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Lean Hogs:

December lean hogs lost 1.95 cents on volume of 40,260 contracts. Total open interest increased by massive 4,226 contracts, which relative to volume is approximately 300% above average. The October contract lost 725 of open interest. The COT report released on Friday showed that managed money added 1,214 to their long positions and also added 2,589 to their short positions. Commercial interests added 761 to their long positions and liquidated 4,438 of their short positions. As of the latest report, managed money is long hogs by ratio 1.43:1, down from the previous week of 1.47:1 and fractionally above the ratio two weeks ago of 1.42:1.

As this report is being compiled on October 17 the December contract is trading 45 points lower and has made a daily low of 41.475, which is slightly above its contract low of 41.100, which is also a multi-year low going back to October 2009 on the monthly continuation chart. Stand aside.

Corn: On October 14, December corn generated an intermediate term buy signal after generating a short term buy signal on September 21.

December corn gained 4.75 cents on heavy volume of 428,770 contracts. Total open interest declined by 8,387 contracts, which relative to volume is approximately 20% below average. The COT report revealed that managed money liquidated 3,075 of their long positions and also liquidated 34,257 of their short positions. Commercial interests liquidated 6,516 of their long positions and added 11,977 to their short positions. As of the latest report, managed money is short corn by ratio of 1.68:1, down from the previous week of 1.84:1 and the ratio two weeks ago 2.03:1.

It appears likely that a harvest low is in and that path of least resistance for corn futures are higher. While exports have been outstanding, the supply problem needs to be alleviated before the market can mount a sustainable move higher. However, with the massive short position held by managed money, corn will likely creep upward until short-sellers have been blown out. We have no recommendation.

Chicago wheat: On October 14, December Chicago week generated a short term buy signal and remains on an intermediate term sell signal.

December Chicago week gained 5.00 cents on volume of 155,623 contracts. Total open interest declined by massive 7,260, which relative to volume is approximately 75% above average meaning short-sellers were powering the market higher. The COT report revealed that managed money added 873 contracts to their long positions and liquidated a sizable 17,080 contracts of their short positions. Commercial interests liquidated 6,170 of their long positions and added 5,236 to their short positions.

As of the latest report, managed money remains heavily short Chicago week by ratio of 2.93:1, though this is down from the previous week of 3.21:1 and slightly above the ratio two weeks ago 2.85:1.The fundamentals for wheat are bearish and though prices can continue to advance due to the massive short position, the market could reverse at any moment. We recommend a stand aside posture in Chicago wheat.

WTI crude oil:

November WTI crude oil lost 9 cents on volume of 1,204,374 contracts. Total open interest declined by 35,721 contracts, which relative to volume is approximately 10% above average. The COT report revealed that managed money added 10,637 contracts to their long positions and liquidated 20,907 of their short positions. Commercial interests liquidated 8,628 of their long positions and added 12,564 to their short positions. As of the latest report, managed money is long crude oil by ratio of 4.06:1, up sharply from the previous week of 3.14:1 and double the ratio two weeks ago of 2.01:1. Three weeks ago, the ratio stood at a multi-month low of 1.79:1. No recommendation.

Dollar index:

The December dollar index advanced 47.9 points on volume of 26,801 contracts. Total open interest increased by a sizable 1,038 contracts, which relative to volume is approximately 25% above average meaning aggressive new buyers continue to flood into the dollar index and on Friday it made a high of 98.100, though this is down from the high for the move of 98.120 made on October 13.

The COT report revealed that leverage funds added 12,694 contracts to their long positions and also added 1,928 to their short positions. As of the latest report, leverage funds are short the dollar index by 1.32:1, down substantially from the previous week of 2.86:1 and two thirds lower than the ratio two weeks ago of 3.40:1. We have no recommendation.