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Soybean oil:

July soybean oil lost 6 points on volume of 158,831 contracts. Total open interest declined just 297 contracts, which is dramatically below average. The July contract lost 11,933 of open interest, which means there was sufficient open interest increases in the forward months to reduce total open interest to negligible number. We consider this to be a neutral reading. As this report is being compiled on June 11, the July contract is trading 61 points lower and on the lows of the day.

The July contract made its high on June 5 of 35.29 and has closed lower for three consecutive days. As we have said in previous reports, for soybean oil to continue its ascent, the soybean market needs to move higher. For July soybeans to generate a short-term buy signal, the low of the day must be above OIA’s key pivot point for June 11 of 9.49 1/2, and the market has not had the strength to do this.Without soybeans supporting soybean oil, we do not think rallies will be sustained.

Chicago wheat:

July Chicago wheat lost 18.75 cents on huge volume of 293,031 contracts. Volume was the highest of 2015 and took out the previous record made in late 2014 of 290,899 contracts on November 11, 2014 when the July 2015 contract closed at 5.61 1/2. On June 10, total open interest declined by 6,848 contracts, which relative to volume is approximately 10% below average, but an open interest decline accompanying yesterday’s loss is positive.

In short, liquidation driving prices lower, not new short selling. The July contract lost 18,433 of open interest. As this report is being compiled on June 11, the July contract is trading lower again, this time by 10.25 cents and on the lows of the day. On June 9, the July contract generated an intermediate term buy signal, and as a consequence, the market should experience a pullback lasting from 1-3 days. We think a test of yesterday’s high of 5.37 1/2 is realistic, but the fundamentals of the wheat market are clearly bearish, especially on a global basis.

Live cattle:

August live cattle advanced 65 points on volume of 53,080 contracts. Total open interest increased by 1,179 contracts, which relative to volume is approximately 10% below average. The June contract lost 2,231 of open interest, October 15 -728, which makes the total open interest increase more impressive (bullish). Although, cattle can continue its advance, it lacks strong momentum and the rise has undoubtedly much to do with the grilling season which began just prior to the Memorial Day holiday and will continue through Labor Day. For now, the trend is higher, but we see no compelling reason to be involved in the market.

Lean hogs: On June 10, August lean hogs generated an intermediate term sell signal after generating a short term sell signal on June 4.

This will be our last report on lean hogs until we announce a signal change or see a trading opportunity.

August lean hogs lost 15 points on strong volume of 58,562 contracts. Total open interest declined by 491 contracts, which relative to volume is approximately 55% below average. The June contract lost 412 open interest, July 2015 -6423. As this report is being compiled on June 11, the August contract is trading 70 points lower and has made a new low for the move of 78.500.

WTI crude oil:

July WTI crude oil advanced $1.29 on very heavy volume of 960,989 contracts. Volume was the strongest since April 16 when 1,029,520 contracts were traded and the July 2015 contract closed at $59.23. On June 10, total open interest increased by 13,723 contracts, which relative to volume is approximately 40% below average. The July contract accounted for loss of 37,923, which makes the total open interest increase more impressive (bullish).

For the past two sessions, the July contract has advanced $3.29, but total open interest has increased only 8,537 in this time frame.This indicates a lack of enthusiasm by potential market participants. We have been skeptical of the advance, and as this report is being compiled on June 11, the July contract is trading 92 cents lower and has made a daily low of 60.21, which is below yesterday’s print of 60.45.

In the last 10 minutes of trading for the pit close (2:20 p.m.-2:30), volume traded in the July contract was 22,498 contracts (approximately 2 1/4% of total daily volume in all contracts) and the July contract made a high of 61.50.Today’s high has been 61.53 and clients should make a note of this number as a potential interim high. On May 20, the July contract generated a short-term sell signal and will not reverse it on June 11.

Brent crude oil:

August Brent crude oil advanced 91 cents on volume of 795,830 contracts. Total open interest declined by 10,152, which relative to volume is approximately 45% below average, but a total open interest decline on yesterday’s advance is bearish.The July contract lost 25,488 of open interest and there were insufficient open interest increases in the forward months to offset this decline.

As this report is being compiled on June 11, the August contract is trading 79 cents lower. For the past two sessions, the August Brent contract has advanced $3.14, but total open interest has declined by 8,167. Note in the same time frame open interest in WTI increased by 8.537. Both numbers are bearish.

Natural gas:

July natural gas advanced 4.5 cents on volume of 531,432 contracts. Volume declined from June 9 when the July contract gained 14.1 cents on volume of 571,795 contracts and total open interest declined by 9,213. On June 10, increased by 9,831 contracts, which relative to volume is approximately 25% below average, but the July contract lost 22,025 of open interest, which makes the total open interest increase by more impressive (bullish).

For the past three sessions beginning on June 8, July natural gas has advanced 30.1 cents while total open interest has increased just 3,059 contracts in this time frame. This is bearish open interest action relative to the strong advance. As this report is being compiled on June 11, after the release of the EIA storage report, the July contract is trading 6.1 cents lower and has made a daily low of 2.818, which is below yesterday’s print up 2.825. Additionally, today’s low is substantially below OIA’s key pivot point for the generation of short and intermediate term buy signals.

