Soybeans:

November soybeans advanced 27.25 and January gained 29.50 cents on heavy volume of 263,316 contracts. Volume was the highest since October 28 when 311,737 contracts were traded and open interest declined by 31,176 contracts while January soybeans lost 25.50 cents. On November 8, open interest increased by a tepid 3,265 contracts, which relative to volume is approximately 45% less than average. The November contract accounted for loss of 809 of open interest. The  below average increase of open interest relative to volume underscores the lack of interest for soybeans on the long side. As this report is being compiled on November 11, January beans are trading 0.50 cents higher and have made a low of 12.88 1/4. Although beans can continue to rally, we suspect this will be met by new short selling. Soybeans have a distinct tendency to rally in the 4th quarter. January soybeans remain on a short and intermediate term sell signal. Stand aside.

Soybean meal:

December soybean meal advanced $18.50 on total volume of 122,814 contracts. Volume was the highest since September 12 when 125,136 contracts were traded and December soybean meal closed at $447.20. On November 8, total open interest declined by 508 contracts, which relative to volume is approximately 75% below average. The December contract accounted for loss of 6,204 of open interest. The decline of total open interest underscores the lack of enthusiasm for the long side of soybean meal. As this report is being compiled on November 11, December soybean meal is trading $1.70 lower. From a seasonal standpoint, soybean meal has a tendency to rally in the 4th quarter, but at this juncture with soybean meal on a short-term sell signal, we advise a stand aside posture.

Corn:

December corn advanced 6.25 cents on huge volume of 685,923 contracts. Volume on Friday took out the high volume for the past year of 595,400 contracts traded on April 1 when December corn closed at $5.35 1/2. On November 8, open interest increased by 22,918 contracts, which relative to volume is approximately 30% above average. The December contract lost 20,672 of open interest, which makes the total open interest increase much more impressive. We consider the open interest increase on Friday to be bullish because the overwhelming amount of volume occurred after the release of USDA report and corn was trading in positive territory for the rest of the session. In the November 10 Weekend Wrap, we wrote in detail why we thought corn prices were headed higher, and as this report is being compiled on November 11, December corn is trading 9.75 cents higher and has made a daily high of $4.371/4. There are huge numbers of shorts in the market in the categories of commercial, managed money and other reportables. We think corn is is going to be a terrific short sale once a hefty number of speculative shorts are run out of the market. We been warning clients to avoid the short side of the market and wait for a rally before contemplating bearish positions. Stand aside.

Wheat:

December Chicago wheat lost 3.25 cents on very heavy volume of 166,958 contracts. Volume was the highest since August 9 when 183,614 contracts were traded and December Chicago wheat closed at $6.471/4. On November 8, total open interest increased by a massive 10,641 contracts, which relative to volume is approximately 145% above average, meaning that new short sellers were entering the market aggressively and driving prices lower. December Chicago wheat made a new low for the move at $6.44, which is the lowest price since September 18 when December wheat made a low of $6.42. Market participants have gotten extremely bearish on Chicago wheat during the past couple of weeks and the short to long ratio confirms this. It appears that December Chicago wheat is headed to the mid-630 level, and  a stand aside posture is recommended. December Chicago wheat remains on a short and intermediate term sell signal.

December Kansas City wheat lost 4.00 cents on huge volume of 41,178 contracts. Volume was the highest since August 8 when 50,355 contracts were traded and December Kansas City wheat closed at $7.06 3/4. On November 8, total open interest declined by 700 contracts, which relative to volume is approximately 25% below average. The December contract accounted for loss of 5,722 of open interest, and there was sufficient open interest increases in the forward months to bring total open interest down to a below average number. The next area support for KC wheat is at the mid-680 level. KC wheat remains on a short and intermediate term sell signal. Stand aside.

Cotton: This will be our last report on cotton until we see a trading opportunity. We have advised clients to liquidate bearish positions, including the short position recommended on October 18. Cotton remains on a short and intermediate term sell signal.

December cotton gained 12 points on heavy volume of 41,849 contracts. Volume was the highest since August 21 when 51,773 contracts were traded. On November 8, total open interest declined by a massive 12,450 contracts, which relative to total volume is approximately 825% above average. The December contract lost 16,994 of open interest, which is  due to the approach of 1st notice day for the December contract. Cotton has a seasonal tendency to rally in the 4th quarter, and we think the bearish side of the trade has been played out for now. Stand aside.

