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The release of the USDA export report is delayed until Monday due to the Christmas Day holiday.

Soybeans:

March soybeans lost 10.50 cents on volume of 117,533 contracts. Total open interest declined by a massive 14,862 contracts, which relative to volume is approximately 420% above average meaning that liquidation was extremely heavy on the decline the January contract accounted for loss of 13,896 of open interest, and the March 2015 through July 2015 contracts lost a total of 1138. In short, there was liquidation across the board in the front month contracts. As this report is being compiled on December 26, March soybeans are trading up 13.50 cents on light holiday volume. March soybeans remain on a short-term buy signal, but an intermediate term sell signal. Stand aside.

Soybean meal:

March soybeans lost $2.60 on volume of 38,810 contracts. Total open interest declined by 619 contracts, which relative to volume is approximately 40% below average. Normally,  when total open interest declines along with price, it would be positive. Although the January contract lost 4,188 of open interest and there were open interest increases in the March 2015 through May 2016 contracts. In short, open interest was increasing in the forward months as prices declined, which reduced total open interest dramatically below average. This is bearish. As this report is being compiled on December 26 March soybean meal is trading 3.30 higher on the day. March soybean meal remains on a short and intermediate term buy signal. Stand aside.

Corn:

March corn lost 6.25 cents on volume of 94,653 contracts. Total open interest declined by 2,175 contracts, which relative to volume is approximately 10% below average. The March contract lost 6,035 of open interest, May 2015-69. As this report is being compiled on December 26, March corn is trading 5.25 cents higher and is trading at the highs of the day, however it is below the December 24 high of 4.15. March corn remains on a short and intermediate term buy signal.

Chicago wheat:

March Chicago wheat lost 24.0 cents on volume of 49,902 contracts. Total open interest declined by a massive 3,937 contracts, which relative to volume is approximately 210% above average. This is the first open interest decline on a price decrease since December 10 when Chicago wheat lost 4.00 cents on volume of 82,854 contracts and total open interest declined by 3,112 contracts. The total open interest decline in Wednesday’s trading is the first indication that recent longs have begun to liquidate as prices moved lower. As this report is being compiled on December 26, March Chicago wheat is trading 0.75 cents lower on the day. March Chicago wheat remains on a short and intermediate term buy signal.

Live cattle:

February live cattle lost 2.5 points on volume of 23,443 contracts. Total open interest declined by a hefty 1,288 contracts, which relative to volume is approximately 120% above average. The the December contract accounted for loss of 990 of open interest, February 2015-1,378, June 2015 -203. As this report is being compiled On December 26, February live cattle is trading unchanged on the day and has made a daily high of 1.61350, which is below the high of 1.61425.made on December 22.

In the December 19 report, we recommended the initiation of bearish positions and to use the penetration of the December 22 high as an exit point for these positions. We think there is a good chance the bull move in live cattle is not over. However, the market will likely continue lower before a turnaround is in sight.The reason for this is managed money is massively long and undoubtedly many in this category are sitting on losing positions.As a result, they will use rallies to trim their positions, which will keep a lid on advances. Once this is out of the way, prices may have a significant rebound.

WTI crude oil:

February WTI crude oil lost $1.28 on volume of 297,972 contracts. Total open interest increased by 1,345 contracts, which relative to volume is approximately 75% below average.The February contract lost 1,239 of open interest. As this report is being compiled on December 26, February WTI is trading 55 cents lower and has made a daily low of 55.22, which is above Wednesday’s low of 55.07. We expect new contract lows shortly. Stand aside.

Natural gas:

February natural gas lost 13.2 cents on volume of 209,142 contracts. Total open interest declined by 970 contracts, which relative to volume is approximately 70% below average. The January contract lost 3,749 of open interest. On December 24, February natural gas made a new contract low of 3.043 and this has been taken out with another contract low of 3.007. Natural gas is trading at levels last seen in 2012. The low occurred during the week of December 31, 2012 when natural gas on the continuation chart made a low of 3.050.On December 1, natural gas generated a short and intermediate term sell signal. Stand aside.

The Energy Information Administration announced that working gas in storage was 3,246 Bcf as of Friday, December 19, 2014, according to EIA estimates. This represents a net decline of 49 Bcf from the previous week. Stocks were 150 Bcf higher than last year at this time and 169 Bcf below the 5-year average of 3,415 Bcf. In the East Region, stocks were 111 Bcf below the 5-year average following net withdrawals of 36 Bcf. Stocks in the Producing Region were 52 Bcf below the 5-year average of 1,148 Bcf after a net withdrawal of 3 Bcf. Stocks in the West Region were 6 Bcf below the 5-year average after a net drawdown of 10 Bcf. At 3,246 Bcf, total working gas is within the 5-year historical range.

Gold:

February gold lost $4.50 on light volume of 49,028 contracts. Total open interest declined by a massive 2,914 contracts, which relative to volume is approximately 140% above average meaning that liquidation was extremely heavy on the modest decline. As this report is being compiled on December 26, February gold is trading $21.40 higher and has made a daily high of 1199.10, which is the highest print since 1203.60 made on December 22.We are surprised by the action on December 26 and thought gold would soon be generating a short-term sell signal, which would reverse the December 11 short-term buy signal. Even silver, which has been very weak of late is rallying sharply, up 40.5 cents or 2.58%. Stand aside.

Cocoa:

March cocoa lost $2.00 on light pre-holiday volume of 5,627 contracts. Total open interest increased by a massive 561 contracts, which relative to volume is approximately 300% above average meaning a battle ensued between buyers and sellers and sellers had the edge. Making the total open interest increase more impressive (potentially bearish) was the May 2015 and September 2015 contracts, which lost a total of 122 of open interest.From December 19 through December 24, total open interest has increased by 4,529 contracts, but during this time, March cocoa declined $1.00.We consider this to be bearish open interest action relative to the price decline. As this report is being compiled on December 26, March cocoa has closed at 2941, down $23.00. As we stated in the December 23 report, clients should have protective sell stops in place, or mental stops to exit the market.

From the December 23 report:

We are becoming increasingly concerned about the massive build in open interest and that prices are not moving significantly higher. For example, from December 19 through December 23, March cocoa has advanced $1.00, but total open interest has increased by 3,968 contracts. This adds credence to our theory that there is a significant amount of trade selling at the high-end of the recent trading range and this likely spells trouble for cocoa going forward. Make sure protective sell stops are in place, whether actual or mental and be prepared to liquidate if prices turn lower, which now appears increasingly likely.

Coffee:

March coffee lost 85 ticks on volume of 6071 contracts. Total open interest increased by a massive 765 contracts, which relative to volume is approximately 420% above average meaning that aggressive new short sellers were entering the market in significant numbers and driving prices fractionally lower. For the past 3 days beginning on December 22, total open interest has increased each day on price declines. From December 22 through December 24, total open interest has increased by 2,174 contracts while March coffee has lost 4.55 cents. This is bearish open interest action relative to the price decline. March coffee remains on a short and intermediate term sell signal. Stand aside.