Soybeans:

January soybeans advanced 28 cents on heavy volume of 243,254 contracts. Volume was the highest since November 8 when 263,316 contracts were traded and January beans closed at $12.96. On November 22, total open interest increased by 11,825 contracts, which relative to volume is approximately 100% above average, meaning that new longs were aggressively entering the market and pushing prices significantly higher. The action on November 22 was in major contrast to that of November 21 when January soybeans advanced 17.75 cents and total open interest declined by 2,117 contracts. On November 21, the January contract lost 10,801 of open interest, but on November 22 open interest increased by 5,942. January soybeans will likely generate a short-term buy signal on November 25, which reverses the short-term sell signal generated on November 19. January soybeans remain on an intermediate term buy signal. Another positive factor is the January 2014-March 2014 bean spread, which made a low at 9.50 premium to January on November 20, and as this report is being compiled on November 25 is trading at 15 cents premium to January. As soybeans move higher, January is getting stronger relative to the back months, which bodes well for future price advances. At this juncture, soybeans should be traded from the long side only.

Soybean meal:

December soybean meal advanced $16.80 and January gained 15.50 on very heavy total volume of 170,480 contracts. Volume traded on November 22 was the highest of 2013. On November 22, total open interest increased by 1658 contracts, which relative to volume is approximately 50% below average. The December contract accounted for loss of 15,650 of open interest. Although the volume was a record breaker for 2013, total open interest was a disappointment, but 1st notice day for the December contract is this week, which is a mitigating factor. Soybean meal must make a decisive break above $422.00 for it to continue moving higher. January soybean meal will definitely generate a short-term buy signal on November 25, which reverses the short-term sell signal generated on November 19. January soybean meal remains on an intermediate term buy signal. Soybean meal should only be traded from the long side at this juncture.

Corn:

March corn lost 0.25 cents on total volume of 400,187 contracts. Total open interest declined by 80,131 contracts, which is due to December corn approaching 1st notice day this week. The December contract accounted for loss of 100,858 contracts. As this report is being compiled on November 25, March corn is trading 1.75 cents higher. We continue to advise a stand aside posture and corn remains on a short and intermediate term sell signal.

Wheat:

December Chicago wheat advanced 2.25 cents on volume of 111,408 contracts. Total open interest declined by 11,276 contracts, which is due to the approach of 1st notice day for the December contract. The December contract lost 23,679 of open interest. As we said in the November 24 Weekend Wrap, we think Chicago wheat is near a bottom, if it has not already been made. Do not short Chicago wheat. Chicago wheat remains on a short and intermediate term sell signal.

December Kansas City wheat advanced 6.25 cents on relatively heavy volume of 28,563 contracts. Volume was the highest since November 14 when 32,413 contracts were traded and total open interest increased by 827 contracts while the December contract lost 4,428 of open interest and March KC wheat advanced 1.00 cents. On November 22, total open interest increased by 1,131 contracts, which relative to volume is approximately 55% above average meaning that new longs were entering the market aggressively and driving prices higher. The December contract lost 3,256 of open interest, which makes the total open interest increase much more impressive. Note the difference in the behavior of open interest in KC versus Chicago wheat. As this report is being compiled on November 25, March KC wheat is trading 1.25 cents lower and March Chicago is +2.50. March Kansas City wheat remains on a short and intermediate term sell signal. We think it is highly likely that Chicago wheat will lead KC wheat higher, at least in the initial stage. Managed money is significantly net short in Chicago whereas they are comfortably long in KC wheat.

Live cattle:

February live cattle gained 2.5 points on very low volume of 34,450 contracts. Total open interest declined by 1,071 contracts, which relative to volume is approximately 20% above average. The December contract accounted for loss of 2,466 of open interest. As we mentioned in the November 24 Weekend Wrap, the long to short ratio remains stratospheric, and we see more liquidation ahead after which, we believe the bull market will resume. February cattle remain on a short and intermediate term sell signal. Stand aside.

WTI crude oil:

January WTI lost 60 cents on volume of 507,901 contracts. Total open interest declined by 3,856 contracts, which relative to volume is approximately 65% below average. The January contract lost 7,407 of open interest. January crude oil remains on a short and intermediate term sell signal. January WTI made a low of 93.08, but this did not occur until 8:00 AM CST, and the market has been rallying ever since. We think there is a major possibility that January WTI is trading at its lows, and will continue to rally in the coming days. 

Brent crude oil:

January Brent crude oil advanced 97 cents on volume of 659,772 contracts. Total open interest increased by 16,498 contracts, which relative to volume is average. For the past 2 days, Brent crude has advanced $2.99 and open interest has increased by a total of 28,330 contracts. Although open interest increases are positive when accompanied by price advances, the fact remains these are not impressive  and volume continues to lag. In short, despite the move higher in Brent, it does not appear that there are many believers about a continued advance. This mindset may be fed by the poor performance of WTI. January Brent made its low of $108.05 at approximately 12:30 AM CST November 25, and has been rallying ever since. Brent remains on a short and intermediate term buy signal.

Heating oil: Heating oil will not generate an intermediate term buy signal on November 25. A short-term buy signal was generated on November 21.

Natural gas: It appears likely that January natural gas will generate a short-term buy signal on November 25. We will commence coverage on natural gas beginning with this report.

January natural gas advanced 7.1 cents on volume of 287,020 contracts. Total open interest increased by 8,764 contracts, which relative to volume is approximately 20% above average meaning that new longs were entering the market at a more aggressive pace than usual and driving prices higher. The December contract lost 5,410 of open interest and January 5,408, which makes the total open interest increase much more impressive (bullish). As this report is being compiled on November 25, January natural gas is trading 4 cents higher and has made a new high for the move at $3.893, which is the highest price for January natural gas since it reached 3.909 on October 25. 

Euro:

The December euro advanced 90 points on very light volume of 153,059 contracts. Volume declined from the 231,812 contracts traded on November 21 when the December euro advanced 41 points and total open interest declined by 1,820 contracts. On November 22, open interest declined again and this time by 1,030 contracts, which relative to volume is approximately 65% below average. However, for the past 2 sessions beginning on November 21 the euro has advanced 1.31 cents and open interest declined each day totaling 2850. The euro made a high for the move at 1.3560 on November 22 and this is the high on November 25. In past reports we have suggested writing out of the money calls or buying puts, or as an alternative to initiate bullish positions in the dollar index. We continue to like these trades.

British pound: On November 22, the December British pound generated a short term buy signal and remains on an intermediate term buy signal.

The December British pound advanced 44 points on volume of 71,080 contracts. Total open interest increased by 2,779 contracts, which relative to volume is approximately 55% above average meaning that new longs were aggressively entering the market and pushing the pound to a new high for the move at 1.6224. As this report is being compiled on November 25, the pound has made another new high at 1.6238, but is trading 63 points lower on the day. We continue to like the long side of GBP/EUR.

Australian dollar: The December Australian dollar generated an intermediate term sell signal on November 22. We will not report on the Australian dollar until we see a trading opportunity.

S&P 500 E mini:

The December S&P 500 E mini gained 7.50 points on low volume of 1,254,720 contracts. Total open interest declined by 16,179 contracts, which relative to volume is approximately 45% below average. As this report is being compiled on November 25, the December S&P 500 E mini has made a new high for the move at 1809.25 and is trading 3.75 points higher. We think the key day to watch is December 6, which is the day the employment report will be released. If it is a fairly positive report, we expect to see interest rates on the 10 year note continue to climb and depending upon the strength of the report, a correction to begin, which is long overdue. We advise long put protection for those clients who hold long equity positions.