Soybeans:

November soybeans advanced 15.75 cents and January gained 11.50 on total volume of 178,307 contracts. Total open interest increased by 3,408 contracts, which relative to volume is approximately 20% less than average. The November contract lost 1,229 of open interest. As this report is being compiled on November 8, approximately 8 min. after the release of USDA reports, November soybeans are trading 9.75 cents higher while January is ahead 9.25. Soybeans remain on a short and intermediate term sell signal. Stand aside.

Soybean meal:

December soybean meal advanced $7.00 on heavy volume of 108,853 contracts. Volume was the highest since September 12 when 125,136 contracts were traded and December soybean meal advanced $19.20. On November 7, total open interest increased by a substantial 5,402 contracts, which relative to volume is approximately 100% above average meaning that new longs were aggressively entering the market and pushing prices higher. The December contract lost 2,915 of open interest, which makes the total open interest increase much more impressive (bullish). As this report is being compiled on November 8, 15 minutes after the release of USDA reports, December soybean meal is trading $8.40 higher or + 2.23% and is dramatically outperforming soybeans, which has advanced 0.85%. Despite the sharp move higher on November 8, soybean meal will not generate a short-term buy signal, which would reverse the short-term sell signal generated on October 31. Stand aside.

Corn:

December corn lost 0.75 cents on huge volume of 473,783 contracts. Volume was the highest since April 1, 2013 when 595,940 contracts were traded and December corn closed at $5.35 1/2. On November 7, total open interest increased by 13,930 contracts, which relative to volume is approximately 20% above average meaning that new short sellers were entering the market at a pace that was above average. The December contract lost 26,538 of open interest, which makes the total open interest increase much more impressive (bearish). However, when there is a massive increase of open interest accompanied by very heavy volume near the bottom of the range, it may be a sign that corn is close to reaching a temporary bottom. Bolstering this thesis is the trading activity after the release of USDA reports on November 8 in which December corn is trading 2.75 cents higher after making a new low for the move of $4.15 1/2. As we have been saying for a number of reports, we think the short side of the market has been played out and there are huge numbers of speculative shorts that may have to cover their positions at higher prices. Stand aside.

Wheat:

December Chicago wheat lost 0.25 cents on heavy total volume of 140,324 contracts. Volume was higher than the 138,402 contracts traded on October 31 when December Chicago wheat lost 7.50 cents and total open interest declined 5,939 contracts. On November 7, total open interest increased by 6,248 contracts, which relative to volume is approximately 75% above average meaning that new short sellers were aggressively entering the market and driving prices fractionally lower. The December contract loss 759 of open interest, which makes the total open interest increase more impressive.

December Kansas City wheat lost 4.50 cents on extremely heavy volume of 31,966 contracts. Volume was the highest since October 1 when 36,089 contracts were traded and December KC wheat closed at $7.45. On November 7, total open interest increased 328 contracts, which relative to volume is approximately 50% below average. The December contract lost 3,530 of open interest, which makes the total open interest increase much more impressive. This was the first time that KC wheat had an open interest increase when prices declined. Since October 24, there has been only one day that Kansas City wheat had a positive close (October 29).

On November 8, as this report is being compiled 50 minutes after the release of USDA reports, December Chicago wheat is trading 0.75 cents lower and has made a new low for the move the $6.44. December KC wheat is trading 5.75 cents lower and has made a new low for the move at $7.0 3 1/2. On November 1, December Chicago wheat generated a short and intermediate term sell signal. On November 1 December KC wheat generated a short-term sell signal and on November 6 generated an intermediate term sell signal. Stand aside.

Cotton:

December cotton lost 31 points on volume of 32,390 contracts. Total open interest declined by 763 contracts, which relative to volume is approximately 5% below average. As this report is being compiled on November 8 after the release of the USDA reports, cotton is trading 31 points higher and has made a high of 77.88. As we mentioned before, cotton has a seasonal tendency to make its low in November and rally through the rest of the 4th quarter. We think the downside has been played out to a great extent and advise covering bearish positions and moving to the sidelines.

Live cattle:

December live cattle lost 35 points on volume of 62,919 contracts. Total open interest increased by 648 contracts, which relative to volume is approximately 50% below average. The December contract lost 7,383 of open interest, which makes the total open interest increase more impressive (bearish). On November 7, December cattle closed at 1.31675, which is the lowest close since September 26 of 1.31575. We continue to think the market is headed lower temporarily, and the heavy long position of manage money will add fuel to the downside move. This weekend, we will publish the COT stats, which will reflect trading activity as of November 5. Stand aside.

 Crude oil:

December crude oil lost 60 cents on volume of 553,399 contracts. Total open interest increased by 4,889 contracts, which relative to volume is approximately 60% below average. However, the December contract lost 17,211 of open interest, which makes the total open interest increase more impressive (bearish). It is important to note that this is the first total open interest increase we have seen on a price decline for the past couple of weeks. This is the first indication that market participants are beginning to get bearish on crude. It will be interesting to see what the long to short ratio is as of November 5, which may provide additional insight about the amount of selling pressure remaining in the market. Continue to hold short call positions recommended on September 29.

Natural gas:

December natural gas advanced 2.1 cents on heavy volume of 399,001 contracts. Volume was the highest since October 10 when 456,019 contracts were traded and December natural gas closed at $3.877. On November 7, total open interest declined by 3,825 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on November 8, December natural gas is trading 5.4 cents higher, but has not taken out the high of 3.622 made on November 7. Natural gas remains on a short and intermediate term sell signal. Stand aside.

 Platinum:

January platinum lost $10.60 on volume of 10,662 contracts. Total open interest increased by 115 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on November 8, January platinum is trading $14.30 lower and has made a new low for the move of 1437.50. Platinum is trading lower most likely due to the sharp increase in the dollar index and sharply higher interest rates for the 10 year note. We have been cautioning clients who were long platinum to have stops near their point of entry precisely because we were concerned about the continued rally in the dollar index, which is on a short-term buy signal. Though, January platinum remains on a short and intermediate term buy signal, we would exercise caution about entering new long positions because it appears the dollar index is likely to move higher and that the trend in interest rates is higher as well.

Euro:

The December euro lost 94 points on huge volume of 439,650 contracts. Volume was the highest since June 6 when 499,487 contracts were traded and the December euro closed at 1.3261. On November 7, total open interest declined by 9700 contracts, which relative to volume is approximately 10% below average. It will be interesting to see the degree to which managed money remains long when we examine the November 5 COT report, which will be released this afternoon. For those of you who wrote out of the money calls or purchased long puts, stay with these positions. However, for futures traders, we are looking for a spot to enter short positions that do not subject clients to excessive risk. On November 1, the December euro generated a short-term sell signal, and as of November 8 has not generated an intermediate term sell signal.

Australian dollar:

The December Australian dollar lost 72 points on heavy volume of 116,928 contracts. Volume was the highest since September 12 when 147,810 contracts were traded and the December Australian dollar closed at 92.11. On November 7, open interest increased by 4,275 contracts, which relative to volume is approximately 45% above average, meaning that new short sellers were aggressively entering the market and driving prices lower. The Australian dollar remains on a short-term sell signal, but an intermediate term buy signal. Stand aside.

S&P 500 E mini:

The S&P 500 E mini lost 20.25 points on heavy volume of 2,469,000 contracts. Volume was the highest since October 9 when 2,495,030 contracts were traded and the December E mini closed at 1648.75. As this report is being compiled on November 8, the E mini is trading 16.75 points higher, but volume trails that of November 7. Long put protection should be in place, and with the employment report showing large job gains, there likely will be increasing talk about tapering of bond buying by the Fed.