Soybeans:

September soybeans advanced 1.50 cents on volume of 164,939 contracts. Total open interest increased by 5,491 contracts, which relative to volume is approximately 30% above average. The August through November contracts lost 2,370 of open interest, which makes the total open interest increase more impressive. September beans made a new high at $12.69, and as this report is being compiled on August 14, September beans have made another new high at 12.70 3/4. Soybeans remain on a short and intermediate term sell signal.

Soybean meal:

September soybean meal lost 90 cents on volume of 66,833 contracts. Total open interest increased by 2,747 contracts, which relative to volume is approximately 55% above average.. The August contract lost 194 of open interest. For the past 3 trading sessions beginning on August 12, the high in September meal has been $408.60, which is the high on August 14. During the 2 prior days, soybean meal has been unable to break above the $408 level. On August 12, September meal generated an intermediate term buy signal, but remains on a short-term sell signal. We would not be involved in the meal market until a short-term buy signal is generated.

Corn:

September corn lost 16.75 cents on heavy volume of 385,160 contracts. Total open interest increased by 1,414 contracts, which relative to volume is approximately 80% less than average. The September contract lost 19,182 of open interest. Interestingly, with the exception of August 12 when the crop conditions and supply demand report were released ($4.80 high), corn has been unable to rally above the 4.76 level. This has been the state of the market since August 5. As this report is being compiled on August 14, September corn is trading 7.75 cents higher at $4.63. If corn approaches the 476 level, it could be an opportunity to initiate bearish positions. However, corn is in its critical growing period and a spate of bad weather could potentially push corn above the 4.80 level, especially with the high net short position of managed money. Corn remains on a short and intermediate term sell signal.

Wheat:

September wheat lost 6.75 cents on heavy volume of 151,531 contracts. Total open interest declined 4,637 contracts, which relative to volume is approximately 20% above average. The September contract accounted for loss of 14,371 contracts. On August 13, September wheat made a new low at $6.26 1/4, which is its lowest price on the continuation chart since mid June 2012. As this report is being compiled on August 14, September wheat has made another new low at $6.23. For a time, we thought we would be a turnaround story, but it appears that US wheat prices will have to become more competitive on the world market. In the US, stocks are at multiyear lows, however this is not the case globally. Wheat remains on a short and intermediate term sell signal.

Cotton:

December cotton gained 1.64 cents on volume of 29,001 contracts. Open interest increased by a massive 5,358 contracts, which relative to volume is approximately 530% above average. Since cotton generated a short and intermediate term buy signal on August 7, the open interest increase has been nothing short of spectacular. Although cotton may be experiencing some short-term tightness, we think it is going to be a difficult task to move cotton above its April 2012 highs.

Live cattle:

October live cattle closed 67 points higher on volume of 47,474 contracts. Total open interest increased by 2,788 contracts, which relative to volume is approximately 120% above average, meaning that new longs were entering the market and driving prices higher. The August contract lost a total of 1,623 of open interest, which makes the total increase more impressive. Cattle made a new high for the move at 1.28550, which is the highest price for cattle on the continuation chart since May 2013. We continue to advise clients to wait for a pullback before initiating new long positions.

 Crude oil:

September crude oil advanced 72 cents on volume of 646,096 contracts. Total open interest increased by 5,199 contracts, which relative to volume is approximately 60% less than average. The September contract accounted for loss of 37,401 of open interest, which makes the total increase more impressive. On August 13, WTI made a new high at $107.20, but as this report is being compiled on August 14, September crude has been unable to breach yesterday’s high. Although crude remains on a short and intermediate term buy signal, we are less than enthused about the long side of the market.

Natural gas:

September natural gas lost 2.5 cents on heavy volume of 545,069 contracts. Total open interest increased by 6,396 contracts, which relative to volume is approximately 55% below average. The September contract lost 28,596 of open interest, which makes the total increase more impressive. As we said at the time, the low in September natural gas of $3.129 made on August 8 appears to have been a major low and it signified a key reversal day. Natural gas remains on a short and intermediate term sell signal, and has to make more upside progress before it can generate a short-term buy signal. Until then, stand aside.

Gold:

December gold lost $13.70 on volume of 158,069 contracts. Open interest declined by 2,995 contracts, which relative to volume is approximately 25% below average. For gold to continue its move higher, it must break decisively above $1350. We advise clients to wait for a pullback before initiating new long positions. Since generating a buy signal on August 9, the only pullback occurred on August 13. With the equity market looking increasingly fragile, we think that gold could take a good-sized tumble if the equity market moved sharply lower. Gold remains on a short-term buy signal, but an intermediate term sell signal.

Silver:

September silver closed unchanged on volume of 75,032 contracts. Open interest declined by 3,552 contracts, which relative to volume is approximately 75% above average. The decline would be expected considering silver advanced 93.2 cents and open interest increased by 4908 contracts on August 12. As this report is being compiled on August 14, silver is trading 40.7 cents higher and has made a new high for the move at $21.825. Like gold, clients should wait for a decent size pullback in silver. Although based upon price, silver is overbought, but certainly not from a COT and open interest standpoint. Silver has a tendency to trend upwards or downwards sharply in a compressed period of time. Corrections can be significant, and speculators do not want to be caught in one of these.

Euro:

The September euro lost 50 points on heavier than normal volume of 220,251 contracts. Volume was the highest since August 2 when 229,851 contracts were traded and open interest increased by 1,608 contracts while the September euro advanced 72 points. On August 13, open interest declined by 5,904 contracts, which relative to volume is average. We would prefer to see the euro setback, perhaps to the 1.3187 area. The euro remains on a short and intermediate term buy signal.

 S&P 500 E mini:

The S&P 500 E mini advanced 3.75 points on volume of 1,609,338 contracts. Open interest increased by 9,851 contracts, which relative to volume is approximately 55% below average. We reiterate our recommendation to initiate long put protection, especially for those who hold long equity positions.