Soybeans:

January soybeans  gained 1.75  cents on volume of 164,215 contracts. Open interest increased by 1,400 contracts, which in relation to volume is approximately 60% less than average. The January contract lost 4,683 contracts of open interest. The spread action was negative with March gaining 6 cents and May advancing 8 cents. As this report is being compiled on November 30, January soybeans are trading 16.50 lower. Stand aside.

Soybean meal:

January soybean meal gained $3.10 on light volume of 76,743 contracts. Open interest increased by 2,168 contracts, which in relation to volume is average. The December contract accounted for liquidation of 3,522 contracts. As this report is being compiled on November 30, January soybean meal is trading 4.20 lower. Stand aside.

Soybean oil:

January soybean oil lost 26 points on volume of 134,997 contracts. This was the first time in 4 days that volume in soybeans exceeded soybean oil.  On November 29, open interest declined by 3,608 contracts, which in relation to volume is average. Stand aside.

Corn:

March corn lost 5.25 cents on heavy volume of 383,133 contracts. Volume was the highest since November 13 when 449,435 contracts were traded and open interest declined by 8,936 contracts while December corn declined by 5.50 cents. On November 29, open interest declined by 9,704 contracts, which in relation to volume is average. The December contract accounted for a loss of 38,293 contracts of open interest and from March 2013 through March 2014 open interest increased, which whittled down total open interest to an average number. It appears that the market is anticipating a decline in Argentine production, and that farnmers will switch planting into soybeans. In short, it appears that global supplies are shrinking. As this report is being compiled on November 30, March corn is trading 8.25 lower. As we said in yesterday’s report, corn can pull back to $7.43, and we think possibly to $7.39. However, we are detecting a firmer undertone in corn. On November 28, March corn generated in intermediate term buy signal, but has not yet generated a short-term buy signal, which would be confirmation to trade corn from the long side.

Wheat:

March wheat lost 5.75 cents on heavy volume of 126,897 contracts. Open interest increased on the decline by 4,913 contracts, which in relation to volume is approximately 50% greater than average, meaning that new shorts and longs were heavily entering the market and the shorts were in control. This is the 2nd day in a row that price and open interest action has been acting in a bearish congruent fashion. As this report is being compiled on November 30, March wheat is trading 21.75 cents lower. Stand aside.

Crude oil:

January crude oil gained $1.58 on volume of 532,550 contracts. Open interest declined by 7,756 contracts, which in relation to volume is approximately 35% less than average. For the past 4 trading sessions, crude oil has been acting in a bearish congruent fashion, with open interest increasing on price declines and declining on price advances. Stand aside.

Heating oil:

January heating oil gained 3.60 cents on volume of 122,725 contracts. November 29 was the 8th day in a row that price and open interest action has been acting in a bullish congruent fashion meaning that open interest declines when price declines, and increases when prices advance. We will discuss heating oil in greater detail in the upcoming Weekend Wrap.

Natural gas:

January natural gas lost 15.3 cents on volume of 365,002 contracts. It is interesting to note that volume on November 29 increased by only approximately 4,600 contracts from November 28 when January natural gas declined by 9.1 cents. In other words, prices declined to the lowest level since November 12, but volume didn’t increase very much on yesterday’s decline. On November 29, open interest increased by a whopping 21,580 contracts, which in relation to volume is approximately 130% above average, meaning that new shorts and longs were heavily entering the market, but shorts were clearly in control. As this report is being compiled on November 30, January natural gas is trading 9.6 cents lower. Stand aside.

Gold:

February gold advanced $10.70 on fairly heavy volume of 251,574 contracts. Open interest declined by 2,391 contracts, which in relation to volume is approximately 50% less than average, meaning that liquidation was fairly light. Gold’s high on November 29 was 1731.20, and the high on November 30 is 1733.70. In other words, there was no follow through on yesterday’s advance. After making its high of 1755 on November 23, the market fell to a low of 1705.50 on November 28 and has not been able to mount a rally up to the old highs. It appears the market has more work to do at the lower end of its trading range before it is able to move significantly higher. As this report is being compiled on November 30, February gold is trading 16.60 lower, and has made a low of 1710.80. Stand aside.

Silver:

March silver gained 66.1 cents on respectable volume of 78,043 contracts. Contrary to gold, open interest in silver increased by 1,544 contracts, which in relation to volume is approximately 10% below average. On November 29, gold settled at $34.431, after making its high for the move at 34.49. It is important to note that there was no follow through during the November 30 session to take out the high of 34.49. Additionally, silver was unable to move above its November 29 closing price of 34.431 and  thus far, the high on November 30 is 34.425. As this report is being compiled on November 30, silver is trading $1.011 lower. Although the grain markets are lower, equities are trading only slightly lower. It will be important to see what open interest does on November 30 considering the magnitude of the decline, although volume is extremely light. 32.90 was the low on November 28 and this should be used as an exit point in the event it is violated. Risk management is very important, and with the way silver is trading clients must be especially cautious. Despite the move lower on November 30, silver will not generate a short and/or intermediate term sell signal.

Australian dollar:

The Australian dollar declined by 41 points on volume of 104,402 contracts. Open interest declined by 25 contracts. Stand aside.

Euro:

The December euro advanced 42 points on volume of 250,133 contracts. Open interest declined by 1,093 contracts, which in relation to volume is approximately 75% less than average. As this report is being compiled on November 30, the December euro has made a high for the move at 1.3031, which took out the high made on October 31 of 1.3027. The euro continues grind higher, but as open interest indicates market participants are not climbing on board. Stand aside.

S&P 500 E mini:

The S&P 500 E mini advanced 8.75 points on volume of 1,886,389 contracts. Open interest increased by 10,081 contracts, which in relation to volume 65% less than average, meaning that the increase was tepid at best. This is the first time since November 21 that open interest  increased on a price advance. This may be due to the E mini making a new high for the move at 1418.50 on November 29, which is the highest price for the December E mini since November 7, when the high for the day was 1431.75. It now appears there is a intransigence on both sides with respect to the fiscal cliff issue, which means the E mini could sharply decline at any moment due to negative comments made by either side. At the very least, it does not appear this issue is going to be resolved in the next week. As a result, being long any commodity carries its own set of hazards due to the power of this narrative.