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Soybeans: On December 3, January soybeans generated a short-term sell signal, and remains on an intermediate term sell signal.

January soybeans advanced 2.50 cents on volume of 193,892 contracts. Total open interest increased by 7,038 contracts, which relative to volume is approximately 45% above average meaning a battle ensued between longs and shorts and longs were able the move the market fractionally higher. The January contract accounted for loss of 2,629 of open interest.

Yesterday, January soybeans made a new low for the move at 9.83 3/4, which is the lowest print since 9.73 1/4 made on October 27. Typically, after the generation of a sell signal, the market has a tendency to rally from 1-3 days and this is the opportune time to initiate bearish positions. As this report is being compiled on December 4, January soybeans are trading 6.50 cents higher and have made a high of 10.16 1/2, which is the highest print since 10.22 made on December 2. The high on December 1 was 10.22 1/2. The market looks weak and we think it is highly likely that this may be the extent of the counter trend rally. OIA recommends the initiation of bearish positions.

The USDA reported sales of 1179.74 thousand metric tons of soybeans bringing total commitments to date of 1.4569 billion bushels versus USDA projections for the entire season of 1.720 billion bushels. At this juncture, 85% of the crop has been committed, and it is a certainty that the USDA will raise export projections.

Soybean meal:

January soybean meal lost $4.10 on volume of 72,723 contracts. Total open interest declined by 1,431 contracts, which relative to volume is approximately 20% below average. The December contract lost 1,484 of open interest, January 2015 -2898. As this report is being compiled on December 4, January soybean meal is trading $2.90 higher after making a high of 361.90 is now trading at 356.70. January soybean meal will generate a short-term sell signal if the high of the day is below OIA’s key pivot point for December 4 of 353.80. We view a short-term sell signal as inevitable.

The USDA reported sales of 226.83 thousand metric tons bringing total commitments to date of 6761.73  thousand metric tons versus USDA projections for the season of 12,800 thousand metric tons.

Corn:

March corn advanced 0.75 cents on volume of 141,865 contracts. Total open interest increased by 5,421 contracts, which relative to volume is approximately 50% above average meaning a battle ensued between longs and shorts and longs were able to move the market fractionally higher. The December contract accounted for loss of 2,828 of open interest. Yesterday, March corn made a low of 3.77 1/4, which is the lowest print since 3.75 1/4 made on November 20.

As this report is being compiled on December 4, March corn is trading 5.50 higher and has made a daily high of 3.90 1/2, which is the highest print since 3.91 made on December 2. In order for March corn resume its uptrend, the low the day must be above OIA’s key pivot point for December 4 of 3.87. Although this week’s sales as reported by the USDA were strong and above expectations, the reality is the corn crop is going to be huge, and exports must continue to be robust if corn prices are to stabilize.We think the likelihood of a short-term sell signal is strong, and clients should position themselves on the bearish side of the market, especially since corn is entering a period of seasonal weakness.

The USDA reported sales of 1170.7 thousand metric tons bringing total commitments to date of 895.6  million bushels versus USDA projections for the entire season of 1.750  billion bushels.

Chicago wheat:

March Chicago wheat lost 13.75 cents on volume of 87,960 contracts. Total open interest declined by 1,911 contracts, which relative to volume is approximately 15% below average. The December contract lost 411 of open interest, March 2015 -3781. As this report is being compiled on December 4, March Chicago wheat is trading 1.50 lower and has made a low of 5.77 1/2, which is the lowest print since 5.70 1/4 made on December 1. We continue to be unimpressed with wheat despite the sharp move higher during the past couple of days. The strength in wheat is all about Russia, which means the market can move higher despite having bearish global fundamentals. March Chicago wheat remains on a short and intermediate term buy signal. Stand aside.

USDA reported another disappointing weekly sale of 319.2 thousand metric tons bringing total commitments to date of 622.2 million bushels versus USDA projections for the entire season, which ends on May 31 of 925 million bushels.

Live cattle: On December 3, February live cattle generated a short-term sell signal, but remains on an intermediate term buy signal.

