Bloomberg Access:{OIAR<GO>}

Due to technical issues, today’s report will be truncated

Soybeans: On August 29, November soybeans generated a short term sell signal, which reversed the August 17 short term buy signal. November soybeans remain on an intermediate term sell signal.

November soybeans lost 3.00 cents on very light volume of 119,523 contracts. Total open interest declined by a massive 9293 contracts, which relative to volume is approximately 210% above average meaning liquidation was heavy on yesterday’s moderate decline. The September contract accounted for a loss of 8,125 of open interest and there were additional open interest decreases in the forward months.

As this report is being compiled on August 30 the November contract is trading sharply lower, down 16.00 or -1.63% and has made a daily low of 9.47, which is the lowest print since the contract low of 9.43 made on August 2. The COT report released on Friday shows that managed money remains heavily long soybeans by a ratio of 6.48:1, which is up for the previous week of 4.94:1 and the ratio two weeks ago of 6.18:1. The large long position of managed money will exert selling pressure as funds liquidate their underwater long positions. Stand aside.

Corn: On August 29, December corn generated a short term sell signal, which reversed the August 19 short term buy signal. December corn remains on an intermediate term sell signal.

December corn lost 4.25 cents on heavy volume of 423,573 contracts. Volume is the strongest since August 12 when the December contract gained 1.25 on volume of 551,543 contracts and total open interest increased by 5213. On August 29, total open interest declined by 9129 contracts, which relative to volume is approximately 20% below average. The September contract accounted for a loss of 28,643 of open interest. As this report is being compiled on August 30 the December contract is trading 4.75 lower and has made a daily low of 3.15 1/4, which is the lowest print since 3.12, the contract low of made on August 12.

The COT report revealed that managed money added 19,637 to their long positions and also added 13,014 to their short positions. Commercial interests liquidated 10,170 of their long positions and also liquidated 9525 of their short positions. As of the latest report, managed money a short corn by ratio of 1.90:1, down from the previous week of 2.05:1 and the ratio two weeks ago of 1.94:1. Stand aside.

Natural gas:On August 29, December 2016 natural gas generated a short term buy signal and remains on an intermediate term buy signal.

October natural gas lost 1.7 cents on light volume of 267,779 contracts. Total open interest declined by massive 13,706 contracts, which relative to volume is approximately 110% above average meaning liquidation was extremely heavy on the modest decline. The September contract accounted for a loss of 8102 of open interest. As this report is being compiled on August 30 the October contract is trading 6.00 cents lower or –2.07% versus crude oil which is trading -1.04% lower or -49 cents. Our recommendation to initiate bullish positions appears to of been premature and it appears that natural gas does not have the momentum at this juncture to take out decisively the 2.95 point of resistance.

Although we think higher prices are ahead, money management is of prime importance.Do not hesitate to liquidate positions that may not the viable at this juncture. We will be looking for a spot to initiate fresh bullish positions at a more opportune time. We do not think natural gas prices will visit the lows seen a week and a half ago when it was trading in the 2.50 area.  On August 26 October and November natural gas generated short term buy signals and today August 30 is the second day of the pullback, which we usually see after the generation of buy signals. Conceivably the market could continue its correction thru tomorrow.

Gold:

December gold advanced $1.20 on light volume of 147,790 contracts. Total open interest declined by 1328 contracts, which relative to volume is approximately 45% below average. Yesterday, the December contract made a new low for the move of 1317.20 and currently as this report is being compiled on August 30 the December contract is trading $8.60 lower and has not taken out yesterday’s print. On August 25, OIA announced that December gold generated a short term sell signal and currently it remains on an intermediate term buy signal.

The COT report revealed that managed money added 7398 to their long positions and liquidated 3559 of their short positions. Commercial interests liquidated 6226 of their long positions and also liquidated 5648 of their short positions. As of the latest report, managed money is long gold by a stratospheric 9.22:1, up sharply from the previous week of 8.06:1 and the ratio two weeks ago of 7.77:1. The report shows that managed money is a long by the highest ratio in at least five weeks. With prices continuing to decline there is an overhang of longs who will be looking to liquidate as prices move lower. Stand aside.

Dollar index: The September dollar index will not generate a short term buy signal on August 30, because the low of the day is below OIA’s key pivot point for the generation of a buy signal of 95.565.

Yen: On August 29, the September and December Japanese yen generated a short term sell signals, but remain on intermediate term buy signals.