Soybeans:

November soybeans gained 6.50 cents on volume of 201,779 contracts. Open interest declined by a massive 17,745 contracts, which in relation to volume is 250% above average, which means liquidation was extremely heavy. The November contract lost 22,773 of open interest, which accounted for the overall decline. As of the final report for October 30, there are 28,679 contracts remaining in the November contract. At this  juncture, selling pressure represented by the November contract is out of the way for the most part. This should set the stage for the move higher. Maintain long positions, but have sell stops in place.

Soybean meal:

December soybean meal gained $3.50 on volume of 51,110 contracts. Open interest increased by 251, which in relation to volume is 70% below average. On October 30, the long December 2012 short January or March 2013 spread widened, and the spread continues to widen on October 31. This is bullish. Note that the spread in the November soybean contract versus January and March is not widening. This is a testament to the underlying strength in soybean meal. On October 31, December soybean meal has made a new high for the move at $487.50. This is the highest price since September 28 when December meal reached $491.60 and closed at 486.90. Maintain long positions, but have sell stops in place.

Corn:

December corn gained 4.75 cents on volume of 195,789 contracts. Open interest declined on the advance by 5,172 contracts, which in relation to volume is average. The total decline of open interest in accounted for by the decline in the December contract of 20,242 contracts. In other words, as corn advanced, both longs and shorts were liquidating in the December contract. As this report is being compiled on October 31, corn is trading 13.25 cents higher. Stand aside.

Wheat:

December wheat lost 1.50 cents on heavy volume of 105,269 contracts. Open interest declined by 5,190 contracts, which in relation to volume is approximately 100% above average, meaning that liquidation was heavy. This is the 3rd day in a row when wheat has declined and open interest declined. From October 26 through October 30, open interest declined by 10,472 contracts while December wheat lost 16.25 cents. This kind of market action is healthy and it is not indicative of a bear market. The market made a new low for the move at $8.52 3/4, which is the lowest price for December wheat since October 17 when the market reached 8.45 1/2. We think there will be a terrific opportunity on the long side of wheat in the next month or two, but for now stand aside.

Crude oil:

December crude oil gained 14 cents on very light volume of 223,552 contracts. Open interest increased by 6,842, which in relation to volume is approximately 10% above average. We think it is best to stand aside and wait for crude oil to rally and if circumstances warrant it, re-enter short positions.

Heating oil:

December heating oil lost 1.76 cents on volume of 144,752 contracts. Open interest declined by 1,616, which in relation to volume is approximately 50% less than average. Stand aside.

Gasoline:

December gasoline lost 2.56 cents on volume of 121,225 contracts. Open interest increased by 560 contracts, which is approximately 75% less than average. Stand aside.

Copper:

December copper gained 1.15 cents on volume of 38,719 contracts. Open interest increased by a whopping 4,298 contracts, which in relation to volume is over 300% above average, meaning that there was very strong commitments by longs and shorts, and the longs were in control, but not by much. The massive increase in open interest did not move copper very much higher. Stand aside.

Gold:

December gold gained 20 cents on volume of 61,227 contracts. Open interest increased by 1,310 contracts, which in relation to volume is approximately 5% below average. We have suggested writing out of the money puts in gold for the December contract and still think this is a wise course of action. It is apparent that gold and silver have decoupled from the equities market. As this report is being compiled on October 31, December gold is trading $8.80 higher, and has reached a high of $1726.60, which is the highest price since October 23 when December gold made a high of 1731.20.

Silver:

December silver advanced 7.1 cents on volume of 16,569 contracts. Open interest increased by 736 contracts, which in relation to volume is 75% above average, which means that commitments were heavy, but this did not have a major positive impact on silver. Like gold, we think writing out of the money puts in the December contract makes sense, and this is a lower risk way of participating in silver’s advance. As this report is being written on October 31, silver is trading 47.9 cents higher and has made a high of $32.435, which is the highest price since October 23 when silver reached 32.50.

Euro:

The December euro gained 59 points on light volume of 120,357 contracts. Open interest increased by 491 contracts, which in relation to volume is approximately 75% less than average. Stand aside.

S&P 500 E mini:

The S&P 500 E mini closed unchanged on volume of 179,046 contracts. Open interest increased by 7465 contracts, which in relation to volume is approximately 65% above average. The market has become very distorted due to the problems with the storm on the eastern seaboard. It is likely the market won’t get back on its feet until next week. Maintain long puts.