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Tech Guy Opening Calls & Comments 9/7/23

Dec Wheat - 1 to 2 Higher

Dec Corn - Steady

Nov Beans - 2 to 4 Lower

Open Interest has increased about 49,000 contracts, in all months of corn, from last Wednesday, August 30 to yesterday. During this period on the daily corn continuation chart, ranges have narrowed, forming a contracting triangle.

This market is really constricting and coming to a pinch point, preparing for a breakout move. Often times the chart scholars will say, in general, when you have a sideways market and open interest is increasing, that the professionals and commercials are selling.

This would imply an impending selloff. However, I have noticed through the years, when you are looking for a major swing low point, which we are, and open interest increases a bunch, an impending rally is coming.

When this has happened, I have gone back to look at the next commitment of traders report to see who was adding positions, and it's usually commercial and spec buying. 49,000 contracts in 5 trading days is serious accumulation of contracts.

This implies major intent. This kind of volume is probably more than 1 entity - a few whales who are in the know looking to spend about a hundred million in margin if corn margin is about $2000.

We will look at the commitment of traders tomorrow afternoon, which will not include this Wednesday - Friday data, and report the details over the weekend.

Here is the corn open interest and volume details from cme group.

Here is the corn daily chart zoomed in, and looking like a spring coiling up. 483.25 was today's low.

I was losing the forest in November Soybeans with the gap, as it turned out to be a common gap that takes care of business quickly by filling. Beans simply needed to mark a C leg to complete the A-B-C.

We may sell off another 5 to 10 cents , but it does not have to. I was counting the zig-zagging down correction as many A-B-C's linked together, but alas, one leg usually doesn't get the job done.

During longer corrective periods, open interest will usually decrease overall, but I have observed during grain rallies with shorter term corrections (1-2 weeks), the buyers keep buying during the backfill.

Open Interest increased about 15,000 contracts from August 30 till yesterday in all soybean contracts. This is just a bit below par from corn increase in OI, as corn has about 1.74 times the open interest of soybeans - still a good amount of energy.

Here is today's 1 hour November beans.

In late September 2014, this increase in open interest occurred in soybeans before a 17% rally.


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