February live cattle lost 1.925 cents on volume of 63,400 contracts. Total open interest declined by a massive 10,350 contracts, which relative to volume is approximately a huge 440% above average meaning that liquidation was off the charts heavy the December contract lost 5,633 of open interest, February 2015 -3,981, April 2015 -1,230. In short there was liquidation across the board.Usually, after the generation of a sell signal, the market has a tendency for a counter trend rally lasting 1-3 days and this is the opportunity to initiate bearish positions.As this report is being compiled on December 4, February live cattle is trading 17.5 points higher and has made a daily low of 1.66575, which is above yesterday’s low of 1.66100.Wait for a counter trend rally before initiating bearish positions.

WTI crude oil:

January WTI crude oil advanced 50 cents on volume of 525,290 contracts. Total open interest increased by 9,897 contracts, which relative to volume is approximately 25% below average. The January contract accounted for loss of 9,946 of open interest, which normally would be positive for crude oil prices. However, as this report is being compiled on December 4, January crude oil is trading 61 cents lower and has made a daily low of 66.09, which is the lowest print since 63.72, the contract low, made on December 1. The market is extremely weak, and it’s inability to rally for more than a day or two confirms the internal weakness of crude oil. Stand aside.

Natural gas:

January natural gas lost 6.9 cents on volume of 280,823 contracts. Total open interest increased by 5,236 contracts, which relative to volume is approximately 25% below average. The January contract gained 23 of open interest. As this report is being compiled after the release of the EIA report, January natural gas is trading 15.3 cents lower and has made a daily low of 3.638, which is the lowest print since the November 2014 contract made a low of 3.541 during the week of October 27. The January contract has taken out the October 27 low of 3.707 and is trading at new contract lows. On December 1, OIA announced that January natural gas had generated a short and intermediate term sell signal.

The Energy Information Administration announced that working gas in storage was 3,410 Bcf as of Friday, November 28, 2014, according to EIA estimates. This represents a net decline of 22 Bcf from the previous week. Stocks were 227 Bcf less than last year at this time and 372 Bcf below the 5-year average of 3,782 Bcf. In the East Region, stocks were 183 Bcf below the 5-year average following net withdrawals of 34 Bcf. Stocks in the Producing Region were 145 Bcf below the 5-year average of 1,247 Bcf after a net injection of 11 Bcf. Stocks in the West Region were 44 Bcf below the 5-year average after a net addition of 1 Bcf. At 3,410 Bcf, total working gas is below the 5-year historical range.

Gold:

February gold advanced $9.30 on volume of 152,731 contracts. Total open interest increased by 2791 contracts, which relative to volume is approximately 25% below average. Yesterday, February gold made a high of 1215.00, which took out the previous days high of 1212.60, but was below the December 1 high of 1221.00.As this report is being compiled on December 4, February gold is trading $1.00 lower and has made a daily high of 1213.50 and a low of 1201.10, which is below OIA’s key pivot point for December 4 of 1203.10. In order for February gold to generate a short-term buy signal, the low of the day must be above the pivot point. Surprisingly, gold has not been able to muster much strength even though the dollar index has been trading sharply lower for most of the day. Stand aside.

Platinum:

January platinum advanced $10.00 on volume of 9185 contracts. Total open interest declined by 8 contracts. As this report is being compiled on December 4, January platinum has closed at 1245.90, up $18.40 and takes out the previous high close of 1241.60 made on December 1 when January platinum advanced $30.30 on volume of 22,222 contracts and total open interest increased by just 3 contracts. Additionally, it is the highest close since 1245.90 made on October 30. In order for January platinum to generate a short-term buy signal, the low the day must be above OIA’s key pivot point for December 4 of $1238.00.

Silver:

March silver lost 4.4 cents on volume of 42,966 contracts. Total open interest declined by 917 contracts, which relative to volume is approximately 15% below average. As this report is being compiled on December 4, March silver has closed at 16.575, up 16.3 cents. This is the highest close since 16.692 made on December 1. In order for March silver to generate a short-term buy signal, the low the day must be above OIA’s key pivot point for December 4 of $16.607.

Coffee:

March coffee advanced 25 ticks on light volume Of 14,369 contracts. Total open interest declined by a massive 1,252 contracts, which relative to volume is approximately 250% above average meaning that liquidation was extremely heavy on the minor advance. It appears that longs are getting tired of waiting for coffee to resume its uptrend and are liquidating rather than holding onto positions. This is a market that is testing the patience of speculators before it moves higher. As this report is being compiled on December 4, March coffee has closed at 1.8245, down 1.20 cents. March coffee remains on a short and intermediate term sell signal.