For Bloomberg access:{OIAR<GO>}

Due to the Veterans Day holiday, the USDA will release its export sales report tomorrow. Additionally, the EIA reports for crude oil and natural gas will be released tomorrow as well.

Soybeans: 

January soybeans lost 16.25 cents on volume of 316,644 contracts. Volume was the strongest since October 30 when January soybeans lost 19.25 cents on volume of 346,523 contracts and total open interest declined by 23,497 contracts. On November 12, total open interest declined by 4,622 contracts, which relative to volume is approximately 40% below average. The November contract lost 2,374 of open interest, January 2015 – 4,930.

Yesterday, January soybeans made a high at 10.86 1/4, which was slightly above OIA’s key pivot point of 10.85. In order for January soybeans to continue its advance, it must make a daily low above OIA’s pivot point of 10.85.As this report is being compiled on November 13, January soybeans are trading 5.50 cents higher and have made a daily high of 10.72 1/2. However the low the day has been 10.44 3/4, which is below OIA’s key pivot point of 10.46 1/8 and this means January soybeans will not generate an intermediate term buy signal on November 13. January soybeans remain on a short-term buy signal. We have no recommendation.

Soybean meal:

December soybean meal lost $5.60 on heavy volume of 184,629 contracts. Total open interest declined by 5,931 contracts, which relative to volume is approximately 30% above average, meaning that liquidation was heavier than normal. The December contract accounted for loss of 8,956 of open interest. Yesterday, December soybean meal made a new contract high of 417.60, and as this report is being compiled on November 13, has made a daily high of 407.70. December soybean meal remains on a short and intermediate term buy signal. We have no recommendation.

Corn:

December corn advanced 4.00 cents on extremely heavy volume of 663,212 contracts.Total open interest declined by 16,527 contracts, which relative to volume is average. The December contract accounted for loss of 48,534 of open interest. Yesterday, December corn made a new high for the move at 3.85, and as this report is being compiled on November 13, has made another new high at 3.89 on heavy volume. On October 9, December corn generated a short-term buy signal and on October 30 generated an intermediate term buy signal. We have no recommendation.

Chicago wheat:

December Chicago wheat advanced 17.50 cents on huge volume of 290,899 contracts.Volume traded on November 12 was the highest of 2014. On November 12, total open interest declined by 4,954 contracts, which relative to volume is approximately 25% less than average. However, the December contract lost 22,543 of open interest and there were sufficient open interest increases in the forward months to bring the total number significantly below average.

As this report is being compiled on November 13, December Chicago wheat is trading 10.25 cents higher and has made a new high for the move at 5.58 1/4, which is the highest print since 5.66 made on September 2. Despite the impressive performance of Chicago wheat, the market has been unable to generate an intermediate term buy signal and this will occur once the contract has made a daily low above OIA’s key pivot point for November 13 of 5.42 5/8.It should be noted, that managed money is short Chicago wheat by ratio of 1.37:1 according to the most recent COT report. On October 17, December Chicago wheat generated a short-term buy signal. The fundamentals for wheat remain negative, however the rally is going to take out a good portion of speculative shorts. We have no recommendation.

WTI crude oil:

December WTI crude oil lost 76 cents on heavy volume of 718,190 contracts. Volume was the strongest since November 5 when 840,911 contracts were traded and December WTI advanced $1.49 while total open interest increased by 8,095 contracts. On November 12, total open interest increased by 9,410 contracts, which relative to volume is approximately 45% less than average. The December contract accounted for loss of 18,818 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on November 13, December WTI is crashing to new lows (74.96), which is the lowest print since October 2011 (74.95). December WTI remains on a short and intermediate term sell signal. Stand aside.

Natural gas:

December natural gas lost 6.2 cents on volume of 348,072 contracts. Volume was the lightest since since October 30 when December natural gas advanced 3.9 cents on volume of 195,546 contracts and total open interest increased by 4,263 contracts. On November 12, total open interest declined by just 742 contracts, which is minuscule and dramatically below average. During the two recent days that natural gas prices declined (November 10 and 12), total open interest declined only 1,815 contracts while prices have declined 21.9 cents.

In other words, as we have said in prior reports, longs are not liquidating despite the massive build in open interest during the past several days. For example on November 6 total open interest increased by 30,084 contracts when December natural gas advanced 21 cents. On November 5, total open interest increased by 8,763 contracts when December natural gas advanced 6.5 cents. In short, there are large numbers of speculative longs that have not liquidated and will be forced to do so as prices continue to move lower. As this report is being compiled on November 13, December natural gas is trading 17.1 cents lower and is making new lows as we write this report.

From the November 11 report:

“In the November 10 report, we mentioned that the minor decline of open interest was a potential danger sign because it showed that longs were not liquidating as prices moved lower. We remain concerned about this, especially since December natural gas is trading 4.2 cents lower on the day and the daily high has been 4.227, which is considerably below yesterday’s high of 4.311.”

Cotton: On November 12, March 2015 cotton generated a short-term sell signal, which reversed the short-term buy signal of October 29. March 2015 cotton remains on an intermediate term sell signal.

March cotton lost 1.19 cents on heavy volume of 55,895 contracts. Total open interest increased by 2,407 contracts, which relative to volume is approximately 65% above average meaning that new short sellers were aggressively entering the market in heavy numbers and driving prices lower (60.08).Making the total open interest increase considerably more bearish was the fact that the December contract lost 9,353 of open interest. As this report is being compiled on November 13, March 2015 cotton is trading 1.58 cents lower and is made a new contract low of 58.57. Stand aside.

Coffee:

December coffee lost 15 ticks on extremely heavy volume of 55,949 contracts.Volume was the strongest since April 10 when 57,812 contracts were traded and the May contract closed at 2.0610. On November 12, total open interest declined by a massive 2,823 contracts, which relative to volume is approximately 100% above average meaning that liquidation was extremely heavy on the modest decline. The December contract accounted for loss of 8,752 of open interest. As this report is being compiled on November 13, March coffee is trading 4.10 cents higher on heavy volume. Although coffee remains on a short and intermediate term sell signal, clients should begin thinking about initiating light bullish positions.