On September 12 the USDA will release its monthly supply and demand report. Also, the German Supreme Court will issue its ruling on the legality of the German bailout program.

Soybeans:

November soybeans closed 17.75 cents lower on extremely light volume of 123,157 contracts. Volume declined by approximately 33,000 contracts from September 7, when soybeans declined by 10.50 and open interest increased by 1,107 contracts. On September 10, open interest declined by a massive 4,323 contracts, which in relation to volume is approximately 15% above average. The open interest decline occurred in the months from September 2012 through May 2013. It was surprising to see a large decline and not see volume pickup. The market made a new low for the move at $17.16 and as this report is being compiled on September 11, November soybeans are down 10.75 cents and the low for the day is $17.02 1/2, which is getting closer to the 50 day moving average of $16.81 on the continuation chart. September 10 was the fifth consecutive day in which the high of the day was lower than the previous day. If not long from significantly lower levels, stand aside. Do not enter new positions prior to the report.

Soybean meal:

October soybean meal lost $6.20 on volume of 45,884 contracts. Volume declined by approximately 12,000 contracts from September 7 when soybean meal lost $1.10 and open interest declined by 2,356 contracts. On September 10, open interest declined by a massive 4,331 contracts, which in relation to volume is approximately 325% above average. The September through December contracts accounted for the bulk of the open interest decline. September 10 was the sixth day in a row that open interest declined and now totals 19,112 contracts, while soybean meal has declined by a total of $17.40 in this period. As we have said before, it isn’t the open interest decline that is concerning, but the size of the decline. Do not enter new positions prior to the report.

Corn: It is likely that a short-term sell signal will be generated on September 11.

December corn declined by 16.25 cents on heavier than normal volume of 264,448 contracts. Volume was the highest since August 29, when 265,654 contracts were traded, and corn advanced by 18.00 cents, while open interest declined by 11,524 contracts. On September 10, open interest increased by 687 contracts. The open interest increase was due to buying in March 2013 forward contracts. The December contract lost 3,307 of open interest, so there was liquidation in the month with the largest open interest. Do not enter new positions prior to the report.

Wheat:

December wheat lost 15.25 cents on volume of 71,966 contracts. Volume declined by approximately 7,000 contracts from September 7, when wheat gained 13.25 and open interest increased by 5,483 contracts. On September 10, open interest increased by 326 contracts, which was a result of buying in the March 2013 forward contracts. The December contract lost 1,822 contracts of open interest. It is positive to see that volume declined with price on September 10 and that on September 7, volume increased when wheat prices advanced. Do not enter new positions prior to the report.

Crude oil:

October crude oil gained 12.00 cents on volume of 493,096 contracts. Volume declined by approximately 67,000 contracts from September 7 when crude oil gained 89.00 cents and open interest increased by 10,688 contracts. On September 10, open interest declined by 8,165 contracts, which was the first decline of open interest since August 30, when crude oil declined by 87.00 cents on volume of 400,126 contracts and open interest declined by 5,339 contracts. Crude oil continues to look sluggish, and as this report is being composed on September 11, crude oil is trading 24.00 cents higher. However, the dollar is sharply lower and this should have sharply boosted the price of crude oil, if it were inclined to move higher. Stand aside.

Heating oil:

October heating oil gained 1.79 cents on volume of 132,948 contracts. Open interest increased by 4,572 contracts, which in relation to volume is approximately 15% above average. During the past eight trading sessions since August 29, open interest has advanced a total of 28,084 contracts, while October heating oil gained 3.20 cents. Stand aside.

Gasoline:

October gasoline gained .0044 cents on volume of 140,091 contracts. Open interest increased by 3,637 contracts, which in relation to volume is average. Stand aside.

Copper:

December copper gained 4.35 cents on volume of 66,651 contracts. Volume declined by approximately 16,000 contracts from September 7, when copper advanced 12.85 cents and open interest increased by 3,414 contracts. On September 10, copper made a new high for the move at $3.7000 and open interest increased by 2,556 contracts, which in relation to volume is approximately 20% above average. The market is massively overbought and has been advancing due to the Chinese stimulus program of approximately $156 billion. Do not enter long positions at current levels.

Gold:

December gold declined by $8.70 on very light volume of 120,235 contracts. Volume declined by approximately 112,000 contracts from September 7, when gold advanced $34.90 and open interest increased by 8,396 contracts. On September 10, open interest declined by 176 contracts. The market is overbought. Do not enter new long positions current levels.

Silver:

December silver declined by 5.7 cents on light volume of 49,811 contracts. Volume declined approximately 15,000 contracts from September 7, when silver advanced $1.01.6 and open interest increased by 876 contracts. On September 10, open interest increased by 349 contracts. The market is massively overbought. Do not enter new long positions at current levels.

Euro: 

The September Euro declined by 28 points on light volume of 231,597 contracts. Open interest advanced by 6,867 contracts, which in relation to volume is average. We have been warning for some time about a move higher in the Euro and have advised speculators to stand aside. As this report is being compiled on September 11, the September Euro is trading 90 points higher and has made a new high for the move at 1.2872. As indicated in past reports, there is a short squeeze in the Euro and so far, the shorts are not taking the rally seriously. Do not enter short positions.

S&P 500 E mini:

The September S&P 500 E mini lost 11.75 points on very light volume of 1,175,709 contracts. Open interest advanced by a massive 46,585 contracts, which in relation to volume is is 40% above average. The massive increase of open interest on the decline clearly shows the shorts were in control on September 10. It would have been a far better omen for the bulls if open interest had declined by 46,585 contracts. This is especially the case, since there was a fairly large build of open interest during the past couple of weeks. We continue to suggest long put protection, and recommend that readers review the September 9 Weekend Wrap about the S&P 500 E mini.