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Corn:

July corn advanced strongly on April 20 by 10.25 cents on heavy volume of 715,781 contracts. Total open interest exploded higher, up by 22,395 contracts, which relative to volume is approximately 10% above average. The May contract accounted for a loss of 18,498 of open interest.

During the past four sessions beginning on April 15, corn has gained 21.75 cents while total open interest has increased by 28,515 contracts. This indicates that new buying has been pushing prices higher during the past four days and also confirms that there are huge numbers of short-sellers remaining in the market who are experiencing losses on positions.

On April 14, OIA announced that May and July corn generated short-term buy signals and it appears that on April 21 corn is experiencing its first pullback since the buy signal. We expect more of a correction before the market resumes its upward trend.

As this report is being compiled on April 21, the July contract is trading 2.25 cents lower after making a new high for the move of 4.07 1/4, which is the highest print since 4.07 1/2 Made on October 27, 2015. Do not enter new bullish positions at current levels and do not attempt to pick a top in the market.

Soybeans: The 50 day moving average for the July contract has crossed above the 200 day moving average. This bullish moving average cross should be taken seriously and confirms the strong technical set up for soybeans.

July soybeans advanced by a very strong 24.25 cents on exchange record volume of 804,244 contracts. Total open interest declined by a massive 36,531 contracts, which relative to volume is approximately 75% above average meaning liquidation was extremely heavy on yesterday’s robust advance that was powered by short sellers covering. The May contract accounted for a loss of 28,437 of open interest.

As this report is being compiled on April 21, the July contract is trading 5.50 cents higher and has made a new contract high of 10.43 3/4, which is the highest print on the weekly continuation chart since 10.45 made the week of July 13, 2015. On March 7, OIA announced that soybeans generated short-term buy signals and intermediate term by signals on March 11.

The market is massively overbought and is doing severe damage to anyone who is on the wrong side. Do not attempt to pick a top in the market and do not enter bullish positions at current levels. This is a runaway train and the best thing to do is be an observer.

Soybean meal:

July soybean meal sprinted higher by $13.60 on huge volume of 278,423 contracts. However, the total open interest increase of 1,498 was a disappointment and was approximately 70% below average. The May contract lost 8,052 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in May and increase total open interest.

Of the bean complex, soybean meal is the one that showed a net short position held by managed money in the latest COT report. They are covering desperately as soybean meal reaches multi-month highs. As this report is being compiled on April 21, the July contract is trading $6.20 higher and has made a new contract high of 334.50, which is the highest print since 344.00 made the week of August 10, 2015.

On March 7, OIA announced that soybean meal generated a short-term buy signal and an intermediate term buy signal on March 28. Like soybeans, soybean meal is a runaway train and the best thing to do is to observe from the sidelines. Do not attempt to pick a top, nor should bullish positions the considered at current levels.

Chicago wheat:

July Chicago wheat advanced 18.00 cents on strong volume of 213,479 contracts. Total open interest declined by a massive 9,758 contracts, which relative to volume is approximately 75% above average meaning that short sellers were powering the market higher. The May contract lost 11,045 of open interest.

On April 19, OIA announced that May and July Chicago wheat generated short and intermediate term buy signals. The market is experiencing its first corrective day on April 21 and is currently trading 4.75 cents below yesterday’s close. Do not attempt to pick a top in the market and do not enter bullish positions at current levels.

Coffee: On April 20, July coffee generated a short-term buy signal and remains on an intermediate term buy signal yesterday’s buy signal reversed the April 5 short-term sell signal.

WTI crude oil:

June WTI crude oil advanced $1.71 on volume of 1,205,652 contracts. Volume increased somewhat from April 19 when the June contract gained 1.27 on volume of 1,150,591 contracts and total open interest declined by 19,370. On April 20, total open interest increased only 11,790 contracts, which relative to volume is approximately 50% below average. The May contract accounted for a loss of 17,982 of open interest.

In summary, on April 19 and 20 the June contract gained a combined $2.98, yet total open interest actually declined by 7,580 in the two day time frame. This indicates a lack of buying support at the upper end of the trading range. As this report is being compiled on April 21 the June contract is trading 74 cents below yesterday’s close, but before trading lower made a new high for the move of 44.49. June WTI remains on short and intermediate term buy signals. We have no recommendation.

Natural gas: On April 20, May and June natural gas generated intermediate term by signals after generating a short term buy signal on March 16.

June natural gas lost 8 ticks on heavy volume of 524,038 contracts. Volume increased from April 19 when the June contract gained 14.8 cents on volume of 506,640 contracts and total open interest declined by 4,681. On April 20, total open interest declined by a massive 30,293 contracts, which relative to volume is approximately 120% above average meaning liquidation was extremely heavy despite the narrow range day and fractionally lower close. The May contract accounted for a loss of 27,031 of open interest. We continue to see speculative short-sellers covering positions and this is supporting the market. As this report is being compiled on April 21 the June contract is trading 3.5 cents higher and trading near the highs of the day. We have no recommendation.

Copper: On April 21, July copper will generate short and intermediate term buy signals.

Dollar index:

The June dollar index advanced 52.4 points on light volume of 15,742 contracts. However, total open interest declined by a massive 669 contracts, which relative to volume is approximately 60% above average meaning liquidation was heavy even though the dollar index advanced strongly. This confirms the bearish set up for the dollar index and the 50 day moving average remains substantially below the 200 day moving average. Though the dollar index will have periodic rallies, it would have to experience substantial strength for an extended period of time for the 50 day moving average to cross above the 200 day moving average, which would put it on solid bullish footing. Stand aside.

British pound: On April 20, the June British pound generated a short-term buy signal, which reverses the April 6 short-term sell signal. The June contract remains on an intermediate term sell signal.

The June pound lost 73 pips on volume of 89,687 contracts. Total open interest declined by a hefty 3,562 contracts, which relative to volume is approximately 25% above average. However, this is perfectly normal activity on a price decline. As this report is being compiled on April 21, the June contract is trading 36 pips lower, but has made a new high for the move of 1.4444, which is the highest print since 1.440 made on March 30.

For the past several weeks, the pound has been range bound by 1.4500 and 1.4000. Before recommending bearish positions, the pound would have to generate a short-term sell signal. We are looking for a rally that will blow out short-sellers before it resumes its downtrend and generates the sell signal.

10 Year Treasury Note: On April 21, the June 10 year treasury note will generate a short-term sell signal, but remains on an intermediate term buy signal.

The June 10 year treasury note lost 17.5 points on volume of 1,294,144 contracts. Total open interest declined by 25,592 contracts, which relative to volume is approximately 20% below average. As this report is being compiled on April 21, the June contract is trading 5 points lower. Beginning tomorrow, the June note should have a counter trend rally for 1-3 days and this would be the opportunity to initiate bearish positions. Our only concern would be a major decline in the equity market, which could reverse the sell signal.