Soybeans:

January soybeans lost 11.25 cents on very light volume 127,712 contracts. Total open interest declined by 1,364 contracts, which in relation to volume is approximately 50% below average. The November through March contracts lost 2,776 contracts of open interest. The USDA released its supply and demand report, and it is bearish.

For example, the average estimate for yield on the report was 38.2 bushels per acre and it came out above expectations at 39.3 bushels per acre. Additionally, total crop production had been estimated by the trade at 2.891 billion bushels but the USDA said production is 2.971 billion bushels. Total production in the October report was 2.860 billion bushels, and was raised by 111 million bushels in the November report. The carryout was raised to 140 million bushels, which is up from 130 million in the October report. Exports were raised by 80 million bushels, and total use increased by 101 million bushels. We will be discussing the report in greater detail in the upcoming Weekend Wrap. As we suggested yesterday, positions should have been liquidated, and if clients continue to hold long positions, they should be liquidated today. Stand aside.

Soybean meal:

December soybean meal lost $6.60 on volume of 61,347 contracts. Total open interest declined by 343 contracts, and the December contract lost 4,277 of open interest. Soybean meal is following soybeans lower. Production was raised by 450,000 tons, and exports were raised 400,000 tons. If positions were not liquidated yesterday, we advise clients to liquidate them today. Stand aside.

Corn:

December corn lost 3 cents on volume of 296,207 contracts. Open interest declined by 4,918 contracts, which in relation to volume is approximately 30% less than average. The USDA raised production by 19 million bushels and increased total supply by 45 million. Total use was raised 17 million, and ending stocks increased by 28 million bushels. The carryout for the end of the season in 2013 is estimated at 647 million bushels. This contrasts to the final carryout in 2011- 2012 of 988 million bushels. We will be discussing corn in greater detail in the upcoming Weekend Wrap. Stand aside.

Wheat: On November 8, December Chicago wheat generated a short and intermediate term buy signal.

December Chicago wheat advanced 8.50 cents on volume 228,238 contracts. Volume was the highest since May 21 when 246,134 contracts were traded and wheat closed at $7.29 1/4. Open interest increased by 6,321 contracts, which in relation to volume is approximately 5% above average. The major impact of the USDA report on wheat was that the world carryout for 2012-2013, which was raised from 173 million tons to 174.18 million tons versus expectations of 170. We will be discussing the world wheat supply situation in greater detail in the upcoming Weekend Wrap. As we indicated in yesterday’s report, when a buy or sell signal is generated, a short-term countertrend rally ensues, and that is the opportunity to implement a new position. In the case of wheat, there is been a massive speculative surge in price and open interest during the past two days. As a result, a pullback to the 870 area is likely. We want to watch how open interest interacts with price on the pullback. As this report is being compiled on November 9, December wheat is trading 13.75 lower after making a new high for the move at $9.16 1/2. Stand aside and wait for a further pullback.

Crude oil:

December crude oil gained 65 cents on volume of 576,821 contracts. Open interest increased by 9,195 contracts, which in relation to volume is approximately 30% less than average. Stand aside.

Heating oil:

December heating oil lost .0067 on light volume of 124,295 contracts. Open interest declined by 1,567 contracts, which in relation to volume is approximately 40% less than average. Stand aside.

Gasoline:

December gasoline gained 1.84 cents on volume of 116,924 contracts. Open interest increased by 3,362, which in relation to volume is approximately 5% above average. As this report is being compiled on November 9, December gasoline is trading 7.26 cents higher. Stand aside.

Copper:

December copper gained 2.80 cents on volume of 74,748 contracts. Open interest declined by a massive 6,377 contracts, which in relation to volume is approximately 225% above average, meaning that liquidation was extremely heavy on the price advance. This is very bearish. Stand aside.

Gold:

December gold gained $12.00 on volume of 197,052 contracts. Open interest increased by 2,264 contracts, which in relation to volume is approximately 50% less than average. During the past 3 days, gold has advanced $42.80 and open interest has increased by 10,713 contracts, which in relation to the total 3 day total volume is approximately 30% less than average. This means there was tepid interest by market participants. Gold seems to be trapped between its 50 day moving average of 1739 and its 200 day moving average of $1666. Stand aside.

Silver:

December silver gained 57.9 cents on volume 57,559 contracts. Open interest increased by a whopping 3,809 contracts, which in relation to volume is 160% above average. It is interesting to note that open interest in silver increased by 1,545 contracts more than gold on November 9, despite gold trading over 3 times the amount of volume. During the past 3 days, December silver has advanced $1.112 while open interest has increased by 4,209 contracts. In relation to 3 days volume, the open interest increase of 4,209 is approximately 5% below average, but a decent number nonetheless, especially when compared to gold over the same 3 day period. Stand aside.

Euro:

The December euro lost 21 points on 298,133 contracts. Open interest increased by 3,179 contracts, which in relation to volume is approximately 50% less than average. As this report is being compiled on November 9, the euro is down 36 points and has made a new low for the move at 1.2693, which is the lowest level for the euro since September 7. On November 5, the December euro generated a short-term sell signal, but as of November 9 has not generated in intermediate term sell signal. Stand aside.

S&P 500 E mini:

The S&P 500 E mini lost 13.75 points on relatively heavy volume of 2,619,500 contracts. Open interest increased on the decline by 23,991 contracts, which in relation to volume is approximately 60% below average. On November 8, the cash S&P 500 closed below its 200 day moving average, and the high of the day for the cash Dow Jones Industrial Average was below the 200 day average. We will be discussing the market in greater detail regarding the rest of 2012 in the Weekend Wrap. Maintain long puts.