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Soybeans:

January soybeans lost 18.50 cents on volume of 155,210 contracts. Volume rose from November 18 when January soybeans lost 13.00 cents on volume of 143,589 contracts and total open interest declined by 2,319 contracts.On November 19, total open interest declined by 2,222 contracts, which relative to volume is approximately 40% less than average. The January 2015 in March 2015 contracts lost a total of 5,350 of open interest. As this report is being compiled on November 20, January soybeans are trading 13.00 cents higher and trading at the day’s highs.

In order for January soybeans to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for November 20 of 10.04. January soybeans remain on an intermediate term sell signal, and though the market has had a significant rally from the lows, has been unable to generate an intermediate term buy signal. For this to occur, the low the day must be above OIA’s key pivot point for November 20 of 10.46 1/8. For the rally to resume, January soybeans must make a low above OIA’s key pivot point for November 20 of 10.33 7/8. As we have said in previous reports, we think the soybean rally is on its last legs and will resume its down trend.

The USDA reported sales of 483.02 thousand metric tons, which brings total commitments to date of 1366.9 billion bushels versus USDA projections for the season of 1.720 billion bushels. Approximately 79% of the USDA projection for the season has been committed and this week sale was the lowest of the season, which began on September 1.

Soybean meal:

January soybean meal lost $7.50 on total volume of 109,075 contracts. Total open interest increased by 3,378 contracts, which relative to volume is approximately 30% above average meaning that new short sellers were entering the market in substantial numbers and driving prices lower (355.60). Making the total open interest increase more impressive (bearish) was the December contract, which lost 4,874 of open interest. The open interest increase on a price decline in yesterday’s trading was the first one since November 13 when soybean meal lost $1.50 on volume of 106,449 contracts and total open interest increased by 4,101 contracts. However, on November 13, soybean meal made a high of 407.70 basis the December contract and closed fractionally lower on the day. In short the open interest increase on November 13 could be attributed to the rally in the earlier part of the session.

As this report is being compiled on November 20, January soybean meal is trading $5.20 higher and is trading at the highs of the day. In order for January soybean meal to generate a short-term sell signal, it must make a high for the day below OIA’s key pivot point for November 20 $351.70. In order for the rally to resume, the January contract must make a low of the day above OIA’s key pivot point for November 20 of 367.40.

The USDA reported sales of 265.75 thousand metric tons of soybean meal bringing total commitments to date of 6556.7 thousand metric tons versus USDA projections for the season of 12,800 thousand metric tons.

Corn:

March corn lost 9.00 cents relatively heavy volume of 403,153 contracts. Volume was the strongest since November 13 when corn advanced 8.50 cents on volume of 589,625 contracts and total open interest increased by 17,840 contracts. On November 19, total open interest declined by 2,666 contracts, which relative to volume is approximately 65% less than average.However, the December contract accounted for loss of 30,671 of open interest, which makes the small decline of total open interest bearish. In other words, there were sufficient open interest increases in the forward months to reduce total open interest significantly below average.

In order for March corn to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for November 20 of 3.76. For the rally to continue, March corn must make a low above OIA’s key pivot point for November 20 of 3.85 7/8. March corn remains on a short and intermediate term buy signal

The USDA reported sales of 908.7 thousand metric tons bringing total commitments to date of 812.3 million bushels versus USDA projections for the season of 1.750 billion bushels. This week’s sale was the highest since October 16 when USDA reported sales of 1031.2 thousand metric tons.

Chicago wheat:

March Chicago wheat lost 10.00 cents on volume of 104,203 contracts. Total open interest declined by 2,885 contracts, which relative to volume is average. The December contract accounted for loss of 10,787 of open interest. As this report is being compiled on November 20, March Chicago wheat is trading 9.00 cents higher and is trading at the highs of the day. If March Chicago wheat is to resume its uptrend, it must make a daily low above OIA’s key pivot point for November 20 of 5.42 7/8. A short-term sell signal will be generated if the daily high in the March contract is below OIA’s key pivot point for November 20 5.29 7/8. The fundamentals for wheat are unfavorable, and after the market goes through its backing and filling stage, we expect prices to resume their downtrend. March Chicago wheat remains on a short and intermediate term buy signal.

