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Soybeans:

January soybeans advanced 18.50 cents on volume of 215,742 contracts. Volume was the strongest since November 13 when January soybeans gained 5.75 cents on volume of 224,225 contracts and total open interest increased by 4,522 contracts. On November 21, total open interest declined by 3,949 contracts, which relative to volume is approximately 25% less than average. The January contract accounted for loss of 10,320 of open interest.

The action on Friday was distinctly bearish, and in our view confirms the underlying weakness of soybeans. On Friday, January soybeans made a high of 10.40, which is below the high of 10.42 made on November 18. Additionally, the January contract has not been able to make a low above our pivot point of 10.33 7/8, which it must do in order for the rally to continue. Clients should begin to position themselves on the bearish side of the market and liquidate any bearish positions if the January contract makes a daily low above OIA’s pivot point. We think the market is headed lower, and as pointed out in the weekend report, managed money is not supporting higher prices, and is liquidating long positions according to the latest COT report. January soybeans remains on a short-term buy signal, but in intermediate term sell signal.

Soybean meal:

January soybean meal advanced $7.90 on volume of 126,572 contracts. Volume was the strongest since November 12 when soybean meal lost $5.60 on heavy volume of 184,629 contracts and total open interest declined by 5,931 contracts. On November 21, total open interest declined by 4,329 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly heavy on the advance. The December contract accounted for loss of 14,815 of open interest.

For the past 3 sessions beginning on November 19, price and open interest action has been acting bearishly: open interest increases on price declines and when prices advance, open interest declines. This is a distinct change in pattern and in our view supports the likelihood the move higher in soybean meal has come to an end. Conceivably, after 1st notice day, or prior to it, there may be some additional fireworks, but for the most part the ┬ámeal market has discounted additional trouble obtaining soybeans for crushing. For January soybean meal to resume its uptrend, the low the day must be above OIA’s key pivot point for November 24 of $367.30. January soybean meal will generate a short-term sell signal if the high for the day is below OIA’s key pivot point for November 24 of $352.30.

Corn:

March corn lost 1.00 cent on volume of 438,345 contracts. Volume increased slightly from November 20 when March corn advanced 10.25 cents on volume of 430,589 contracts and total open interest declined by 2319 contracts. On November 21, total open interest declined by a massive 58,783 contracts, and this was due to the December contract losing 85,202 of open interest as it approaches 1st notice day. As this report is being compiled on November 24, March corn is trading 5.25 cents lower. If the rally in March corn is to continue, it must make a daily low above OIA’s key pivot point for November 24 of 3.86 1/4. March corn will generate a short-term sell signal if the high for the day is below OIA’s key pivot point for November 24 of 3.76 1/2. March corn remains on a short and intermediate term buy signal.

Chicago wheat:

March Chicago wheat advanced 1.00 cent on volume of 118,550 contracts. Total open interest declined by 29,719 contracts and this was due to the December contract losing 30,617 of open interest. Additionally, the March 2015 contract lost 3,429 of open interest.Although March Chicago wheat remains on a short and intermediate term buy signal, we see no compelling reason to be involved with wheat and believe that after a sufficient number of shorts have been blown out of the market, Chicago wheat will resume its downtrend.

WTI crude oil:

January WTI crude oil advanced 66 cents on light volume of 474,328 contracts. Volume shrank from November 20 when January WTI advanced $1.35 on volume of 491,994 contracts and total open interest declined by 22,579 contracts. On November 21, total open interest declined by 7,017 contracts, which relative to volume is approximately 40% less than average. The December contract accounted for loss of 27 of open interest. The price and open interest action of November 20 and 21 is distinctly bearish, and this was the first two-day rally in WTI in quite some time. During the two-day time frame, January WTI advanced $2.01 and total open interest declined by 29,596 contracts. As this report is being compiled on November 24, January WTI is trading 51 cents lower on the day. The market continues to look very weak and new contract lows should be expected.

Natural gas:

January natural gas lost 23.2 cents on volume of 378,813 contracts. Volume shrank dramatically from November 20 when January natural gas advanced 13.3 cents on volume of 638,618 contracts and total open interest declined by 2,247 contracts.On November 21, total open interest declined by 3,730 contracts, which relative to volume is approximately 50% below average. The December contract lost 7,682 of open interest. Although natural gas remains on a short and intermediate term buy signal, we advise clients to be on the sidelines.

The price and open interest action has been fairly negative. On November 19, natural gas advanced 12.7 cents on volume of 573,210 contracts and total open interest declined by 10,036 contracts. In short, the market is displaying unhealthy open interest action relative to price advances and declines. Another example: On November 21 with a decline of 23.2 cents, total open interest should have declined considerably more which would have put the market on a more solid footing. This indicates that longs are digging in and refusing to liquidate. As this report is being compiled on November 24, January natural gas is trading 12.4 cents lower after making a daily low of $4.155, which is the lowest print since November 14 (4.044).On Friday the January natural gas made a low of 4.39 and there may be a gap between this low and the high on November 24. However, we expect the gap to be filled shortly. In order for January natural gas to continue its uptrend, it must make a daily low above OIA’s key pivot point for November 24 of 4.310.

Gold:

December gold advanced $6.80 on heavy volume of 244,086 contracts. Volume increased from November 20 when December gold lost $3.00 on volume of 227,000 contracts and total open interest increased by 8,492 contracts. On November 21, total open interest increased only 697 contracts, however the December contract accounted for loss of 13,254 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in December. We consider the action on November 21 as constructive. As this report is being compiled on November 24, December gold is trading $1.80 higher on the day and has made a high of 1203.80, which is below Friday’s high of 1207.60. In order for December gold to generate a short-term buy signal, the low the day must be above OIA’s key pivot point of $1201.30. December gold remains on a short and intermediate term sell signal.

Coffee:

March coffee advanced 1.85 cents on light volume of 18,686 contracts. Total open interest increased by 150 contracts, which relative to volume is approximately 55% below average. The December contract accounted for loss of 84 of open interest, March 2015 -729. As this report is being compiled on November 24, March coffee has closed at 1.9050, down 20 ticks after making a daily high of 1.9780, which was the highest print since 1.9850 made on November 20.The market is unable to muster enough strength for a sustained upside move and in order for a short-term buy signal to be generated, the low the day must be above OIA’s key pivot point for November 24 of 1.9730. Stand aside for now.