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Corn:

July corn advanced 6.25 cents on volume of 535,576 contracts. Total open interest declined by 4,959 contracts, which relative to volume is approximately 50% below average. The May contract accounted for a loss of 21,586 of open interest. As this report is being compiled on April 26, the July contract is trading 2.75 cents above yesterday’s close and has made a daily high of 3.87 1/2, which is below yesterday’s print of 3.89 1/2. On April 14, July corn generated short and intermediate term buy signals. We think the market will trade in the consolidation pattern and eventually retest last week’s print of 4.07 1/4. We have no recommendation.

Soybeans:

July soybeans advanced 13.50 cents on volume of 459,881 contracts. Total open interest increased by 2,011 contracts, which relative to volume is approximately 75% below average. However, the May contract accounted for a loss of 18,969 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 slightly.

Though yesterday’s performance was relatively positive, in our view it reflected a reluctance of new participants to make new commitments at ever higher prices. As this report is being compiled on April 26, the July contract is trading 11.50 cents higher after making a daily low of 10.0 1 1/2, which is above yesterday’s print of 9.86 1/4. It is likely that soybeans will consolidate its gains, and eventually make a run at last week’s high of 10.43 3/4. We have no recommendation.

Live cattle:

June live cattle advanced strongly by 1.95 cents on very light volume of 41,977 contracts. Volume traded yesterday was approximately 25% below year to date average daily volume, indicating that participation on the rally was low. On April 25, total open interest declined by 1,588 contracts, which relative to volume is approximately 30% above average meaning liquidation was substantial on yesterday’s strong advance. This is bearish. The April contract accounted for a loss of 1,518 of open interest and June -628.

As this report is being compiled on April 26 the June contract is trading 1.650 higher on the day on low volume. We think the market will retest the contract low of 113.900 made on April 25 and take it out. June cattle remains on short and intermediate term sell signals. Rallies should be sold.

Sugar: On April 26, July sugar will generate a short term buy signal, which reverses the April 5 short-term sell signal. July sugar remains on an intermediate term buy signal. Additionally, the 50 day moving average is substantially above the 200 day moving average indicating that sugar is in a bull market according to our technical view of sugar.

July sugar advanced 42 points on volume of 141,297 contracts. Total open interest declined by a massive 12,844 contracts, which relative to volume is approximately 250% above average meaning liquidation was extremely heavy, but the May contract accounted for a loss of 20,382 and will be expiring shortly. We have no recommendation.

WTI crude oil:

June WTI lost $1.09 on lighter than normal volume of 946,786 contracts. Total open interest increased by 5,288 contracts, which relative to volume is approximately 70% below average. The June contract accounted for a loss of 1,308 of open interest. As this report is being compiled on April 26, the June contract is trading sharply higher, up $1.39 and has made a daily high of 44.20, which is below yesterday’s print of 44.45. June WTI remains on short and intermediate term buy signals. We have no recommendation.

Gold:

June gold advanced $10.20 on light volume of 128,365 contracts. Total open interest declined by a massive 6,408 contracts, which relative to volume is approximately 100% above average meaning liquidation was extremely heavy on yesterday’s advance. Combining the low volume and large decline of open interest on the advance, it confirms our view that clients should stand aside. The next couple of months are generally a period of under performance and managed money is long gold by a ratio of over 6 to 1, which makes gold vulnerable to further declines.

Yen: On April 25 the June yen generated a short-term sell signal and remains on an intermediate term buy signal.

The June yen advanced 31 pips on light volume of 104,862 contracts. Total open interest declined by 3,335 contracts, which relative to volume is approximately 10% above average. The open interest decline on yesterday’s advance is negative. As this report is being compiled on April 26, the June contract is trading 6 pips lower, but was trading higher for most of the session, which is to be expected after the generation of a sell signal. Usually, after a sell signal, markets have a tendency to rally from 1-3 days and this is the opportunity to initiate bearish positions if appropriate. We have no recommendation.

Euro: On April 25, the June euro generated a short-term sell signal, but remains on an intermediate term buy signal.

The June euro advanced 31 pips on light volume of 109,530 contracts. Total open interest declined by 1,820 contracts, which relative to volume is approximately 20% below average, but an open interest decline on yesterday’s advance is negative. As this report is being compiled on April 26, the June contract is having its first day of counter trend activity, trading up 30 pips on the day. We are not bearish on the euro and the 50 day moving average is substantially above the 200 day moving average which in our view puts the euro in bull market territory. We have no recommendation.

British pound: On April 25 the June British pound generated an intermediate term buy signal after generating a short-term buy signal on April 20.

The June British pound advanced 71 pips on volume of 90,124 contracts. Total open interest exploded higher for a second day in a row, up 3,111 contracts, which relative to volume is approximately 20% above average. Since April 13 the open interest action relative to price advances has been bullish. On April 22 and 25 the pound advanced a total of 1.52 cents and total open interest increased by 4,745.

Additionally, the open interest increase on April 25 was significantly greater than April 22 (1,634) even though the pound had a greater percentage gain on April 22. In summary, on April 25, a substantial number of new buyers were moving prices higher even as the pound was trading at the highest level since mid March. As this report is being compiled on April 26 the pound is trading 104 pips above yesterday’s close and has made a daily high of 1.4641, which is the highest print since 1.4674 made on February 4, 2016.

As clients know, we have been advising a stand aside position until the pound rallied sufficiently to blow out short-sellers. Based upon trading for the past two days, short-sellers are digging in and adding new shorts rather than liquidate. This leads us to believe that higher prices are ahead and we are targeting the 150 day moving average of 1.4719 and the 200 day moving average of 1.4916 for the potential exhaustion of the move. May and June tend to be weak months performance wise for the pound. Today, (Tuesday) is the tabulation date for the COT report and it will be interesting to see whether short-sellers have reduced their exposure.

10 Year Treasury Note: On April 26, the June 10 year treasury note will generate an intermediate term sell signal after generating a short-term sell signal on April 21.

The June 10 year note lost 3 points on volume of 945,580 contracts. Total open interest declined by 26,952 contracts, which relative to volume is average. As this report is being compiled on April 26, the June note is trading 8 points lower and has made a new low for the move of 129-0 20, which is the lowest print since 128-310 made on March 28, 2016.

Since generating the short-term sell signal on April 21, the June note has not had a counter trend rally, which would have enabled clients to initiate bearish positions. Despite the down-trend, moving averages remain in a bullish set up: The 20 day moving average stands at 130-105, 50 day 129-280, 100 day 128-180 and the 200 day moving average stands at 127-060. Therefore, the June note remains in a bull market. Do not enter bearish positions at current levels.