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Soybeans:

May soybeans lost 7.50 on volume of 210,740 contracts. Total open interest increased by 7,206 contracts, which relative to volume is approximately 35% above average meaning that aggressive new short-sellers were entering the market in large numbers and driving prices lower (9.70). As this report is being compiled on April 8, May soybeans are trading unchanged and has made a daily low of 9.67 3/4, which is the lowest print since 9.51 1/4 ( the low for the move) made on March 31.

Soybean meal:

May soybean meal lost 3.30 on volume of 102,140 contracts. Total open interest declined just 397 contracts. However, the May contract lost 5,345 open interest, which means there were sufficient open interest increases in the forward months to reduce total open interest to a negligible number.We consider the open interest action on April 7 as being bearish. As this report is being compiled on April 8, May soybean meal is trading 80 cents lower and has made a daily high of 321.30, which is below OIA’s key pivot point of 325.10, which means that soybean meal prices will continue to move lower.May soybean meal remains on a short and intermediate term sell signal.

Corn:

May corn lost 2.00 cents on volume of 178,234 contracts.Total open interest declined by 730 contracts, which relative to volume is approximately 80% below average.The May contract lost 12,010 of open interest, which means there were sufficient open interest increases in the forward months to reduce total open interest to a negligible number. We consider the open interest action on April 7 to be bearish.As this report is being compiled on April 8, May corn is trading 5.50 lower and has made a daily low of 3.77 1/2, which is the lowest print since 3.74 made on April 1. May corn remains on a short and intermediate term sell signal.

Chicago wheat:

May Chicago wheat lost 1.75 cents on heavy volume of 149,280 contracts. Volume was the strongest since April 2 when May Chicago wheat advanced 7.75 cents on volume of 161,339 contracts and total open interest increased by 2,800 contracts. On April 7 total open interest increased by 5,661 contracts, which relative to volume is approximately 50% above average meaning that aggressive short-sellers were entering the market and driving prices fractionally lower. As this report is being compiled on April 8, May Chicago wheat is trading 2.25 cents lower. May Chicago wheat remains on a short-term buy signal, but an intermediate-term sell signal.

Kansas City wheat:

May Kansas City wheat lost 6.75 cents on volume of 35,008 contracts. Total open interest declined by a massive 5,253 contracts, which relative to volume is approximately 410% above average meaning liquidation was off the charts heavy. As this report is being compiled on April 8, May Kansas City wheat is trading 3.50 lower.

Cotton:

July, gained 1.08 cents on volume of 45,111 contracts. Total open interest increased by massive 5,035 contracts, which relative to volume is approximately 330% above average meaning aggressive belongs were entering the market in astoundingly large numbers and driving prices to a new high for the move (66.66). The May contract lost 978 of open interest, which makes the total open interest increase more impressive (bullish).As this report is being compiled on April 8 cotton is trading 67 points higher. Since generating a short and intermediate term buy signal on April 6, the market has not had a pullback, and remains vulnerable to corrective action. Stand aside.

WTI crude oil: On April 7, May WTI crude oil generated a short-term buy signal, but remains on an intermediate term sell signal.

May WTI crude oil advanced 1.84 on extremely heavy volume of 1,250,731 contracts. Total open interest increased by just 3,244 contracts, which is a major disappointment.The May contract accounted for loss of 27,726 of open interest. On April 6, the May contract gained $3.00 on volume of 639,105 contracts and yet open interest increased by 17,597. In short, volume doubled on April 7, and the advance was somewhat more than half of the previous day, yet the total the open interest increase was negligible.

As this report is being compiled on April 8, May WTI crude oil is trading 3.11 lower and has made a daily low a 50.67, which is below yesterday’s low of 51.17, but above the April 6 print of 49.47. As the extract from the April 6 report shows, we were expecting a pullback, and WTI should see additional corrective action on Thursday. We would use this opportunity to sell out of the money puts, because we expect WTI to trade in the high 40s-low 50s.

From the April 6 report:

“Tomorrow is the EIA report, and this may cause WTI to pull back now that the market is on a short-term buy signal. The correction could last from 1-3 days. The correction would be favor selling out of the money puts.”

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.9 million barrels from the previous week. At 482.4 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories increased by 0.8 million barrels last week, and are well above the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 0.3 million barrels last week and are in the lower half of the average range for this time of year. Propane/propylene inventories rose 0.6 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 14.0 million barrels last week.

Brent crude oil:

May Brent crude oil gained 98 cents on volume of 901,186 contracts. Total open interest increased by 4,070 contracts, which relative to volume is approximately 85% below average.The May contract lost 28,831 of open interest. As this report is being compiled on April 8, Made Brent crude oil is trading 2.82 lower. May Brent crude oil remains on the short and intermediate term sell signal.

Gold:

June gold lost $8.00 on extremely light volume of 91,251 contracts. Total open interest increased by 621 contracts, which relative to volume is approximately 60% below average. As this report is being compiled on April 8, June gold is trading 7.10 lower, which is to be expected after it generated a short-term buy signal on April 6. Typically, after the generation of a buy signal, the market has a tendency to pull back from 1-3 days. We remain concerned about the bearish head and shoulders pattern on the weekly chart. June gold remains on intermediate-term sell signal.

Silver:

May silver lost 27.00 cents on volume of 39,114 contracts. Total open interest declined by 526 contracts, which relative to volume is approximately 40% below average, which is healthy open interest action on the decline, especially since open interest increased by a substantial amount (2,011) on April 6 when May silver advanced 40.9 cents. As this report is being compiled on April 8, May silver is trading 37.5 cents lower. Although, May silver remains on a short and intermediate term buy signal, we remain concerned about the bearish head and shoulders pattern on the weekly chart.

Coffee: On April 7, May and July coffee generated a short term buy signal, but remain on an intermediate term sell signal.

July coffee lost 4.00 cents on volume of 35,987 contracts. Volume was the lowest since April 1 when coffee advanced 1.95 cents on volume of 28,805 contracts and total open interest declined by 441. This is healthy open interest action on a price decline. However, open interest declined by a massive 7646 on April 6 when coffee advanced 5.10 cents, which is negative.

As this report is being compiled on April 8, July coffee is trading sharply lower, down 5.65 cents. We are concerned  about the magnitude of the decline on April 8, after the decline in yesterday’s trading. July coffee will reverse yesterday’s short-term buy signal if the high of the day is below OIA’s key pivot point for April 8 1.3895. Stand aside.