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Tomorrow we will report on the action in the major currencies as well as gold and silver. Yesterday, as we had indicated, the December yen generated a short-term buy signal.

Soybeans:

November soybeans advanced 19.50 on very heavy volume of 402,225 contracts.Volume surpassed that of October 10 when November soybeans lost 19.50 cents on volume of 375,878 contracts and total open interest increased by 18,595 contracts. On October 14, total open interest declined by 9,432 contracts, which relative to volume is approximately 10% below average, but the decline of open interest on a strong advance to new highs for the move (9.701/2) is negative. The November contract accounted for loss of 17,400 of open interest and there were not enough open interest increases in the forward months to offset the loss in November.

As this report is being compiled on October 15, November soybeans are trading 6.75 cents lower after making a new high for the move at 9.78 1/2. In order for November soybeans to generate to generate a short-term buy signal, the low the day must be above OIA’s key pivot point for October 15 of 9.70 1/8. We will be tracking soybeans carefully and will be moving to the January contract tomorrow. If soybeans are unable to generate a short-term buy signal after another attempt, we will consider recommending bearish positions.The open interest action clearly indicates bearish action.

Soybean meal:

December soybean meal advanced $6.10 on volume of 99,987 contracts. Total open interest increased by 1,009 contracts, which relative to volume is approximately 50% below average. The October contract lost 113 of open interest, December 2014 -1918, which makes the total open interest increase more impressive (bullish). As this report is being compiled, December soybean meal is trading 1.20 higher on the day. December soybean meal remains on a short and intermediate term sell signal. Stand aside.

Soybean oil:

December soybean oil lost 17 points on volume of 76,037 contracts. Total open interest increased by 643 contracts, which relative to volume is approximately 55% below average. The October contract lost 174 of open interest, December 2014 -866, which makes the total open interest increased more impressive (bearish). As this report is being compiled on October 15, December soybean oil is trading 34 points lower and has made a daily low of 32.32, which is below that of October 13 (32.24). Maintain the long May 2015-short December 2015 bull spread. The December contract of Malaysian palm oil is 10.98% above the September 2 low. In short, the demand for palm oil remains healthy.

Corn:

December corn advanced 11.00 cents on volume of 298,294 contracts. Total volume increased substantially from October 13 when December corn advanced 12.00 cents on volume of 205,767 contracts and total open interest increased by 4,906 contracts. On October 14, total open interest declined by 3,188 contracts, which relative to volume is approximately 50% below average. The December contract accounted for loss of 11,373 of open interest, and there were insufficient increases in the forward months to offset the decline in December.

On October 14, December corn made a high of 3.57 1/2, and as this report is being compiled on October 15, December corn has made another new high at 3.58 1/4. Thus far in trading, the low has been 3.46 1/2, which is below OIA’s key pivot point of 3.48 7/8. We still think the market remains vulnerable to more downside after more short sellers have been blown out of the market.Stand aside

Chicago wheat:

December Chicago wheat advanced 4.00 cents on light volume of 53,887 contracts.Volume was lower than the trading activity on September 29 when December Chicago wheat advanced 7.00 cents on volume of 57,898 contracts and total open interest increased by 2570 contracts. On October 14, total open interest increased by 653 contracts, which relative to volume is approximately 55% below average, but an open interest increase on an advance in Chicago wheat is positive. Also positive was the fact that the December contract lost 1,113 of open interest and this means there were sufficient open interest increases in the forward months to offset the decline in December. As this report is being compiled on October 15, December Chicago wheat is trading 2.50 lower, but made a new high for the move at 5.16 1/4. In order for December Chicago wheat to generate a short-term buy signal, the low the day must be above OIA’s key pivot point for October 15 of 5.11 1/4. Stand aside.

WTI crude oil:

November WTI crude oil lost $3.90 on very heavy volume of 1,102,302 contracts. Volume was the strongest since October 2 when November WTI advanced 28 cents on volume of 1,004,463 contracts and total open interest increased by 1,374 contracts. On October 14, total open interest increased only 21,320 contracts, which relative to volume is approximately 20% below average.The November contract accounted for loss of 14,486 of open interest, which makes the total open interest increase more impressive (bearish).We continue to be amazed by minor increases of open interest on price declines. As we’ve said before, we will be watching for bottoming action accompanied by open interest increases at the low end of the trading range.As this report is being compiled on October 15, November WTI crude oil is trading 84 cents lower after making a new contract low of $80.01, which is the lowest print since June of 2012 when the July 2012 contract made a low of 77.28. Stand aside.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.0 million barrels from the previous week. At 361.7 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 1.2 million barrels last week, and are in the middle of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 0.4 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories rose 1.1 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 3.8 million barrels last week.

Natural gas:

November natural gas lost 10.0 cents on volume of 291,330 contracts. Total open interest increased by 1,807 contracts, which relative to volume is approximately 65% below average. The November contract accounted for loss of 7,792 of open interest. As this report is being compiled on October 15, November natural gas is trading 1.8 cents lower after making a new low for the move at 3.764,which takes out the previous low for the move of 3.786 made on July 28. The February 2015-May 2015 bull spread has narrowed 1.4 cents to 29.4 cents premium to February 2015 on October 15. We recommend exiting the spread upon penetration of the September 23 low of 26.9 cents premium to February 2015.

Yen: On October 14, the December yen has generated a short-term buy signal, but remains on an intermediate term sell signal.

The December yen advanced 45 pips on volume of 190,787 contracts. Total open interest declined by a minor 759 contracts, which relative to volume is approximately 80% below average. As this report is being compiled on October 15, the December yen has rocketed higher and making a new high for the move at .9510.We continue to advise a sideline stance.

Cocoa:

December cocoa advanced $43.00 on volume of 22,523 contracts. Volume declined from October 13 when December cocoa lost 98.00 on volume of 24,480 contracts and total open interest declined by 1,449 contracts.On October 14, total open interest declined again, this time by 1,238 contracts, which relative to volume is approximately 120% above average meaning that liquidation was heavy on the modest advance. This is clearly bearish open interest action relative to the price advance.The December contract accounted for loss of 1,888 of open interest. As this report is being compiled on October 15, December cocoa has closed at 3153, up 51.00. The bull spread is widening out, and we recommend holding the long of March 2015-short December 2015 cocoa futures spread.As we have said before, we do not think the bull move in cocoa is over and the spread is the best way to trade the market from a risk reward point of view.

Coffee:

December coffee advanced 3.80 cents on low volume of 19,112 contracts. Volume was stronger than the activity on October 13 when December coffee lost 2.30 cents on volume of 16,582 contracts and total open interest declined by 88 contracts. On October 14, total open interest increased by a massive 1,643 contracts, which relative to volume is approximately 230% above average meaning that aggressive new longs were entering the market in heavy numbers and driving prices higher (2.2280).As this report is being compiled on October 15, December coffee has closed at $2.1600, down 5.90 cents. However, the long July 2015 short March 2016 spread continues to widen. We think the spread has terrific upside, and strongly suggest the initiation of the position if it has not been done already.