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Soybeans:

August soybeans lost 8.75 cents on volume of 287,622 contracts. Volume fell sharply from June 30 when August soybeans gained 55.00 cents on volume of 503,063 contracts and total open interest increased by 6,379. On July 1, total open interest increased by 2,307 contracts, which relative to volume is approximately 60% below average. The July contract lost 3,691 of open interest and the new crop November contract lost 388.

As this report is being compiled on July 2, the August contract is trading 1.25 cents above yesterday’s close and has made a daily high of 10.43, which is below yesterday’s print of 10.54 3/4, the high for the move and was made during the early morning hours of July 1. On June 30, the day of the large rally, the August contract made a high of 10.51 1/4. We interpret yesterday’s open interest increase as a rather neutral reading, but want to re-emphasize that for soybeans to move substantially higher from here new buyers must be willing to step up and pay ever higher prices. Unless there is a weather scare, we do not think this is in the cards. August soybeans remain on short and intermediate term buy signals.

Soybean oil:

August soybean oil lost 52 points on volume of 109,375 contracts. Total open interest declined by a massive 7,704 contracts, which relative to volume is approximately 210% above average meaning liquidation was extremely heavy on the decline. The July contract lost 1,691 of open interest, August 2015 -1,806, and new crop December -4,700. As this report is being compiled on July 2, the August contract is trading 35 points above yesterday’s close. Maintain bearish positions recommended on June 23 and exit these above penetration of the June 26 high of 33.84. August soybean oil remains on a short-term sell signal, but an intermediate term buy signal

Soybean meal:

August soybean meal gained 30 cents on volume of 105,987 contracts. Total open interest increased by 572 contracts, which relative to volume is approximately 75% below average. The July contract lost 1,225 open interest, August 2015 -1,296, which means there were sufficient open interest increases in the forward months to offset declines in July and August. Our reading of yesterday’s open interest action is it is moderately constructive. As this report is being compiled on July 2, the August contract is trading $1.30 higher on the day and has made a daily high of 355.20, which is below yesterday’s print of 356.20, which is the high for the move thus far.August soybean meal remains on short and intermediate term buy signals.

Corn:

September corn gained 0.50 cents on heavy volume of 667,830 contracts. Volume contracted from June 30 when the September contract advanced 30.00 cents on volume of 845,770 contracts and total open interest increased by 17,204.On July 1, total open interest declined by 2,047 contracts, which is minuscule and dramatically below average. The July contract lost 5,218 of open interest, and the March and May 2016 contracts lost a total of 1,090.The decline of open interest in yesterday’s trading is perfectly normal.

As this report is being compiled on July 2, the September contract is making new highs for the move and trading 6.75 cents above yesterday’s close and taken out the previous high for the move of 4.26 1/2 made on July 1 in the early morning hours of trading. If September corn makes a new closing high, it will be important to see that total open interest increases.

Corn needs new aggressive buyers to keep prices moving higher, especially if short-sellers have been blown out of the market, thereby reducing this source of buying power. We will not know this until we see the latest COT report, which may be delayed because it is released on Friday and tomorrow is a holiday. We are somewhat skeptical of a substantial increase of prices unless there are weather problems. September corn remains on short and intermediate term buy signals.

Chicago wheat:

September Chicago wheat lost 27.25 cents on volume of 217,128 contracts. Volume contracted from June 30 when the September contract gained 32.25 cents on volume of 230,154 contracts and total open interest increased by 6,172. On July 1, total open interest declined by 4,686 contracts, which relative to volume is approximately 20% below average, and it is perfectly normal that open interest would decline along with prices, especially because there was a total open interest increase on June 30.

As this report is being compiled on July 2 the September contract is trading 5.75 cents above yesterday’s close has made at daily high of 5.98, which is below yesterday’s print of 6.15. The high for the move occurred on June 30 when the September contract printed 6.17 1/2. September Chicago wheat remains on short and intermediate term buy signals. 

Live cattle:

August live cattle advanced the 3.00 cent daily limit on heavy volume of 58,462 contracts. Volume was the strongest since June 25 when the August contract lost 1.75 cents on volume of 63,484 contracts and total open interest declined by 9,860. On July 1, total open interest increased by only 854 contracts, which relative to volume is approximately 40% below average. The August contract lost 601 of open interest, which makes the total open interest increase somewhat more favorable.However, the August contract, which holds the large majority of open interest experienced a decline of open interest and this is negative.

Considering the magnitude of yesterday’s move the total open interest increased by is a disappointment and in our mind confirms that managed money has for the most part lost interest in live cattle. Yesterday, the August contract made a high of 1.51075, and this has been taken out on July 2 with another high print of 1.51975, which is slightly above the June 24 high of 1.51800.

As this report is then compiled on July 2, the August contract is barely trading above unchanged for the day. The market opened at 1.51650, then immediately made its high for the day and has been trading lower ever since. On June 26, August live cattle generated a short-term sell signal, and for this to reverse, the August contract must make a daily low above two of OIA’s key pivot points of 1.51640 and 1.51935.

We do not think this is likely and think live cattle will soon resume its down trend. Clients should be looking to initiate bearish positions, and could use today’s high (1.51975) or more preferably the June 22 high of 1.52425 as exit points for these positions.

WTI crude oil:

August WTI crude oil lost $2.51 on heavy volume of 734,176 contracts. Volume was the strongest since June 17 when WTI lost 5 cents on volume of 983,983 contracts and total open interest declined by 17,002 contracts. On July 1, total open interest increased by 13,379 contracts, which relative to volume is approximately 25% below average, but an open interest increase on yesterday’s price decline is bearish.

Yesterday, the August contract made a low of 56.68, which takes out the May 28 low of 56.88. Despite the weakness in WTI, it has not generated an intermediate term sell signal, but generated a short term sell signal on May 20. For an intermediate term sell signal to be generated, the high of the day must be below OIA’s key pivot point for July 2 of $57.39.

Dollar index:

The September dollar index advanced strongly by 84.8 points on volume of 46,216 contracts. Total open interest increased by a massive 3,268 contracts, which relative to volume is approximately 185% above average meaning that aggressive new buyers were entering the market in large numbers and driving prices higher (96.555).

As this report is being compiled on July 2, the September contract is trading 24.9 points lower and has made a daily high of 96.670, which is slightly above yesterday’s high. The September dollar index remains on a short and intermediate term sell signal and for a short term buy signal to be generated, the low of the day must be above OIA’s key pivot point for July 2 of 96.320.

Euro:

The September euro lost 97 pips on volume of 203,356 contracts. Total open interest increased by 3,751 contracts, which relative to volume is approximately 25% below average, but an open interest increase on yesterday’s price decline is bearish. As this report is being compiled on July 2, the September contract is trading 43 pips above yesterday’s close and has made a daily high of 1.1134, which is above OIA’s key pivot point of July 2 for the generation of a sell signal of 1.1122. For the sell signal to be generated the high of the day must be below the pivot point. It appears inevitable that a short-term sell signal will be generated and the impending elections this Sunday in Greece will likely seal the euro’s fate.