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Soybeans:

November soybeans lost 2.00 cents on volume of 142,862 contracts. Volume was the lowest since September 18 when November soybeans lost 11.00 cents on volume of 124,826 contracts and total open interest increased by 586 contracts. On September 23, total open interest increased only 216 contracts, which is minuscule and dramatically below average. The November contract accounted for loss of 3,938 of open interest, which makes the minor increase of open interest more impressive (bearish). Yesterday, November soybeans made a new contract low at 9.31, and as this report is being compiled on September 24 yesterday’s contract low has not been taken out.The market is well overdue for a rally, however the bearish mindset remains well entrenched, especially since soybeans are approaching the harvest season, which is seasonally a weak period. Stand aside.

Soybean oil: For December soybean oil to generate a short-term buy signal, the low of the day must be above OIA’s September 24 key pivot point of 33.05.

December soybean oil gained 20 points on volume of 90,390 contracts. Total open interest increased by a massive 6,897 contracts, which relative to volume is approximately 210% above average meaning that a battle ensued between longs and shorts and longs were able to move the market fractionally higher. The October contract lost 2,177 of open interest, which makes the total open interest increased more impressive (bullish).It now looks like December soybean oil may be in a position to generate a short-term buy signal. Additionally, during September, soybean oil performance continues to be outstanding compared to soybeans and soybean meal. For example, from September 1 through September 23, December soybean oil has gained 0.56% (18 points) versus November soybeans, -8.59% (-88.00 cents), and soybean meal -11.92% ($- 41.80).

In short, soybean oil is displaying ongoing strength in the face of a very bearish performance for soybeans and soybean meal. Additionally it has been the best performer in the grain complex in September. Thus far through September 23, December corn is down 10.76% (- 39.25 cents) and December Chicago wheat -15.53% (- 87.50 cents).

As this report is being compiled on September 24, December soybean oil is trading 56 points higher and has made a daily high of 32.93, which is the highest print since September 19 (33.04).Another positive data point for soybean oil is the spread between the front month December and the back months continues to widen. The market remains in contango, but we are following the spread action closely because this may reveal the true direction of soybean oil. December soybean oil remains on a short and intermediate term sell signal. Stand aside.

Chicago wheat:

December Chicago wheat lost 0.75 cents on volume of 82,556 contracts. Total open interest increased by 1,817 contracts, which relative to volume is approximately 10% below average.The March contract accounted for loss of 773 of open interest, which makes the total open interest increase neutral. As this report is being compiled on September 24, December Chicago wheat is trading 6.75 cents higher. December Chicago wheat remains on a short and intermediate term sell signal. Stand aside.

WTI crude oil:

November WTI crude oil advanced 69 cents on volume of 493,164 contracts. Volume increased from September 22 when November WTI lost 78 cents on volume of 432,299 contracts and total open interest increased by 853 contracts. On September 23, total open interest increased by 1,162 contracts, which is minuscule and dramatically below average. However, the October contract lost 552 of open interest, November -6246, which makes the total open interest increased more impressive (bullish). As this report is being compiled on September 24, November WTI is trading 75 cents higher and has made a daily high of 92.33, which is slightly above yesterday’s high of 92.09 and the September 22 high of 91.92. Also, it is above the September 19 high of 92.24. Brent crude oil continues to be the weak sister and as this report is being compiled on September 24, has made a new contract low at 95.60. Based upon positive open interest action combined with widening of the inversion of the front versus back months, it does not appear that WTI is likely to make a sharp move lower. Perhaps, a test of the of the September 11 low of 89.56 is possible, but we do not see WTI moving much lower than that.November WTI remains on a short and intermediate term sell signal. Stand aside.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.3 million barrels from the previous week. At 358.0 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 0.4 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 0.8 million barrels last week but are near the lower limit of the average range for this time of year. Propane/propylene inventories rose 1.7 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories increased by 0.9 million barrels last week.

Natural gas:

October natural gas lost 3.4 cents on total volume of 220,556 contracts.Total open interest declined by a massive 11,498 contracts, which relative to volume is approximately 105% above average meaning that liquidation was very heavy on the modest decline.The October contract lost 15,563 of open interest. As this report is being compiled on September 24, November natural gas is trading 5.1 cents higher on low volume. We continue to think a bull call spread makes a lot of sense, and with volatility low, the spread is  inexpensive. We think the low for the move of 3.786 made on July 28 will be the season low.We see little downside risk at this juncture. On September 17, natural gas generated a short-term buy signal, but remains on an intermediate term sell signal.

Cotton:

December cotton gained 24 points on volume of 22,785 contracts. Total open interest increased by a massive 1,444 contracts, which relative to volume is approximately 140% above average meaning a battle ensued between longs and shorts and longs were able to move the market fractionally higher. Cotton made a new low for the move on September 23 of 62.06, and as this report is being compiled on September 24, December cotton is trading 1.30 cents lower and has made a new contract low at 61.02. We have advised a stand aside posture while waiting for a counter trend rally, which usually occurs after the generation of a sell signal. We continue to advise waiting for a rally, before considering bearish positions.On September 22, December cotton generated a short-term sell signal, which reversed the short-term buy signal of August 22.December cotton remains on an intermediate term sell signal.

Cocoa:

December cocoa lost $31.00 on volume of 25,860 contracts. Volume fell from September 22 when December cocoa advanced 69.00 on volume of 28,652 contracts and total open interest increased by 1,515 contracts. On September 23, total open interest increased again, this time by 1,867 contracts, which relative to volume is approximately 185% above average meaning that new longs and shorts were heavily entering the market, and that shorts had the edge by driving prices lower at the close.

Yesterday, December cocoa made a new contract high at 3,366, and as this report is being compiled on September 24, has made another contract high at 3,380. On September 24, December cocoa has closed at 3,371, which is a new contract high close.December cocoa is massively overbought, and it is hazardous to initiate bullish positions at current levels, especially since there has been a massive build up of open interest, which makes cocoa vulnerable to a sharp setback. We continue to advise a stand aside posture.December cocoa generated an intermediate term buy signal on September 18 and a short-term buy signal on September 19.

Coffee: December coffee will generate a short-term buy signal if the low of the day is above OIA’s key pivot point for September 24 of 1.9425. An intermediate term buy signal will be generated if the low for the day in the December contract is above OIA’s key pivot point of 1.8785.

December coffee gained 1.50 cents on light volume of 14,620 contracts. Volume increased somewhat from September 22 when December coffee advanced 1.40 cents on volume of 13,416 contracts and total open interest declined by 805 contracts. On September 23, open interest increased by a massive 1,592 contracts, which relative to volume is approximately 320% above average meaning that aggressive new short sellers and buyers battled over dominance, and longs had the edge by driving prices higher. As this report is being compiled on September 24, December coffee has closed at 1.8910, up 8.20 cents.December coffee remains on a short and intermediate term sell signal. Stand aside

10 year Treasury Note:

The December 10 year Treasury Note advanced 8 points on light volume of 938,294 contracts. Total open interest declined by 3,665 contracts, which is minuscule and dramatically below average. As this report is being compiled on September 24, the December note is trading 5 points lower while the major indices are rallying. The December note continues to be on a short and intermediate term sell signal, which indicates that U.S. interest rates are going higher. This also is supporting the higher US dollar, which is trading 35.6 points higher and has made a new contract high of 85.220, which takes out the high of 84.965 made during the week of July 8, 2013.