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Soybeans:

May soybeans gained 0.50 cents on volume of 221,609 contracts. Total open interest increased by a massive 10,566 contracts, which relative to volume is approximately 75% above average meaning a battle ensued between buyers and sellers and buyers were able to edge the market fractionally higher. The May contract lost 9,131 of open interest.

As this report is being compiled on April 9, May soybeans are trading 13.25 cents lower and have made a daily low of 9.50 1/4, which is the lowest print since 9.51 1/4 made on March 31. May soybeans remain on the short and intermediate term sell signal and we see the market continuing to drift lower.

Soybean meal:

May soybean meal gained 20 cents on volume of 94,291 contracts. Total open interest increased by 516 contracts, which relative to volume is approximately 70% below average. The May contract lost 7,830 of open interest. As this report is being compiled on April 9, May soybeans are trading sharply lower, down 6.30 or -1.97% versus soybeans which are trading -1.34%.May soybean meal remains on a short and intermediate term sell signal and we expect the market to continue to drift lower.

Corn:

May corn lost 3.75 cents on heavy volume of 430,732 contracts. Volume increased dramatically from April 7 when May corn lost 2.00 cents on volume of 178,234 contracts and total open interest declined by 730 contracts. Additionally, volume exceeded that of April 1 when May corn advanced 5.50 cents on volume of 418,595 contracts and total open interest increased by 12,621 contracts.

On April 8, total open interest increased by a massive 20,337 contracts, which relative to volume is approximately 75% above average meaning that aggressive new short-sellers were entering the corn market in very large numbers and driving prices lower (3.76 3/4). The May contract lost 14,018 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on April 9, May corn is trading 1.00 cent lower and has taken out yesterday’s low with the new print of 3.75, which is the lowest since 3.74 made on April 1. May corn remains on a short and intermediate term sell signal.

Chicago wheat:

May Chicago wheat gained 0.25 cents on heavy volume of 178,530 contracts. Volume took out the previous recent high of 161,339 made on April 2 when May Chicago wheat advanced 7.75 cents and total open interest increased by 2,800 contracts. On April 8, total open interest increased by 2,185 contracts, which relative to volume is approximately 45% below average. The May contract lost 15,212 open interest. As this report is being compiled on April 9, May Chicago wheat is trading unchanged on the day. May Chicago wheat remains on a short-term buy signal, but an intermediate-term sell signal.

Kansas City wheat:

May Kansas City wheat lost 4.00 cents on volume of 51,880 contracts. Total open interest increased by 177 contracts, which relative to volume is approximately 85% below average. As this report is being compiled on April 9, May Kansas City wheat is trading 2.50 lower. May Kansas City wheat remains on a short-term buy signal, but any intermediate-term sell signal.

Cotton:

July cotton gained 40 points on heavy volume of 57,835 contracts. Total open interest increased by massive 6,582 contracts, which relative to volume is approximately 320% above average meaning a battle ensued between buyers and sellers, but buyers were only able to move the market fractionally higher. This spells potential trouble for the continued rally. In short, there was aggressive selling keeping a lid on the advance.

For the past three days beginning on April 6, cotton has advanced 2.55 cents while total open interest increased by a massive 13,799 contracts and the increase on April 8 has been the largest thus far in the bull move. Also, the volume traded on April 8 has been the highest during the past three days. Often dramatic increases of volume and open interest at the upper end of the trading range can indicate a top or temporary top. On April 6, May and July cotton generated a short and intermediate term sell signal, and the market has not had a pullback since. Stand aside.

WTI crude oil:

May WTI crude oil lost $3.56 on volume of 1,136,045 contracts. Total open interest declined by a massive 34,980 contracts, which relative to volume is approximately 10% above average meaning liquidation was substantial on the very large decline. This is constructive open interest action.The May contract lost a massive 75,422 of open interest and there were sufficient open interest increases in the forward months to cut the total the open interest decline  in half.

As this report is being compiled on April 9, May WTI is trading 1.17 higher on the day. In yesterday’s report, we indicated that traders should wait for another day of decline before considering the initiation of short put positions. We still think the market is vulnerable for a further setback. On April 7, May WTI crude oil generated a short term buy signal, but remains on intermediate-term sell signal.

From the April 7 report:

“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.”

Brent crude oil:

May Brent crude oil lost $3.55 on volume of 960,681 contract. Total open interest declined by 9,731 contracts, which relative to volume is approximately 50% below average. The May contract lost 36,459 of open interest. As this report is being compiled on April 9, May Brent crude oil is trading 2.10 higher, or +3.74% versus WTI trading +2.52%. May Brent crude oil remains on a short and intermediate term sell signal.

Gold: We remain concerned about the bearish head and shoulders pattern on the weekly gold chart.

June gold lost $7.50 on volume of 122,661 contracts. Total open interest increased by 483 contracts, which relative to volume is approximately 85% below average, however an open interest increase on a price decline is bearish. Also, April through June 2015 contracts lost 767 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on April 9, June gold is trading $9.80 lower and has made a daily low of 1192.40, which is below yesterday’s low of 1197.40.

On April 6, June gold generated a short-term buy signal and remains on an intermediate term sell signal. Since the generation of the buy signal, the market has pulled back, which is typical, however, April 9 should be the last day of a significant pullback. Occasionally, pullbacks can last three days, and this may be the case with gold, especially since the dollar index is trading sharply higher on April 9. June gold will generate a short term sell signal if the high of the day is below OIA’s key pivot point for April 9 of 1182.80. Stand aside.

Silver: We remain concerned about the bearish head and shoulders pattern on the weekly silver chart.

May silver lost 38.6 cents on heavy volume of 63,806 contracts. Total open interest increased by a substantial 2,015 contracts, which relative to volume is approximately 15% above average. The April through May 2015 contracts lost a total of 3,373 of open interest, which makes the total open interest increase more impressive (bearish).

As this report is being compiled on April 9, May silver is trading 27.4 cents lower and has made a daily low of 16.105, which is below yesterday’s print of 16.370. May silver will generate a short term sell signal if the daily high is below OIA’s key pivot point for April 9 of 16.264 and will generate an intermediate term sell signal if the daily high is below OIA’s key pivot point for April 9 of 16.430. Stand aside.

Coffee:

July coffee lost 6.10 cents on heavy volume of 50,757 contracts. Volume exceeded that of April 7 with July coffee lost 4.00 cents on volume of 35,987 contracts and total open interest declined by 464 contracts. Additionally, volume was the highest since April 2 when coffee advanced 6.05 cents on volume of 56,672 contracts and total open interest increased by 3,412.

On April 8, total open interest increased by 2,211 contracts, which relative to volume is approximately 65% above average meaning that aggressive new short-sellers were entering the market in large numbers and driving prices lower (1.3820). As this report is being compiled on April 9, coffee is trading 75 points lower on the day and has made a daily low of 1.3665.

Although May and July coffee generated a short-term buy signal on April 7, we do not like the way it is trading and think it is possible for the buy signal to reverse. Additionally, the spread action between the various delivery months is clearly bearish. We think prices are headed higher longer-term, but coffee may trade in a side ways to lower pattern in the short term. July coffee will generate a short term sell signal if the the daily high is below OIA’s key pivot point for April 9 of 1.3790.