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Soybeans:

January soybeans lost 31.00 cents on light volume of 201,337 contracts. Remarkably, volume was the weakest since November 7 when January soybeans advanced 8.75 cents on volume of 179,147 contracts and total open interest declined by 1,247 contracts. On November 14, total open interest increased by a massive 9,384 contracts, which relative to volume is approximately 75% above average, meaning that large numbers of aggressive short-sellers were entering the market and driving prices lower (10.20). The November contract accounted for loss of 168 of open interest. As this report is being compiled on November 17, January soybeans are trading 5.50 cents higher after making a daily low of 10.14 1/2, which is the lowest print since 10.11 1/2 made on November 6. In the November 16 Weekend Wrap, we discussed soybeans and their inability to generate an intermediate term buy signal and the fact that managed money has been largely absent from the rally. January soybeans remain on a short-term buy signal, but an intermediate term sell signal. We have no recommendation.

Soybean meal:

December soybean meal lost $13.60 on volume of 121,109 contracts. Total open interest declined by 1,311 contracts, which relative to volume is approximately 50% below average. The December contract accounted for loss of 4,610 of open interest. As this report is being compiled on November 17, December soybean meal is trading $1.90 higher and has made a daily low of 373.00, which is the lowest print since 371.30 made on November 6. December soybean meal remains on a short and intermediate term buy signal. We have no recommendation.

Corn:

December corn lost 4.50 cents on volume of 322,179 contracts. Volume was the weakest since November 6 when December corn advanced 1.00 cent on volume of 293,378 contracts and total open interest declined by 784 contracts. On November 14, total open interest increased by a hefty 10,874 contracts, which relative to volume is approximately 30% above average meaning that new short sellers were entering the market and driving prices lower. The December contract accounted for loss of 14,624 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on November 17, December corn is trading 4.25 cents lower and has made a daily low of 3.74 1/4, which is the lowest print since 3.72 3/4 made on November 12.

From the November 16 Weekend Wrap: 

“On Friday, December corn closed at 3.81 3/4, which is the highest weekly close since July 7. On the weekly chart there is a gap between 3.87 1/2 and 3.94, which we see as the upper end of the trading range for December corn. Conceivably, a rally to the 3.96 5/8 area cannot be ruled out, but the market will likely struggle beyond this point.”

Chicago wheat: On November 14, December Chicago wheat generated an intermediate term buy signal after generating a short-term buy signal on October 17.

December Chicago wheat advanced 6.75 cents on volume of 140,269 contracts. Volume shrank dramatically from November 13 when December Chicago wheat advanced 11.00 cents on huge volume of 220,099 contracts and total open interest increased by 4,059 contracts. On November 14, open interest increased again, this time by 3,058 contracts, which relative to volume is approximately 15% below average. However, the December contract lost 4,866 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled on November 17, December Chicago wheat is trading 7.25 cents lower and has made a daily high of 5.63 1/4, which is below Friday’s high of 5.64 3/4.

From the November 16 Weekend Wrap:

“We think the market will struggle beyond 5.71 1/2, and for the rally to continue, the December contract must make a low above this pivot point.We do not see December Chicago wheat trading much above 5.90. Once a sufficient number of short sellers have been blown out, the rally will peter out and the downtrend will resume.”

Kansas City wheat: On November 14, December Kansas City wheat generated a short-term buy signal, but remains on an intermediate term sell signal.

WTI crude oil:

December WTI crude oil advanced $1.61 on heavy volume of 716,997 contracts.However, volume contracted from November 13 when December WTI lost $2.97 on volume of 883,111 contracts and total open interest increased by 14,725 contracts. On November 14, total open interest declined by 12,053 contracts, which relative to volume is approximately 35% less than average, but an open interest decline on a price advance is clearly bearish.The December contract accounted for loss of 34,086 contracts.

As this report is being compiled on November 17, December WTI is trading 68 cents lower and has made a daily low of 74.71, which is above Friday’s contract low of 73.25. The market is massively oversold and is due for a corrective bounce, but WTI cannot muster enough strength for a 2 to 3 day rally.The relatively high ratio of longs in WTI is astounding considering the magnitude of the downside move, and this will exert selling pressure whenever the market rallies.According to the latest COT report managed money is long WTI by a ratio of 3.97:1, which is up from the previous week of 3.54:1 and down slightly from the ratio of 2 weeks ago of 4.13:1.

Natural gas:

December natural gas advanced 4.3 cents on volume of 339,819 contracts. Volume was the lowest 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 14, total open interest increased by 8,038 contracts, which relative to volume is approximately 10% below average. The December contract accounted for loss of 7,395 of open interest, which makes the total open interest increase more impressive (bullish). On November 16, December natural gas gapped higher at the opening in the evening session and is currently trading 19.8 cents higher on low volume. Thus far in trading there is a gap between Friday’s high of 4.074 and the low on November 17 of 4.113.We think the gap should be filled quickly, and this is likely to be the opportunity to initiate bullish positions.In order for the uptrend to continue, December natural gas must make a low above OIA’s key pivot point for November 17 of 4.139. On November 3, December natural gas generated a short-term buy signal and an intermediate term buy signal on November 5.

Gold:

December gold advanced $24.10 on very heavy volume of 331,205 contracts. Volume traded on November 14 took out the previous high of 328,098 contracts traded on November 7 when December gold advanced $27.20 and total open interest increased by 16,366 contracts. On November 14, total open interest increased 3,611 contracts, which relative to volume is approximately 50% below average.However, the December contract lost 5,863 of open interest, which makes the total open interest increase more impressive (bullish). On Friday, December gold made a high of 1192.90 and as this report is being compiled on November 17, gold made a high a fraction above this at 1193.60 and is currently trading 3.20 lower on the day.

Coffee:

March coffee advanced 3.20 cents on heavy volume of 54,576 contracts.Volume was the strongest since November 12 when coffee lost 15 ticks on volume of 55,949 contracts and total open interest declined by 2,823 contracts. On November 14, total open interest increased by 1,303 contracts, which relative to volume is approximately 10% below average. However, the December contract accounted for loss of 4,619 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled on November 17, March coffee is trading 2.95 cents lower on the day.We think the market is ultimately headed higher, but it may undergo a period of consolidation before resuming its uptrend. March coffee generated a short-term sell signal on October 23 and an intermediate term sell signal on November 5.