The USDA reported sales of wheat in all categories of 361.7  thousand metric tons, which brings total commitments to 594.6  million bushels versus USDA projections for the season of 925  million bushels.

WTI crude oil:

January WTI crude oil lost 5 cents on heavy volume of 792,006 contracts. Remarkably, volume was far stronger than the trade on November 18 when January WTI lost $1.02 on volume of 531,050 contracts and total open interest declined by 5,360 contracts. Additionally , volume was the strongest since November 13 when WTI lost $2.97 on volume of 883,111 contracts and total open interest increased by 14,725 contracts.  

On November 19, total open interest declined by 40,891 contracts, which relative to volume is approximately 105% above average meaning that liquidation was extremely heavy. The December contract lost 43,475 of open interest and will be going off the board shortly. As this report is being compiled on November 20, January WTI is trading 95 cents higher. There appears to be little or no enthusiasm for WTI on the upside, and it is likely another leg down is in the offing. Stand aside.

Natural gas:

December natural gas advanced 12.7 cents on heavy volume of 573,210 contracts. Volume was the strongest since November 6 when natural gas advanced 21 cents on volume of 646,234 contracts and total open interest increased by 30,084 contracts. On November 19, total open interest declined by 10,036 contracts, which relative to volume is approximately 25% below average, however a total open interest decline on a sizable advance to a secondary high of 4.508 is negative. The December contract accounted for loss of 16,914 contracts and there were insufficient open interest increases in the forward months to offset the decline in December.

As this report is being compiled on November 20, December natural gas is trading 11.1 cents lower after making a high of 4.502 while the January contract is trading 8.9 cents lower on the day. It appears the extreme weather in the East and Midwest has been discounted by the market, and it may become risky to remain long at current levels. This is not to say that natural gas cannot move higher, but it may have already seen the high on November 10 when the December contract printed 4.544. January natural gas remains on a short and intermediate term buy signal. We have no recommendation. 

The Energy Information Administration announced that working gas in storage was 3,594 Bcf as of Friday, November 14, 2014, according to EIA estimates. This represents a net decline of 17 Bcf from the previous week. Stocks were 201 Bcf less than last year at this time and 244 Bcf below the 5-year average of 3,838 Bcf. In the East Region, stocks were 104 Bcf below the 5-year average following net withdrawals of 11 Bcf. Stocks in the Producing Region were 105 Bcf below the 5-year average of 1,251 Bcf after a net injection of 1 Bcf. Stocks in the West Region were 35 Bcf below the 5-year average after a net drawdown of 7 Bcf. At 3,594 Bcf, total working gas is below the 5-year historical range.

Gold:

December gold lost $3.20 on heavy volume of 315,371 contracts. Volume was the strongest since November 14 when December gold advanced 24.10 on volume of 331,205 contracts and total open interest increased by 3,611 contracts. On November 19, total open interest declined just 98 contracts. As this report is being compiled on November 20, December gold has closed at $1190.90, down $3.00. 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 20 of $1201.00. For the downtrend to continue, the high of the day must be below OIA’s key pivot point for November 20 of $1180.10. December gold remains on a short and intermediate term sell signal. Stand aside

Coffee:

March coffee advanced 6.20 cents on light volume of 23,381 contracts. Volume was the weakest since October 29 when 20,558 contracts were traded and March coffee closed at 1.9395.On November 19, total open interest declined by 157 contracts, which is a major negative, especially combined with the very weak volume. The December contract lost 1,366 of open interest and there were insufficient open interest increases in the forward months to offset the loss in December. Yesterday’s price, volume and open interest action was very negative. As such, it is not surprising to see March coffee trading sharply lower, down 10.25 cents to close at 1.8885, which is the lowest close since 1.8875 made on November 12. While we think coffee is ultimately headed higher, the market has been unable to generate either a short or intermediate term buy signal. Stand aside.