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Soybeans:

July soybeans closed unchanged on volume of 242,341 contracts. Total open interest declined by 6949 contracts, which relative to volume is average. The July contract lost 21,359 of open interest. On Friday, the July contract made a low of 9.33 1/4, and this has been taken out on July 15 (9.30 1/4), which is the lowest print since the low of 9.25 1/4 made on June 2.

As this report is being compiled on June 15, the July contract is trading 3.25 cents lower and selling will accelerate if the daily high is below OIA’s key pivot point for June 15 of 9.35 7/8.This will set up a test of the 9.20 1/2 contract low made on May 26. Our concern about this occurring is increasing due to the consistent weakness of soybean oil for the past several days, which was the one bright spot in the soybean complex. July soybeans will generate a short-term buy signal if the low of the day is above OIA’s key pivot point for June 15 of 9.49 5/8.

Soybean oil:

July soybean oil lost 15 points on volume of 155,460 contracts. Total open interest declined May 2,567 contracts, which relative to volume is approximately 35% below average. The July contract lost 6,464 of open interest.As this report is being compiled on June 15, the July contract is trading 62 points lower, down 1.87% versus soybeans -0.35% and soybean meal -2.14%. From June 8 through June 12 (five days) soybean oil has closed lower and it appears likely that a sixth lower close is on the horizon for June 15.

This is troubling because the July contract is getting close to generating a short-term sell signal, which will occur if the daily high is below OIA’s key pivot point for June 15 of 32.67. A close today below this pivot point would set up a potential short-term sell signal in tomorrow’s trading. Today’s low of 32.47 is the lowest print since 31.99 made on May 29.

According to the most recent COT report released last Friday, managed money is long soybean oil by a ratio of 3.63:1, which is more than double the ratio of two weeks ago of 1.60:1. Despite the decline of open interest for the past 5 days, there are probably substantial numbers of speculators who have yet to liquidate, which will further pressure prices.

Corn:

July corn lost 3.50 cents on heavy volume of 471,094 contracts. Volume declined from June 11 when the July contract lost 0.75  cents on volume of 547,147 contracts and total open interest declined by 225. On June 12, total open interest declined by 7,148 contracts, which relative to volume is approximately 40% below average, however, the July contract lost 31,778 of open interest, which means there were sufficient open interest increases in the forward months to reduce total open interest substantially below average. We consider the action on June 12 to be bearish.

As this report is being compiled on June 15, the July contract is trading lower again, down 5.25 cents and is near to making a new contract low, which will occur if July breaks below 3.47, the contract low made on October 1, 2014. It appears likely the market is headed for a test of the continuation contract below of 3.18 1/4 made on October 1 by the December 2014 contract. The major USDA report will be issued at the end of June, and there is nothing to buffer corn from continuing lower until four or five days prior to the June report. In order for the July contract to generate a short-term buy signal,, the low of the day must be above OIA’s key pivot point for June 15 of 3.62 7/8.

From the June 11 report:

“July corn remains on a short and intermediate term sell signal, and we think the selling will accelerate if the July contract makes a daily high below OIA’s key pivot point for June 12 of 3.56 3/8. The high for June 12 has been 3.56 3/4, which is close enough to be concerned about increased selling pressure and downside momentum.”

Chicago wheat:

July Chicago wheat lost 0.50 cents on volume of 111,192 contracts. Total open interest increased by 4,505 contracts, which relative to volume is approximately 55% above average meaning that a battle ensued between buyers and sellers and sellers were able to edge the market fractionally lower. The July contract accounted for loss of 4,814 of open interest.

As this report is being compiled on June 15, the July contract is trading sharply lower, down 16.25 cents or -3.23%. Although, we thought there was a possibility of a test of the June 10 high (5.37 1/2), the WASDE report put the nail in that idea. It appears likely that short and intermediate term sell signals will be generated tomorrow. For a short-term sell signal to occur, the high of the day must be below OIA’s key pivot point for June 15 of 4.92 3/4. An intermediate term sell signal will be generated if the high of the day is below OIA’s key pivot point for June 15 of 5.03 1/4.

Live cattle: This will be our last report on live cattle until we announce a signal change or see a trading opportunity. August live cattle remains on a short and intermediate term buy signal.

August live cattle lost 2.125 cents on volume of 54,698 contracts. Total open interest declined by massive 7,655 contracts, which relative to volume is approximately 420% above average meaning that liquidation was off the charts heavy. The June contract lost 2,965 open interest, August -5,368, October 2015 -43.

