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Soybeans: On December 9, January and March 2015 soybeans generated a short-term buy signal, which reversed the short-term sell signal of December 3. January and March soybeans remain on an intermediate term sell signal.

January soybeans advanced 5.50 cents on volume of 208,535 contracts. Volume shrank from December 8 when January soybeans gained 7.75 cents on volume of 248,354 contracts and total open interest increased by 545 contracts. On December 9, total open interest increased by a hefty 7,642 contracts, which relative to volume is approximately 45% above average meaning that new aggressive longs were entering the market in large numbers and driving prices higher (10.50). The January contract accounted for loss of 8,393 of open interest.

As this report is being compiled after the release of the USDA report, January soybeans are trading 19.75 cents lower after making a daily high of 10.60 1/4. This is the highest print since 10.72 1/2 made on November 13.Usually, after the generation of a short-term buy signal, the market has a tendency to pullback from 1-3 days. Today is the 1st day of the pullback and we will be watching the market closely to see if the new buy signal is reversed.

Soybean meal:

January soybean meal advanced $5.20 on volume of 88,744 contracts. Total open interest declined again, this time by 1,983 contracts, which relative to volume is approximately 10% below average, however this is the 3rd day in a row in which soybean meal prices have advanced and total open interest has declined. From December 5 through December 9, January soybean meal has advanced $17.50 while total open interest has declined by 9,306 contracts.

This is clearly bearish open interest action relative to the price advances of the past 3 days. The liquidation occurred in the December contract, losing 687 of open interest and March 2015 -8,532. As this report is being compiled on December 10, January soybean meal is trading $7.50 lower, or – 2.05% versus soybeans trading – 1.48%. In recent prior reports, we have highlighted the out performance of soybeans versus soybean meal, not only in terms of price, but of open interest. January and March soybean meal remains on a short and intermediate term buy signal.

Corn:

March corn advanced 5.00 cents on light volume of 156,788 contracts. Volume shrank dramatically from December 8 when March corn lost 4.75 cents on volume of 214,992 contracts and total open interest declined by 1,885 contracts. On December 9, total open interest increased by 3,618 contracts, which relative to volume is approximately 10% below average, however this continues the positive open interest action that we have seen for the past several days. As this report is being compiled after the release of the USDA report, March corn is trading 3.75 cents lower on the day. March corn remains on a short and intermediate term buy signal.

Chicago wheat:

March Chicago wheat lost 12.25 cents on volume of 88,712 contracts. Total open interest declined by 535 contracts, which relative to volume is approximately 70% below average. The December contract lost 179 of open interest May 2015-318, July 2015 -1075. As this report is being compiled after the release of the USDA report, March Chicago wheat is trading 8.00 cents lower and has made a daily low of 5.75 1/4, which is the lowest print since 5.70 1/4 made on December 1. March Chicago wheat remains on a short and intermediate term buy signal.

Live cattle:

February live cattle advanced 1.175 cents on volume of 61,544 contracts. Total open interest declined by 3,023 contracts, which relative to volume is approximately 100% above average, meaning that liquidation was extremely heavy on the advance. The December contract lost 1,850 of open interest, February 2015 -1,615, April 2015 -620. In short, there was liquidation across the board as prices advanced. This is bearish open interest action relative to the price advance and confirms the downtrend. According to the most recent COT report, managed money is long live cattle by a ratio of 9.97:1, which means there is plenty of liquidation ahead. As a result, rallies will be tepid as speculators long at higher levels look to liquidate to trim losses. Stand aside.

WTI crude oil:

January WTI crude oil advanced 77 cents on volume of 633,292 contracts. Total open interest increased by 4,279 contracts, which relative to volume is approximately 65% below average. The January contract accounted for loss of 24,667 of open interest.

As this report is being compiled on December 10, January WTI is trading lower again, this time by $2.56 and has made a new contract low of 60.43.This is the lowest price on the monthly continuation chart since July 2009 when the August 2009 contract made a monthly low of 58.32. January gasoline has made a new contract low of 1.6300, which is the lowest print since 1.6010 made by the October 2009 contract during September 2009. Stand aside.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.5 million barrels from the previous week. At 380.8 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 8.2 million barrels last week, and are in the middle of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories increased by 5.6 million barrels last week but are near the lower limit of the average range for this time of year. Propane/propylene inventories fell 0.3 million barrels last week but are well above the upper limit of the average range. Total commercial petroleum inventories increased by 7.4 million barrels last week.

Natural gas:

January natural gas advanced 5.7 cents on volume of 335,428 contracts. Total open interest declined by 9,426 contracts, which relative to volume is average. The January contract accounted for loss of 25,027 of open interest. The open interest decline on yesterday’s advance is clearly bearish, and as this report is being compiled on December 10, January natural gas is trading 6.8 cents higher. On December 1, January natural gas generated a short and intermediate term sell signal. Stand aside.

Gold: On December 10 February gold will generate a short-term buy signal.

February gold advanced $37.10 on healthy volume of 254,496 contracts. Volume was the strongest since December 1 when February gold advanced $42.60 on volume of 370,132 contracts and total open interest declined by 834 contracts. On December 9, total open interest increased by 6,693 contracts, which relative to volume is average. As this report is being compiled on December 10, February gold is trading 2.40 lower and has made a daily high of 1238.90, which is below yesterday’s high of 1239.00.Wait for a pullback before entering bullish positions, and the market should correct for 1-3 days now that it is on a short-term buy signal.

Platinum: On December 10, January platinum will generate a short-term buy signal.

January platinum advanced $17.40 on heavy volume of 20,569 contracts.Total open interest increased by 614 contracts, which relative to volume is approximately 20% above average meaning that new aggressive longs were entering the market and driving prices to a new high for the move (1256.30.This is the highest print for the January contract since $1262.20 made on October 30.

Silver: On December 10, March silver will generate a short-term buy signal.

March silver advanced 85.8 cents on heavy volume of 70,417 contracts. Total open interest increased by 1,658 contracts, which relative to volume is approximately 10% below average, however is the 1st significant increase of open interest on a price advance in quite some time. Yesterday, March silver made a high of $17.230, and has made another new high on December 10 of 17.355.

Cocoa:

March cocoa advanced $49.00 on volume of 22,566 contracts. Total open interest increased by a massive 3,798 contracts, which relative to volume is approximately 460% above average, meaning that new longs were aggressively entering the market in large numbers and driving prices to a new high for the move of 2958. As this report is being compiled on December 10, March cocoa has closed at 2933 and is made a new high for the move at 2960. On December 8, March cocoa generated a short-term buy signal and will generate an intermediate term buy signal if the low the day is above OIA’s key pivot point for December 10 of 3002. Clients should wait for a setback before entering bullish positions.

Coffee:

March coffee advanced 2.40 cents on volume of 16,631 contracts. Total open interest increased by 223 contracts, which relative to volume is approximately 45% below average. However, the March contract lost 91 of open interest, July 2015 -347. As this report is being compiled on December 10, March coffee is closed at 1.7855. March coffee remains on a short and intermediate term sell signal.