The Energy Information Administration announced that working gas in storage was 2,344 Bcf as of Friday, June 5, 2015, according to EIA estimates. This represents a net increase of 111 Bcf from the previous week. Stocks were 753 Bcf higher than last year at this time and 44 Bcf above the 5-year average of 2,300 Bcf. In the East Region, stocks were 106 Bcf below the 5-year average following net injections of 62 Bcf. Stocks in the Producing Region were 93 Bcf above the 5-year average of 888 Bcf after a net injection of 36 Bcf. Stocks in the West Region were 57 Bcf above the 5-year average after a net addition of 13 Bcf. At 2,344 Bcf, total working gas is within the 5-year historical range.

Dollar index: On June 10, the September dollar index generated a short-term sell signal after generating an intermediate term sell signal on June 4.

The September dollar index lost 52.1.points extremely heavy volume of 124,064 contracts. Volume was the strongest since March 13, 2015 when 122,322 contracts were traded and the September dollar index closed at 100.717. On June 10, total open interest increased by a substantial 3,257 contracts, which relative to volume is average.The June contract lost 14,179 of open interest, and there were large numbers of new short-sellers entering the September and December contracts to offset the loss in the June contract and increase total open interest to an average number.

For the past three sessions beginning on June 8 the dollar index has fallen 1.710 points while total open interest has increased each day and totals 5,841 contracts. As this report is being compiled on June 11, the September dollar index is rallying, which is typical after the generation of a sell signal. We may see another day or two of advances, and then a resumption of the downtrend.

Euro:

The September euro advanced 35 pips on very heavy volume of 582,800 contracts. Volume was the strongest since March 12 when 596,937 contracts were traded and the September euro closed at 1.0610.On June 10, total open interest increased by a massive 30,329 contracts, which relative to volume is approximately 105% above average, which is an astoundingly high number. The June contract lost 78,891 of open interest, which means there were sufficient open interest increases in the September and December contracts to offset the decline in June and substantially increase total open interest.

For the past three sessions beginning on June 8 the euro has advanced 1.97 cents while total open interest has increased by 45,207 contracts. This is extremely bullish open interest action, and also confirms that short sellers are not liquidating on the rally. New buyers are powering the euro advance. As this report is being compiled on June 11, the September contract is trading 75 pips lower. On June 4, the September euro generated short and intermediate term buy signals. We expect the up trend to continue.

British Pound:

The September British pound advanced 1.53 cents on very heavy volume of 276,746 contracts. Volume was the strongest since March 11 when 291,458 contracts were traded and the September pound closed at 1.4924.On June 10 total open interest increased by 2,603 contracts, which relative to volume is approximately 50% below average. However, the June contract lost 56,102 of open interest, which means there was sufficient open interest increases in the September and December contracts to offset the decline in June. As this report is being compiled on June 11, the September contract is trading 30 pips lower. The September pound remains on a short-term sell signal, but an intermediate term buy signal.

Australian dollar:

The September Australian dollar advanced 77 pips on heavy volume of 211,679 contracts. Volume was the strongest since March 11 when 224,893 contracts were traded and the September Australian dollar closed at 75.35. On June 10, total open interest increased by a massive 15,865 contracts, which relative to volume is approximately 185% above average, which is an astoundingly high number.

The June contract accounted for loss of 30,993 of open interest, which means there was more than enough open interest increases in the September and December contracts to offset this and still increase total open interest dramatically above average.The September Australian dollar remains on a short and intermediate term sell signal.

Yen:

The September yen advanced 110 pips on extremely heavy volume of 429,723 contracts. Volume was the strongest of 2015 and took out the December 2014 volume high of 425,661 contracts traded on December 10, 2014 when the yen closed at .8489.On June 10, total open interest increased by 19,177 contracts, which relative to volume is approximately 75% above average meaning aggressive new buyers were entering the market in large numbers and driving prices higher (.8174). The June contract accounted for loss of 41,516 contracts, which means there was more than enough open interest increases in September and December contracts to offset this decline and dramatically increase total open interest.

As this report is being compiled on June 11, the September contract has reversed course and is trading 62 pips lower. The September yen remains on a short and intermediate term sell signal.

Coffee: This will be our last report on coffee until we announce a signal change or see a trading opportunity.

July coffee lost 90 ticks on heavy volume of 56,764 contracts. Volume was the strongest since April 14 when 61,662 contracts were traded and July coffee closed at 1.3665. On June 10, total open interest declined by 624 contracts, which relative to volume is approximately 50% below average. The July contract lost 6125 of open interest.

As this report is being compiled on June 11, the July contract has closed sharply lower, down 4.45 cents, or -3.26%. For while it looked like coffee was finally getting out of the doldrums and could generate a short-term buy signal. Today’s action is a major disappointment and July coffee remains on a short and intermediate term sell signal.

From the June 9 report:

“Although we thought it was likely coffee would generate a short-term buy signal today, the daily low of 1.3 555 is slightly below OIA’s key pivot point for June 10 of 1.3564.”