The open interest decline in the August contract is the largest seen in many months. As we have pointed out in previous reports and emphasized it again in the June 14 weekend report, it is apparent that spec longs are becoming disillusioned with the market and are heading for the exits and the COT stats confirm this(see the June 14 Weekend Wrap). As this report is being compiled on June 15, the August contract is trading nearly unchanged on the day and has made a daily high of 1.51100, which is substantially below Friday’s high of 1.52700. At this juncture, we see no reason to be involved in the market.

WTI crude oil:

July WTI crude oil lost 81 cents on light volume of 512,150 contracts. Volume was the smallest since May 22, the day before the Memorial Day holiday when 419,185 contracts were traded and the July contract closed at 59.72.On June 12, total open interest increased by 446 contracts, which is minuscule and dramatically below average. The July contract accounted for a loss of 13,022 of open interest.

For the past two days the July contract lost $1.47 and total open interest increased by only 10,906, which indicates a reluctance on the part of new short-sellers to become very aggressive. As this report is being compiled on June 15, the July contract is trading 48 cents lower has made a daily low of 58.73, which is the lowest print since 58.23 made on June 9.

On May 20, the July contract generated a short-term sell signal, but has been unable to generate an intermediate term sell signal. Basically the market has been trading in a consolidation zone bounded by the low $60 area and the mid-$50 range.We see no compelling reason to be involved in the market.

Dollar index:

The September dollar index lost 9.9 points on heavy volume of 119,591 contracts.Volume increase from June 11 when the dollar index advanced 30.5 points on volume of 103,084 contracts and total open interest declined by 978. On June 12, total open interest increased by 101 contracts, a dramatically below average number. However, the June contract accounted for loss of 17,209 of open interest, which means there were sufficient open interest increases is the September and December contracts to offset the decline in June.

We consider Friday’s action to be bearish. As this report is being compiled on June 15, the September contract is trading 10.2 points lower, but has not taken out Friday’s low of 94.970. On June 4, the September dollar index generated an intermediate term sell signal and a short term sell signal on June 10.

Euro:

The September euro lost 20 pips on heavy volume of 399,726 contracts. Volume was substantially below that of June 11 when the September contract lost 53 pips on volume of 570,461 contracts and total open interest increased by 2,864. On June 12, total open interest declined by 5.353 contracts, which relative to volume is approximately 40% below average. However, the June contract accounted for loss of 33,356 of open interest, which means there was sufficient open interest increases in the September and December contracts to reduce total open interest substantially below average.

We consider the open interest action on June 12 to be bearish. As this report is being compiled on June 15, the September contract is trading 12 pips higher and has made a daily high of 1.1303, which is below Friday’s print of 1.1312.On June 4 the September euro generated a short and intermediate term buy signal. We continue to see higher prices ahead, and the market has been acting extremely well considering the chaotic situation between Greece and the ECB.

British Pound:

The September British pound gained 35 pips on heavy volume of 132,734 contracts. Volume declined from June 11 when the September contract lost 8 pips on volume of 171,374 contracts and total open interest increased by 7,579 contracts.On June 12, total open interest increased by 2,847 contracts, which relative to volume is approximately 20% below average, however the June contract lost 7,629 of open interest, which means there were sufficient open interest increases in the September and December contracts to offset the decline in June and increase total open interest.

On June 10, the September pound advanced 1.53 cents on huge volume of 276,746 contracts and total open interest increased by 2603 contracts. On June 10, the June contract lost 56,102 of open interest, and the fact that total open interest increased is extremely positive. As this report is being compiled on June 15, the September contract is trading 38 pips higher and trading slightly below Friday’s high of 1.5588. It appears the September contract is headed for a short-term buy signal and it remains on intermediate term buy signal. A strong pound and euro would continue to apply considerable down side pressure to the dollar index.

Copper: On June 12, July copper generated an intermediate term sell signal after generating a short term sell signal on May 26.

July copper advanced 90 ticks on volume of 59,152 contracts. Total open interest declined by 611 contracts, which relative to volume is approximately 50% low average. The July contract lost 3702 of open interest. As this report is being compiled on June 15, July copper has made a new low for the move of 2.6255, which is the lowest print since $2.5965 made on March 19, 2015.We have no recommendation.