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Soybeans:

November soybeans lost 8.75 cents on relatively heavy volume of 199,568 contracts. Volume was the highest since September 11 when November soybeans lost.12 25 cents on volume of 259,643 contracts and total open interest increased by 8,469 contracts. On September 16, total open interest increased again, this time by 7,590 contracts, which relative to volume is approximately 50% above average meaning that aggressive new short sellers were entering the market and driving prices lower. The November contract lost 1,956 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on September 17, November soybeans are trading +0.75 and have made a daily high of 9.88, which is below yesterday’s high of 9.99 3/4. November soybeans remain on a short and intermediate term sell signal. Stand aside.

Soybean oil:

December soybean oil lost 47 points on volume of 87,613 contracts. Total open interest increased only 10 contracts. The December contract lost 294 of open interest and the October 2014 through December 2015 contracts all gained open interest. As this report is being compiled on September 17, December soybean oil is trading 44 points higher and has made a daily high of 33.63, which is below yesterday’s high of 33.83, the high for the move.Today’s low of 33.04 is slightly below OIA’s key pivot point of 33.06 for September 17. In order for a buy signal to be generated, the low the day must be above the pivot point. Continue to stand aside.

Corn:

December corn gained 0.75 cents on volume of 220,948 contracts. Volume was the highest since September 11 when December corn lost 4.75 cents on volume of 266,751 contracts and total open interest increased by 11,043 contracts. On September 16, total open interest increased by 4,770, which relative to volume is approximately 20% below average. The December contract accounted for loss of 1,495 of open interest, which makes the total open interest increase neutral. The reason for this is that neither side of the trade was able to move corn much beyond a fractional gain. As this report is being compiled on September 17, December corn is trading 2.50 lower, which is above the contract low of 3.35 3/4 originally made on September 11 and tested again on September 15. December corn remains on a short and intermediate term sell signal. Stand aside.

Chicago wheat:

December Chicago wheat lost 4.50 cents on volume of 66,854 contracts. Total open interest increased by 4,463 contracts, which relative to volume is approximately 160% above average meaning that new short sellers continued to pile into Chicago wheat and drive it to a new contract low of 4.91.As this report is being compiled on September 17, December Chicago wheat is trading 2.00 cents higher, but has not taken out yesterday’s contract low. December wheat remains on a short and intermediate term sell signal. Stand aside.

WTI crude oil:

October WTI crude oil advanced $1.96 on heavy volume of 687,250 contracts. Volume increased substantially from September 15 when October WTI advanced 65 cents on volume of 534,680 contracts and total open interest declined by 7,487 contracts. Additionally, volume exceeded that of September 12 when October WTI lost 56 cents on volume of 659,712 contracts and total open interest increased by 623 contracts. On September 16, total open interest declined by a hefty 18,951 contracts, which relative to volume is  average. The October contract accounted for loss of 25,020 of open interest and there were insufficient increases of open interest in the forward months to offset the decline in the October contract. October WTI will generate a short-term buy signal, if the low the day is above OIA’s key pivot point of 94.96. Until this occurs, we recommend a stand aside posture.

This morning’s reading of crude oil inventories show that stocks increased by 3.7 million barrels, which is the first increase during the previous 11 weeks.

From the September 9 report:

“Remarkably, October WTI is declining in the face another decline in inventories in the latest EIA report. With the decline of 1 million barrels in the latest EIA report, WTI inventories have declined by 29.7 million barrels during the past 11 weeks. Despite the massive decline of crude oil inventories, this has not halted the decline in prices.”

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.7 million barrels from the previous week. At 362.3 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 decreased by 1.6 million barrels last week, and are in the middle of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 0.3 million barrels last week but are below the lower limit of the average range for this time of year. Propane/propylene inventories rose 1.4 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories increased by 4.9 million barrels last week.

Natural gas:

October natural gas gained 6.4 cents on volume of 286,780 contracts. Total open interest increased by 4,410 contracts, which relative to volume is approximately 40% below average. However, the October contract lost 10,378 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled on September 17, October natural gas is trading 1.5 cents higher and has made a new high for the move at 4.040, which is the highest print since September 2 (4.078).

The moving averages are converging with the 5 day moving average of 3.924, 20 day, 3.925, 50 day, 3.928. Within the next day or two, the 20 day moving average will cross above the 50 day moving average, which indicates that natural gas is gaining strength short-term against the longer-term moving average. October natural gas will generate a short-term buy signal if the low for the day on September 17 is above OIA’s key pivot point of 3.956 and it is highly likely a buy signal will be generated today.

Tomorrow, is the natural gas storage report released by the Energy Information Administration, and this will undoubtedly increase volatility.We did some research on market action during the previous 4 EIA reports, and they show that the average range (daily high minus daily low) for the past 4 reports have been 13.3 cents while the average close has shown a decline of 1.2 cents. The biggest gain occurred on Thursday August 21 when natural gas advanced 7.00 cents and the biggest decline occurred last week (September 11) with a loss of 13.1 cents. The big range day occurred on August 21 of 15.8 cents and a close second was the range on September 11 of 15.4 cents.If clients want to enter bullish positions after the generation of the buy signal, we recommend using a bull call spread in options, a much more conservative trade compared to futures. Your upside is limited and so is your downside.

