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The USDA will release its World Agriculture Supply Demand report on December 10 at noon Eastern standard time.

Soybeans:

January soybeans advanced 25.50 on heavy volume of 259,369 contracts. Volume was the strongest since November 12 when soybeans lost 16.25 cents on volume of 316,644 contracts and total open interest declined by 4,622 contracts.On December 5, total open interest declined by 4,977 contracts, which relative to volume is approximately 20% below average. The January contract accounted for loss of 11,037 of open interest, and there were insufficient open interest increases in the forward months to offset the decline in January.

The action on December 5 is decidedly bearish, and as this report is being compiled on December 8, January soybeans are trading 6.50 cents higher and have made a daily high of 10.50 1/2.This is the highest print since 10.51 1/2 made on November 28. In order for January soybeans to generate a short-term buy signal, which would reverse the short-term sell signal generated on December 3, the low of the day must be above OIA’s key pivot point for December 8 of 10.34 1/8. The low on December 8 thus far has been 10.30, and therefore the short-term sell signal will not be reversed. January soybeans remain on an intermediate term sell signal.

Soybean meal:

January soybean meal advanced $8.60 on volume of 85,823 contracts. Total open interest declined by a hefty 3,885 contracts, which relative to volume is approximately 75% above average meaning liquidation was extremely heavy on the advance. The December contract accounted for loss of 768 of open interest, January 2015 -5045. The action on Friday was especially bearish for soybean meal, because it has been the leader, and the liquidation in soybean meal was of far greater magnitude than soybeans. The strength in soybean meal can be attributed to the action in the December contract, and once it goes off the board, we think soybean meal will resume its downtrend.In order for January soybean meal to resume its uptrend, the low the day must be above OIA’s key pivot point for December 8 of $368.10. The low on December 8 as far has been 364.00, considerably below the pivot point. January soybean meal remains on a short and intermediate term buy signal.

 Corn:

March corn advanced 5.25 cents on volume of 205,416 contracts. Volume shrank from December 4 when March corn advanced 7.75 cents on volume of 238,888 contracts and total open interest increased by 11,427 contracts. On December 5, total open interest declined by 1,510, which relative to volume is approximately 60% below average. The December contract accounted for loss of 1918 of open interest, March 2015 -1092, May 2015-588. In short, there was liquidation across the board as March corn made a new high for the move at 3.96 which took out the previous recent high of 3.94 1/4 made on November 21. As this report is being compiled on December 8, March corn is trading 1.75 cents lower after making a new high for the move at 3.99 3/4. This is the highest print since $4.01 1/4 made on November 13. In order for the rally to continue, March corn must make a low above OIA’s key pivot point for December 8 of 4.03.

Chicago wheat:

March Chicago wheat advanced 4.25 cents on volume of 70,467 contracts. Total open interest declined by 2,073 contracts, which relative to volume is approximately 20% above average meaning that liquidation was heavier than average. The December contract accounted for loss of 445 of open interest, March 2015 -1547, July 2015 -809. In short there was liquidation across the board. As this report is being compiled on December 8, March Chicago wheat is trading 8.25 cents higher and has made a daily high of 6.05 3/4, which is below the high for the move of 6.11 3/4 made on December 2. As we said in prior reports, the move in wheat is all about Russia. March Chicago wheat remains on a short and intermediate term buy signal. We have no recommendation.

Live cattle:

February live cattle lost 2.10 cents on volume of 52,432 contracts. Total open interest declined by a massive 10,155 contracts, which relative to volume is approximately 525% above average meaning liquidation was off the charts heavy. The December contract lost 10,970 of open interest, February 2015 -205, April 2015 -38. As this report is being compiled on December 8, February live cattle is trading 2.775 cents lower. On December 3, OIA announced that February cattle generated a short-term sell signal, and for an intermediate term sell signal to be generated, the high of the day must be below OIA’s key pivot point for December 8 of 1.62800.Unfortunately, after generating a short-term sell signal on December 3, the market has headed straight down and has not given clients in opportunity to initiate bearish positions. We think a counter trend rally could occur at any time and discourage anyone from chasing the market.

WTI crude oil:

January WTI crude oil lost 97 cents on volume of 518,358 contracts. Total open interest declined by 11,375 contracts, which relative to volume is approximately 15% below average. The January contract accounted for loss of 24,675 of open interest. As this report is being compiled on December 8, January WTI crude oil is trading $2.45 lower and has made a new contract low of 62.78, which takes out the previous contract low of 63.72 made on December 1. How much lower the market can go is anyone’s guess¬†and we recommend a stand aside posture.

Natural gas:

January natural gas advanced 15.3 cents on volume of 366,905 contracts. Total open interest declined by 12,257 contracts, which relative to volume is approximately 35% above average meaning liquidation was fairly heavy on the advance. This is clearly bearish open interest action relative to the price advance. The January contract accounted for loss of 20,657 of open interest. As this report is being compiled on December 8, January natural gas is trading 17.5 cents lower and has taken out the previous low for the move of 3.638 made on December 4 with another new low of 3.589. On December 1, OIA announced that January natural gas generated a short and intermediate term sell signal.

Gold:

February gold lost $17.30 on volume of 166,645 contracts. Total open interest increased by 1,207 contracts, which relative to volume is approximately 60% below average. As this report is being compiled on December 8, February gold is trading $9.60 higher on the day. February gold remains on a short and intermediate term sell signal.

Coffee:

March coffee lost 2.35 cents on relatively heavy volume of 24,796 contracts. Total open interest increased by 1,230 contracts, which relative to volume is approximately 100% above average meaning that new short sellers were aggressively entering the market in heavy numbers and driving prices lower. The open interest increases were across the board. Friday was the first indication that new short sellers are entering the market in large numbers, and it means one of two things: Either coffee is near a low for the move, or it is the beginning of another leg down. March coffee remains on a short and intermediate term sell signal.

10 year Treasury Note:

The March 10 year treasury note lost 19 points on volume of 1,685,038 contracts. Total open interest increased by 31,133 contracts, which relative to volume is approximately is 25% below average. As this report is being compiled on December 8, the March note is trading 8 points higher as the S&P 500 loses 20.25 points. A short-term sell will not be generated on December 8 because the high of the day is considerably above OIA’s key pivot point for December 8 of 125-300. Stand aside.