Soybeans:

November soybeans closed 0.50 cents lower on volume of 173,058 contracts. Open interest increased by 1,341 contracts. For the latest reporting week, export sales totaled 565,500 metric tons, and 561,400 metric tons were for the 2012-2013 season. Export sales for the 2012-2013 season is well over 50% and the crop hasn’t been harvested yet. Although this is a harbinger of incredible tightness in the coming year, especially until February-March of 2013, the past five sessions have registered a dismal performance. As this report is being compiled on September 7, November soybeans are trading 2.25 cents lower as the dollar index makes new lows for the move and precious metals and the petroleum complex is trading higher. A crop forecaster released their report for the estimated crop, and it hasn’t been able to move the market. Caution should be exercised at current levels.

Soybean meal:

October soybean meal closed $3.10 higher on volume of 67,625 contracts. Open interest declined by 555 contracts. This is the fourth day in a row that soybean meal open interest has declined and now totals 12,425 contracts. During this time, soybean meal has declined by $10.10. This is a massive open interest decline relative to price. Export sales for the recent reporting week were disappointing at 111,700 metric tons. This is the lowest export sales number in three or four months. Caution should be exercised at current levels.

Corn:

December corn advanced 7.75 cents on volume of 191,990 contracts. Volume increased approximately 6,000 contracts from September 5 when corn declined 14.25 and open interest declined by 7,773 contracts. On September 6, open interest declined by 3,362 contracts, which in relation to volume is approximately 50% below average. Export sales for the recent week were a disappointing 25,000 metric tons, which confirms that high prices are dramatically impacting sales of U.S. corn. Corn market action for the past several days has been dismal and longs are pinning their hopes on the upcoming September 12 USDA report. Chances are the anticipated crop report will show numbers that are already priced in the market. Caution is warranted at current levels.

Wheat:

December wheat advanced 24.00 cents on volume of 86,446 contracts. Volume jumped approximately 18,500 contracts from September 5 when wheat declined 21.00 cents and open interest declined by 3,063 contracts. On September 6 open interest declined by 899 contracts. Export sales totaled 573,400 metric tons, which is somewhat above expectations. The market has been choppy of late and as this report is being compiled, wheat is trading 17.00 cents higher while corn is only trading 4.00 cents higher. The wheat market looks to get stronger as the season progresses and the falling dollar will make U.S. wheat more competitive on the world market. We want to see more market action before recommending bullish positions.

Crude oil:

October crude oil gained 17.00 cents on heavy volume of 710,388 contracts. Volume was the highest since August 15 when 746,813 contracts were traded and crude oil closed at $94.33. On September 6, open interest increased by 27,361 contracts, which in relation to volume is approximately 40% above average. The market performance on September 6 was abysmal considering that all the major indices were sharply higher along with precious metals, and yet crude could not hold its gains after making a high of $97.71, then falling to a low of $94.59. From August 15 through September 6, open interest has increased by 92,854 contracts, but crude oil has only advanced 91.00 cents. We have been warning readers to stay away from crude oil because of its dismal price-performance relative to open interest action. As this report is being compiled on September 7, the dollar is sharply lower, precious metals are sharply higher, but crude oil is up only 46.00 cents trading at $96.01.

Heating oil:

October heating oil gained 2.49 cents on volume of 168,825 contracts. Volume increased approximately 46,000 contracts from September 5 when heating oil declined by 2.92 and open interest increased by 4,848 contracts. Also, volume was the highest since August 27 when 214,920 contracts were traded and heating oil closed at $3.1118. On September 6, open interest increased by 4,284 contracts, which in relation to volume is average. As this report is being written, heating oil is trading unchanged for the day.

Gasoline:

October gasoline closed 4.12 cents higher on volume of 148,964 contracts. Volume increased approximately 46,000 contracts from September 5 when gasoline declined by .0024 cents and open interest declined by 1,204 contracts. On September 6, open interest increased by 6,464 contracts, which in relation to volume is approximately 50% above average. Note that the volume in gasoline was approximately 20,000 contracts less than heating oil despite heating oil closing by a smaller amount than gasoline. As this report is being compiled, gasoline is trading 3.21 cents higher and has made a new high for the move at $3.0541.

Copper:

December copper lost 1.25 cents on volume of 59,756 contracts. Volume declined approximately 10,000 contracts from September 5 when copper gained 4.20 and open interest increased by 4,111 contracts. On September 6, open interest declined by 135 contracts. On August 23 copper generated a short-term buy signal, however as of September 7, copper has not generated in intermediate term buy signal. Conceivably this could occur on September 10. As we noted in our report on September 4, we changed our bias to the long side of copper. As this report is being written copper is trading 13.00 cents higher and has made a new high for the move at $3.6525.

Gold:

December gold closed $11.60 higher on volume of 194,939 contracts. Volume skyrocketed by approximately 81,000 contracts from September 5 when gold closed $2.00 lower and open interest declined by 394 contracts. On September 6, open interest increased by 4,598 contracts, which in relation to volume is slightly below average. We have been looking for a setback and unfortunately it has not occurred. As this report is being compiled on September 7 gold has advanced 35.50. The market remains massively overbought and speculators should not chase the rally.

Silver:

December silver closed 35.5 cents higher on volume of 58,321 contracts. Volume increased by approximately 24,000 contracts from September 5 when silver closed 8.2 cents lower and open interest declined by 219 contracts. On September 6, open interest increased by 110 contracts. As this report is being compiled, silver is trading $1.04 higher on a sharply lower dollar. As in the case of gold, silver has not had a major setback and is much more overbought than gold. Do not chase the rally because a setback will occur and when it does it could be a large one.

Euro:

The September Euro gained 47 points on heavy volume of 337,331 contracts. Volume was the highest since August 2 when 479,233 contracts were traded and the Euro closed at 1.2140. For three out of the four past trading sessions when the Euro has advanced, open interest increased as well. We have been warning for quite some time not to short the Euro, and on August 22, we notified readers that the Euro had generated a short-term buy signal. As this report is being compiled on September 7 the Euro is trading 1.45 cents higher and has made a new high for the move.

10 Year Treasury Note:

The December 10 year treasury note declined by 20 points on volume of 1,145,078 contracts. Open interest declined by a massive 35,002 contracts, which in relation to volume is average, but a large number nonetheless. During the past three days, open interest has declined by a massive 108,296 contracts. Although we would expect open interest to decline on pullbacks, the amount of the decline is somewhat surprising. As this report is being compiled, December notes are trading 10.5 points higher.

S&P 500 E mini:

The S&P 500 E mini gained 27.50 points on volume of 2,091,658 contracts. Although volume was heavier than usual, it barely surpassed the volume of 2,054,873 contracts traded on August 31 when the S&P 500 E mini closed 8.00 points higher. On September 6, open interest increased by a massive 59,397 contracts, which in relation to volume is average, but a large number nonetheless. We have been advocates of long put protection, which is a way to protect portfolios against a black swan event. We continue to like Apple Computer, but readers should make sure they have sell stop protection with limits.