Soybeans:

March soybeans lost 8.50 cents on volume of 90,394 contracts. Open interest declined by 604 contracts, which in relation to volume is approximately 70% below average. As this report is being compiled on January 2, March soybeans are trading 18.50 cents lower and has made a new low for the move at $13 89 1/2. Stand aside.

Soybean meal:

March soybean meal lost $5.40 on volume of 41,641 contracts. Open interest declined by 357 contracts, which in relation to volume is approximately 50% less than average. As this report is being compiled on January 2, March soybean meal is trading 14.10 lower and has made a new low for the move at $405.20, which breaks the low of 405.50 made on November 20. The next major area support should be at the 393.00 level, which was the low made on July 24. Stand aside.

Corn:

March corn gained 4.50 cents on volume of 106,239 contracts. Open interest declined by 4,187 contracts, which in relation to volume is approximately 50% above average, meaning that liquidation was fairly heavy on the light advance. As this report is being compiled on January 2, corn is made a low of $6.87 3/4, which is a fraction above the low made on December 20 of 6.87 1/2. Stand aside.

Wheat:

March wheat lost 0.75 cents on volume of 42,842 contracts. Open interest increased by a heavy 3,181 contracts, which in relation to volume is approximately approximately 200% above average, meaning that aggressive new longs and shorts were entering the market, but could not move wheat significantly in either direction. As this report is being compiled on January 2, March wheat is trading 20.25 cents lower and has made a new low for the move at $7.52 1/2. This is the lowest price for March wheat since July 2 when it made a low of $7.40 1/4. Stand aside.

Crude oil:

February crude oil gained $1.02 on volume of 251,281 contracts. Open interest increased by 5,796 contracts, which in relation to volume is average. In the January 1 Weekend Wrap, we questioned whether crude oil would pull back before or after it generated a short-term buy signal. There is no question that a short-term buy signal will be generated on January 2, however an intermediate term buy signal will not be generated. Although crude oil was significantly overbought on December 31, on January 2, it is massively overbought relative to its 50 day moving average. Crude oil has made a new high for the move of $93.87 on January 2, which slightly takes out the high of $93.84 made on September 21, 2012. We have been cautioning our readers that crude oil appeared to be transitioning into a short-term bullish environment. The market needs to do more work on the downside before it becomes likely that bullish positions would be recommended. Stand aside.

 Natural gas:

February natural gas lost 11.8 cents on volume of 158,427 contracts. Open interest increased by a massive 12,332 contracts, which in relation to volume is approximately 210% above average, meaning that new shorts were extremely aggressive and moving the market sharply lower. The open interest increase on December 31 was the highest since December 12 when natural gas lost 3 cents and open interest increased by 12,652 contracts on volume of 467,610 contracts. Because volume was 3 times heavier on December 12 than on December 31, the open interest increase on December 31 is truly massive. As this report is being compiled on January 2, natural gas is trading 15.3 cents lower and has made a new low for the move at $3.050, which is the lowest price for February natural gas since September 25. There is a gap that will likely be filled between the September 25 high of 2.954 and the September 27 low of 3.093. Stand aside.

Copper:

March copper gained 6.30 cents on volume of 29,607 contracts. Open interest increased by 130 contracts, which is minuscule and dramatically below average. On January 2, copper is trading 8.40 cents higher and has made a new high for the move at $3.7590, which takes out the high of 3.7550 made on October 19. Copper will not reverse the short-term sell signal on January 2, but it is likely this will occur on January 3. Stand aside.

Gold:

February gold gained $19.90 on light volume of 96,449 contracts. Open interest increased by 2,472 contracts, which in relation to volume is average. On January 2, gold is made a high of $1695.40, which is the highest price since December 18. Gold will not generate a short or intermediate term buy signal on January 2. Stand aside.

Silver:

March silver gained 25.2 cents on volume of 20,166 contracts. Open interest declined by 259 contracts, which in relation to volume is approximately 45% less than average. As this report is being compiled on January 2, March silver is trading 70.8 cents higher. Silver will not generate a short or intermediate term buy signal on January 2. Stand aside.

British pound:

 The British pound gained 92 points on volume of 60,161 contracts. Open interest declined by 428 contracts, which in relation to volume is approximately 60% less than average. For the past 6 trading sessions open interest has declined 19,056 contracts while the pound lost 39 points. Stand aside.

Euro:

The March euro lost 23 points on volume of 103,163 contracts. Open interest increased by 1,601 contracts, which in relation to volume is approximately 35% less than average. The market remains overbought and we are looking for a correction down to the 1.3100-1.3150 area. If this does not hold, the euro should find support at 1.3000, which is close to be 50 day moving average of 1.2983.

S&P 500 E Mini:

The S&P 500 E mini gained 36.00 points on volume of 1,481,651 contracts. Open interest declined by 29,235 contracts, which in relation to volume is approximately 5% less than average, but a large number considering that open interest should have increased on an advance of the magnitude seen on December 31. As this report is being compiled on January 2, the E mini is trading 26.50 points higher on fairly light volume. The next obstacle is going to be the debt ceiling issue, which is a far more serious issue than the fiscal cliff ever was. Stand aside.