154,384 contracts and total open interest declined by 1,250 contracts. On August 26, total open interest increased by 1,137 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on August 27, December gold is trading $1.30 lower. December gold remains on a short and intermediate term sell signal. Stand aside.

Silver:

December silver gained 2.8 cents on very heavy volume of 83,116 contracts.Volume was the strongest since June 26 when 106,246 contracts were traded and December silver closed at 21.219. On August 26, total open interest declined by 2080 contracts, which relative to volume is average. December silver remains on a short and intermediate term sell signal. Stand aside.

Euro:

The September euro lost 20 pips on volume of 167,617 contracts. Total open interest declined by 544 contracts, which relative to volume is approximately 85% below average. On August 26, the September euro made a new low for the move at 1.3166, and as this report is being compiled on August 27, the euro is rallying, up 27 pips. The September euro remains on a short and intermediate term sell signal. Stand aside and wait for a further rally before considering bearish positions.

Cotton:

December cotton advanced 74 points on volume of 17,567 contracts. Total open interest increased by a massive 3,024 contracts, which relative to volume is approximately 490% above average meaning that huge numbers of new longs were entering the market and driving prices to a new high for the move at 66.95. This is the highest print since 68.24 made on July 24. As this report is being compiled On August 27, December cotton has made another new high for the move at 67.72.

In order for cotton to continue to move higher, the December contract needs to close above OIA’s  pivot point 66.67 and then make a daily low above the pivot. After this, closes above OIA’s pivot points of 67.67 and 68.44. As long as cotton continues to advance above these pivot points, the uptrend is intact.Clients have had plenty of opportunities to initiate bullish positions, and we recommend using the August 25 low of 65.01 as an exit point. On August 22, December cotton generated a short-term buy signal, but remains on an intermediate term sell signal.

Coffee:

December coffee advanced 9.80 cents on volume of 20,553 contracts. Considering the magnitude of the advance, volume was disappointing. Volume was the highest since August 20 when December coffee made its major low at 1.8285 and closed 2.80 cents higher on volume of 35,144 contracts and total open interest declined by 6,522 contracts. On August 26, total open interest increased by a massive 3,308 contracts, which relative to volume is approximately 420% above average meaning that huge numbers of new longs were entering the market and driving prices to a high for the move of 1.9800, which is the highest print since August 5 (1.9900). As this report is being compiled on August 27, December coffee is trading near unchanged after making a new high for the move at $2.0270, which is the highest print since August 1 (2.1110). Maintain bullish positions.