Soybeans:

September soybeans lost 3 cents while the November contract lost 4.25 on total volume of 145,648 contracts. Total open interest declined by 2,391 contracts, which relative to volume is approximately 35% less than average. The September contract lost 3,790 of open interest and November lost 1,234. As this report is being compiled on August 30, the day before the three-day Labor Day holiday weekend, September beans are trading 8.75 cents lower while November is trading 18.00 lower. Both September and November soybeans remain on a short and intermediate term buy signal.

Soybean meal:

September soybean meal advanced $4.10 while the October contract gained $1.70 on total volume of 76,463 contracts. Total open interest declined by 2,651 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly substantial on the advance. The September contract accounted for loss of 4,552 of open interest. As this report is being compiled on August 30, September meal is trading $2.60 lower while October is trading -6.70. Soybean meal remains on a short and intermediate term buy signal.

Soybean oil:

December soybean oil lost 58 points on volume of 108,899 contracts. Total open interest declined 6,862 contracts, which relative to volume is approximately 160% above average, meaning that liquidation was extremely heavy. The September contract accounted for loss of 4,699 of open interest. As this report is being compiled on August 30, December soybean oil is trading 29 points lower and has made a low of 43.68, which is 10 points below yesterdays low. Soybean oil remains on a short-term buy signal, but an intermediate term sell signal.

Corn:

December corn advanced 0.75 cents on total volume of 218,559 contracts. Total open interest declined 7,051 contracts, which relative to volume is approximately 30% above average, meaning that liquidation was fairly substantial. The September contract accounted for loss of 17,542 of open interest. As this report is being compiled on August 30, December corn is trading 3.25 lower. Corn remains on a short and intermediate term sell signal.

Wheat:

December Chicago wheat lost 5.25 cents while KC lost 7.00. Volume traded in Chicago wheat totaled 75,474 contracts and open interest declined by 4,378 contracts, which relative to volume is approximately 140% above average, meaning that liquidation was heavy. As this report is being compiled on August 30, KC wheat is trading 0.75 cents higher while December Chicago is trading +1.75. Wheat remains on a short and intermediate term sell signal.

Cotton:

December cotton lost 51 points on volume of 18,307 contracts. Total open interest declined by 3622, which relative to volume is approximately 575% above average, meaning that liquidation was extremely heavy. On August 19 total open interest for all contracts 214,378 and as of August 29 total open interest stood at 178,700 contracts. This illustrates the total collapse of open interest ever since cotton topped out on August 19 at 93.54. As this report is being compiled on August 30, cotton is trading 55 points higher and has made a new low for the move at 82.43. Cotton remains on a short and intermediate term sell signal.

Live cattle:

October live cattle gained 5 points on volume of 36,240 contracts. Open interest increased by a hefty 1,334 contracts, which relative to volume is approximately 45% above average, meaning that new longs and shorts were aggressively entering the market, but they were unable to move prices beyond a fractionally higher close. As this report is being compiled on August 30, October cattle is trading 5 points higher. Live cattle remain on a short and intermediate term buy signal. Wait for more of a pull back.

Crude oil:

October crude oil lost $1.30 on volume of 513,845 contracts. Open interest increased 1,673 contracts, which relative to volume is minuscule and dramatically below average. As this report is being compiled on August 30, October crude is trading $1.14 lower and Brent is trading 80 cents to the downside. Additionally, October crude has made a new low for the move at $106.75. The market has been acting poorly for quite some time and the consistent dismal open interest stats relative to price advances/declines confirm it. Although we are bearish on crude oil,, we would not advocating bearish positions for 2 reasons: 1) It appears that an attack against Syria is imminent and 2) crude oil remains on a short and intermediate term buy signal.

Natural gas: On August 29, October natural gas generated a short-term buy signal, but remains on an intermediate term sell signal.

October natural gas advanced 3.6 cents on volume of 328,561 contracts. Total open interest declined 3,103 contracts, which relative to volume is approximately 50% less than average. The September and October contracts lost a total of 4,682 of open interest. The market should find support at $3.510, which was the low on August 29 and at 3.44. Natural gas should find resistance at the 200 day moving average of $3.68 and the 150 day moving average of $3.74. We advise clients to take advantage of any setback to initiate bullish positions. For futures traders, sell stops should be slightly below the August 29 low. We think options are great way to play the natural gas market, and at this juncture they are cheap.

Gold:

December gold lost $5.90 on volume of 165,017 contracts. Total open interest declined by 556 contracts, which relative to volume is minuscule and dramatically below average. As this report is being compiled on August 30, December gold is trading $14.90 lower and has made a new low for the move at 1391.80. As we have said before, gold has much work to do on the downside before market participants are convinced that gold is at the beginning of a new bull market. The market is likely to setback to at least $1353.00.

Silver:

December silver lost 29.9 cents on heavy volume of 91,293 contracts. Total open interest declined by 2,271 contracts, which relative to volume is average. As this report is being compiled on August 30, December silver is trading 52 cents lower and has made a new low for the move at $23.41. We think the market should find support at the August 20 low of $22.28.

From the August 28 report:

“Silver made a new high for the move at $25.16 on a major volume spike, which in conjunction with the decline of open interest indicates that silver has found a temporary top. Like gold, we think silver has much more work to do on the downside before bullish positions should be considered.”

Euro:

The September euro lost 96 points on volume of 235,891 contracts. Open interest increased by 3,322 contracts, which relative to volume is approximately 40% less than average. As this report is being compiled on August 30, the September euro is trading 30 points lower and has made a new low for the move at 1.3173. In our report of August 20, we advised clients to move to the sidelines after the euro made a new high for the move at 1.3454 and open interest spiked 12,178 contracts higher. The euro remains on a short and intermediate term buy signal.

S&P 500 E mini:

The September S&P 500 E mini advanced 4.50 points on volume of 1,751,598 contracts. Open interest declined by 15,733 contracts, which relative to volume is approximately 55% less than average. However, this is another example of negative open interest action relative to the price advance. We have been seeing a consistent pattern of open interest declines when prices advance and open interest increases when prices decline. The consistency of negative open interest action relative to price action is another factor that confirms the bearish condition of the market. As this report is being compiled on August 30, the E mini is trading 5.25 points lower and has made a low of 1626.00 on the day. Long put protection should already be in place.