Live cattle:

December live cattle advanced 72.5 points on volume of 57,286 contracts. Total open interest declined by 144 contracts, which is minuscule and dramatically below average. The December contract accounted for loss of 54,098 of open interest, and there was not sufficient increases of open interest in the forward months to bring the total open interest figure to a positive number. We consider this to be bearish open interest action relative to the price advance. As this report is being compiled on November 11, December cattle is trading 22 points higher. Cattle remains on a short and intermediate term buy signal, but we recommend a stand aside posture at this juncture. See the November 10 Weekend Wrap for more information on cattle.

Crude Oil:

December crude oil advanced 40 cents on volume of 480,972 contracts. Total open interest declined 6,037 contracts, which relative to volume is approximately 45% less than average. The December contract accounted for loss of 23,981 of open interest. In the November 10 Weekend Wrap, we discussed the relatively low long to short ratio of crude oil. Although, crude can move lower from here, we would prefer to wait for a rally to the 20 day and 200 day moving averages of $97.72 and 97.45 respectively before considering bearish positions.

Natural gas:

December natural gas advanced 4 cents on light volume of 221,213 contracts. Total open interest declined by 1,332 contracts, which relative to volume is approximately 65% below average. The December contract accounted for loss of 8,693 of open interest. Although managed money has increased their bearish positions considerably in the latest COT report (long ratio of 1.30:1 up from the previous week of 1.08:1), the fact remains natural gas is currently trading at its long-term area of value. For example, the 50 week moving average on the continuation chart is $3.66 and the 200 week is 3.73. The 50 day moving average on the continuation chart is 3.63 and the 200 day is 3.71. In short, we see no reason to be involved in natural gas at this juncture. Natural gas remains on a short and intermediate term sell signal.

Platinum:

January platinum lost $13.90 on volume of 11,810 contracts. Total open interest increased by 602 contracts, which relative to volume is approximately 100% above average. The substantial increase in open interest on the decline is negative. In the reports of last week, we recommended that clients maintain stops near their entry points because of our concern about a rally in the dollar and that gold and silver are on short and intermediate term sell signals. The stratospheric long to short ratio of 9.67:1 in the most recent COT report, which is up from 5.54:1 from the previous week, tells us more liquidation is ahead. If bullish positions have not been closed, we suggest doing so immediately. As this report is being compiled on November 11, January platinum is trading $10.50 lower and has made a new low for the move at $1425.30. Platinum remains on a short and intermediate term buy signal.

Yen: It is a certainty that the December Japanese yen will generate an intermediate term sell signal on November 11.

Euro:

The December euro lost 72 points on volume of 260,743 contracts. Total open interest declined by 5,416 contracts, which relative to volume is approximately 20% less than average. As this report is being compiled on November 11, the December euro is trading 55 points higher on low volume. We think the euro could rally to the 1.3484-1.3509, which is the 50 day moving average before resuming its downtrend. Clients should be positioning themselves on the bearish side of the market. According to the COT report which was released on November 8, managed money is becoming disillusioned with the long side of the euro and the long to short ratio dropped to 1.98:1 on November 5 (the tabulation date) from 3.04:1 on October 29. During this period, the euro fell 2.3 cents or 1.68%. Year to date, the December euro is trading 1.1 cent higher or + 0.82%. The euro remains on a short-term sell signal, but an intermediate term buy signal.

 Australian dollar:

The December Australian dollar lost 83 points on heavy volume of 118,399 contracts. Volume is approximately 1,500 contracts above trading on November 7 when the December Australian dollar lost 72 points and open interest increased by 4,275 contracts. On November 8, open interest increased for the 2nd day by 2,989 contracts, which relative to volume is approximately average. Price and open interest action continues to be bearish. The Australian dollar is on a short-term sell signal, however, it has not generated an intermediate term sell signal.

S&P 500 E mini:

The S&P 500 E mini advanced 20.75 points on higher than normal volume of 2,078,393 contracts. Open interest increased by a minuscule 2,523 contracts, which is dramatically below average. We continue to see a pattern of bearish open interest behavior relative to price advances/declines.For example the open interest action relative to price on November 8 was bearish and shows that market participants are not willing to enter new positions as the market is rallying. On November 7, the E mini declined by 20.25 points and open interest increased on the decline by 15,547 contracts. Again this is bearish open interest action relative to the price decline. On November 6, the E mini advanced 9.00 points, but open interest declined by 887 contracts, which again is bearish open interest action relative to the price advance. On November 5, the E mini declined by 6.50 points and open interest increased by 14,633 contracts, which is bearish. Although price action may look favorable, the reality is market participants are holding back initiating new positions on rallies and are quick to enter new short positions on declines. We continue to advise long put protection for those clients who hold long equity positions.