Copper:

December copper advanced 8.05 cents on heavy volume of 90,613 contracts.Volume was the strongest since August 20 when 91,356 contracts were traded and December copper closed at $3.1975. On September 16, total open interest declined by 4,096 contracts, which relative to volume is approximately 75% above average meaning that liquidation was extremely heavy on the strong advance. This is bearish open interest action relative to the price advance. It should be noted that during the spike in prices, from 10:45-11:15 a.m. CDT, volume totaled 23,949 contracts. The market made a new high for the move at 3.2120, which is the higher than the print of September 8 (3.2095). The reason for the dramatic advance was due to the Chinese government announcing that they were embarking upon further quantitative easing, and reports that the Federal Reserve would continue its accommodative monetary stance. However, despite the move higher, December copper remains on a short and intermediate term sell signal. Stand aside.

Euro:

The December euro advanced 24 pips on volume of 214,151 contracts. Total open interest declined by 2,710 contracts, which relative to volume is approximately 45% below average. As this report is being compiled after the release of the Federal Reserve minutes on September 17, the December euro is trading 49 pips lower. The December euro remains on a short and intermediate term sell signal.Stand aside.

British pound:

The December British pound advanced 53 pips on volume of 127,226 contracts. Total open interest declined by 4,509 contracts, which relative to volume is approximately 40% above average meaning that liquidation was heavy on the advance. As this report is being compiled after the release of the Federal Reserve minutes on September 17, the December pound is trading 33 pips higher. The December pound remains on a short and intermediate term sell signal. Stand aside.

Canadian dollar:

The December Canadian dollar advanced 61 pips on volume of 75,673 contracts.Total open interest increased by 654 contracts, which relative to volume is approximately 55% below average. As this report is being compiled on September 17 after the release of the Federal Reserve minutes, the December Canadian dollar is trading 21 pips higher on the day.The December Canadian dollar remains on a short and intermediate term sell signal.Stand aside.

Australian dollar:

The December Australian dollar advanced 65 pips on volume of 138,070 contracts. Total open interest declined by 1,583 contracts, which relative to volume is approximately 45% below average. As this report is being compiled after the release of the Federal Reserve minutes on September 17, the Australian dollar is collapsing, down 1.12 cents. The December Australian dollar remains on a short and intermediate term sell signal. Stand aside.

Cotton:

December cotton lost 29 points on volume of 17,377 contracts. Total open interest declined by a massive 1,278 contracts, which relative to volume is approximately 185% above average meaning that liquidation was extremely heavy on the modest decline. The December contract accounted for loss of 1,574 of open interest. As this report is being compiled, December cotton is trading 12 points higher and has made a daily low of 65.40, which is below OIA’s key pivot point of 65.94. In order for the market to resume its advance, the low the day must be above the pivot point. Until this occurs, continue to stand aside.

Cocoa:

December cocoa advanced $13.00 on volume of 16,871 contracts. Total open interest declined again, this time by 812 contracts, which relative to volume is approximately 95% above average meaning that liquidation was heavy on the modest advance.The December contract accounted for loss of 1,023 of open interest.From September 5 through September 16, open interest has declined every day and totals 11,096 contracts while December cocoa has declined by $62.00. December Cocoa made its low for the move at $3019 on September 11 and since then has rallied $134.00 through September 17.

As this report is being compiled on December 17, December cocoa has closed at 3,153, up $83.00 from yesterday’s close. Today, December Cocoa made a high of 3,165, which is the highest print since September 3 (3,165). Now that cocoa has blown out large numbers of market participants, it will be interesting to see whether today’s rally was powered higher by new buyers. If this is the case, December cocoa may have the potential to reverse the sell signals.Remember, during cocoa’s decline from September 5, it never experienced a day in which there was an open interest increase.We interpret this as confirmation that market participants as a whole are not sufficiently bearish. We want to take a look at today’s volume and open interest stats and will advise a course of action in tomorrow’s report. Stand aside.

Coffee:

December coffee advanced 3.05 cents on volume of 20,878 contracts. Volume was the highest since September 12 when December coffee lost 90 points on volume of 21,345 contracts and total open interest increased by 252 contracts. On September 16, total open interest increased by 728 contracts, which relative to volume is approximately 40% above average meaning that new longs were entering the market and driving prices higher (1.8795). The December contract accounted for loss of 644 of open interest, which makes the total open interest increase more impressive (bullish).

The price advance accompanied by an increase in open interest is the first we have seen since September 4 when December coffee advanced 15 points on volume of 20,031 contracts and total open interest increased by 895 contracts. On September 17, December coffee is trading 40 points lower. December coffee remains on a short-term sell signal, but an intermediate term buy signal. Stand aside.