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Soybeans:

January soybeans advanced 13.75 cents on volume of 195,528 contracts. Volume was the lowest 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. Additionally, volume was below that of November 14 when January soybeans lost 31.00 cents on volume of 201,337 contracts and total open interest increased by 9,384 contracts.

On November 17, total open interest increased by 2,330 contracts, which relative to volume is approximately 45% less than average. The January and March contracts lost a total of 501 of open interest. As this report is being compiled on November 18, January soybeans are trading 8.00 cents lower but have not taken out yesterday’s low of 10.14 1/2. We think rallies will struggle, and the path of least resistance is downward. In order for January soybeans to resume its advance , it must make a daily low above OIA’s key pivot point for November 18 of 10.34 3/8, and for an intermediate term buy signal to be generated, January soybeans must make a low above OIA’s key pivot point for November 18 of 10.46 3/4.

Soybean meal:

December soybean meal advanced $7.20 on volume of 114,473 contracts. Total open interest increased by 1,049 contracts, which relative to volume is approximately 50% below average.The December contract accounted for loss of 8,701 of open interest. As this report is being compiled on November 18, December soybean meal is trading 5.50 lower on the day. December soybean meal remains on a short and intermediate term buy signal. We think the move to the upside is over and the path of least resistance is lower.

Corn:

December corn lost 4.25 cents on volume of 341,562 contracts. Total open interest declined by just 637 contracts, which is minuscule and dramatically below average. The December contract accounted for loss of 18,054 of open interest, and the minor open interest decline indicates there was significant increases of open interest in the forward months which almost offset the decline in the December contract. In short, the price and open interest action on November 17 was bearish. As this report is being compiled on November 18, December corn is trading 4.75 cents lower and has taken out yesterday’s low of 3.74 1/4 and is the lowest print since 3.72 3/4 made on November 12. Like the rest of the grain complex, we see corn as a market that is ultimately headed lower.

Chicago wheat:

December Chicago wheat lost 8.75 cents on volume of 91,595 contracts. Total open interest declined by 4,313 contracts, which relative to volume is approximately 75% above average meaning that liquidation was very heavy on the decline. The December contract accounted for loss of 10,638 of open interest. As this report is being compiled on November 18, December Chicago wheat is trading 4.00 cents lower and has made a daily low of 5.44 1/4, which is the lowest print since 5.37 made on November 13. December Chicago wheat remains on a short and intermediate term buy signal. Stand aside. We think this is a rally in a bear market.

WTI crude oil:

December WTI crude oil lost 18 cents on volume of 593,325 contracts. Total open interest declined by 56,918 contracts, which relative to volume is approximately 300% above average meaning that the December contract lost 74,309 of open interest as it nears expiration. As this report is being compiled on November 18, January WTI is trading $1.17 lower and has made a daily low of 74.26, which is above its contract low of 73.22 made on November 14.Looking at the chart, WTI exhibits a pattern of making new contract lows, then having a one-day rally before making new contract lows. The market is extremely weak and its inability to rally underscores the reality that prices may be headed significantly lower from here. Stand aside.

Natural gas:

December natural gas advanced 32.1 cents on volume of 394,482 contracts. Surprisingly, volume increased only 54,663 contracts from November 14 when natural gas advanced 4.3 cents and total open interest increased by 8,038 contracts. Additionally, volume was below that of November 13 when December natural gas lost 20.8 cents on volume of 407,635 contracts and total open interest declined by 7,025 contracts.The relatively weak volume on a major advance indicates a lack of participation.

On November 17, total open interest increased by 6,792 contracts, which relative to volume is approximately 25% below average. However, the December contract lost 9,849 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled, on November 18, December natural gas is trading 15.4 cents lower and has made a daily low of 4.149, which is below OIA’s key pivot point for November 18 of 4.157. Natural gas must make a daily low above the pivot point for the rally to resume in earnest.We have no recommendation.

Gold:

December gold lost $2.10 on heavy volume of 239,764 contracts. However, volume fell from the 331,205 contracts traded on November 14 when December gold advanced $24.10 and total open interest increased by 3,611 contracts. On November 17, total open interest increased by 3032 contracts, which relative to volume is approximately 45% less than average. The December contract lost 8,451 of open interest, which makes the total open interest potentially bullish. As this report is being compiled on November 18, December gold is trading 10.40 higher and has made a new high for the move at 1204.10, which is the highest print since 1202.40 made on October 31. This was made in the early morning hours between 4:00 and 4:15 CST.

On November 18, the dollar index is sharply lower, which is undoubtedly assisting gold in its rally. In order for December gold to generate a short-term buy signal, the low the day must be above OIA’s key pivot point for November 18 $1201.20. One reason for thinking the move higher may be for real is that silver has been acting congruently with gold, which is a definite change from the past couple of months.

Coffee:

March coffee lost 4.55 cents on volume of 27,979 contracts. Total open interest declined by 1973 contracts, which relative to volume is approximately 185% above average meaning that liquidation was extremely heavy on the decline. The December contract accounted for loss of 3,738 of open interest.Yesterday’s close of 1.9180 is the lowest since 1.8875 made on November 12. Additionally, the close was below the 20 day moving average of 1.9217 and the 5 day moving average of 1.9247.We think coffee prices are ultimately headed higher, but cannot discount the possibility of a test of the November 10 low of 1.8540.Also, a test of 1.8060, which was the low on September 19 and 22. One way of trading coffee with volatility at the low end is through call options. However, this may be premature, and suggest that clients remain on the sidelines for now.