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Soybeans:

July soybeans advanced 8.75 cents on volume of 307,400 contracts. Total open interest declined by 5,395 contracts, which relative to volume is approximately 25% below average, but June 18 was the third day in a row that soybean prices advanced and total open interest declined. The July contract lost 19,816 of open interest. From June 16 through June 18 the July contract has gained 40.00 cents while total of an interest has declined by 14,248 contracts.

In summary there has not been sufficient open interest increases in the forward months to offset declines in the July contract. This confirms that potential market participants are unwilling to make commitments at ever higher prices. As this report is being compiled on June 19, the July contract is trading 3.50 cents lower. On June 17, July soybeans generated a short-term buy signal, but remains on an intermediate-term sell signal. Since generating the short-term buy signal, the market has yet to have a pullback, but perhaps this will begin today. Although prices can continue their ascent, we think the rally is on borrowed time.

Soybean oil: On June 18, July and August soybean oil generated a short-term sell signal, but remain on intermediate term buy signal.

July soybean oil lost 60 points on volume of 128,981 contracts. Total open interest declined by 4,409 contracts, which relative to volume is approximately 20% above average, meaning that liquidation was heavier than normal on yesterday’s decline. The July contract lost 6,533 of open interest.Now that soybean oil is on a short-term sell signal, the market should have a countertrend rally lasting 1-3 days and this will be the opportunity to initiate bearish positions.As this report is being compiled on June 19, the July contract is trading 27 points above yesterday’s close.

Soybean meal: The July contract will generate an intermediate term buy signal on June 19 if the low of the day is above OIA’s key pivot point for June 19 $320.00. On June 16 the July contract generated a short-term buy signal.

July soybean meal gained $2.90 on volume of 110,266 contracts. Total open interest declined by 1,517 contracts, which relative to volume is approximately 40% below average. The July contract accounted for loss of 6,609 of open interest and there were sufficient open interest increases in the forward months to offset a good portion of the open interest decline in July. Having said that, it is a bit disappointing that open interest didn’t increase as soybean meal prices moved to a new high 2 1/2 month for the move of 328.30, which takes out the previous high of 327.60 made on April 6.

Corn:

July corn lost 1.25 cents on volume of 403,630 contracts. Total open interest declined by 10,417 contracts, which relative to volume is average. The July contract lost 24,452 of open interest. As this report is being compiled on June 19, the July contract is trading 4.75 cents lower and has made a daily low of 3.51 3/4, which is the lowest print since 3.47 1/2 made on June 16.

From the June 17 report:

“Corn does not have the animal spirits and willing participants to trade significantly higher and has not been able to touch the key pivot point for the generation of a short-term buy signal, let alone make a daily low above it For a short-term buy signal to occur, the low of the day must be above OIA’s key pivot point 3.62 3/8.”

Chicago wheat:

July Chicago wheat lost 3.25 cents on volume of 152,083 contracts. Total open interest increased by a massive 11,841 contracts, which relative to volume is approximately 210% above average meaning aggressive new short-sellers were entering the market and driving prices lower (4.87 1/4). The July contract lost 5898 of open interest.

As this report is being compiled on June 19, the July contract is trading 1.50 cents above yesterday’s close and has made a daily high of 4.92 1/4, which is slightly above OIA’s key pivot point of 4.92 for the generation of a short term sell signal. The high of the day must be below the pivot point. On June 16, July Chicago wheat generated an intermediate term sell signal.

Live cattle: It appears likely that August live cattle will generate a short-term sell signal on June 19.

August live cattle lost 1.30 cents on volume of 42,580 contracts. Total open interest declined by 3,445 contracts, which relative to volume is approximately 220% above average meaning that liquidation was extremely heavy on yesterday’s decline. The June contract lost 1,011 of open interest, August -4,245.

As this report is being compiled on June 19 the August contract is trading 35 points higher and has made a daily high of 1.50050, which is below OIA’s key pivot point for June 19 for the generation of a short-term sell signal. If the daily high remains below the pivot point of 1.50175, a short-term sell signal will be generated in the August contract. The market has been trading poorly for quite some time and we have advised clients to take a stand aside posture and for those who wanted to be involved to write out of the money calls.

WTI crude oil:

July WTI crude oil advanced 53 cents on volume of 530,324 contracts. Total open interest declined by 12,469, which relative to volume is approximately 10% below average, but an open interest decline on yesterday’s price advanced is bearish. The July contract accounted for loss of 20,530 open interest. As this report is being compiled on June 19, the August contract is trading $1.54 lower and has made a daily low of 59.24, which is the lowest print since 59.19 made on June 15.On May 20, the August contract generated a short-term sell signal, but remains on intermediate-term buy signal.

From the June 17 report:

“As this report is being compiled on June 18, the July contract is trading 48 cents above yesterday’s close and has made a daily high of 60.89, which is below yesterday’s print of 61.38.The market was unable to take out the June 11 high of 61.53, which was made on a large spike in volume, and has become a major point of resistance for the July contract.”

Gold: August gold will generate a short-term buy signal if the daily low on June 19 is above OIA’s key pivot point for June 19 of $1197.80. August gold remains on intermediate term sell signal.

August gold advanced $25.20 on heavy volume of 201,309 contracts. Volume was the strongest since May 28 when 210,342 contracts were traded and the August contract closed at $1188.80. On June 18, total open interest increased by 2,641 contracts, which relative to volume is approximately 45% below average.

As this report is being compiled on June 19 August gold is trading 90 cents lower on the day. It is difficult to get bullish side about higher gold prices, especially when silver is nowhere near to generating a short-term buy signal. The total increase of open interest was substantially below average, indicating a lack of enthusiasm on the part of potential market participants. We advise a stand aside posture.

Dollar index: This will be our last report on the dollar index until we announce the signal change or see a trading opportunity. On June 4, the September dollar index generated an intermediate term sell signal and a short term sell signal on June 10.

The September dollar index lost 24.9 points on volume of 53,253 contracts. Total open interest declined by 1,521 contracts, which relative to volume is average. As this report is being compiled on June 19, the September contract is trading 12.9 points higher on the day.

Euro:

The September euro gained 36 pips on volume 269,940 contracts. Total open interest increased by 916 contracts, which relative to volume is approximately 85% below average, however an open interest increased on yesterday’s advance is positive. Yesterday, the September contract made new high for the move of 1.1450, which is the highest print since 1.1467 made on May 18.

This high was made on a spike of volume on the 15 minute chart of 16,957 contracts, which may represent a top or temporary top. Clients should note this high and the accompanying volume surge. Since then the market has drifted lower and has broken below 1.1352, the low which also was made on a spike in volume of 20,801 contracts on the 15 minute chart. For now, the path of least resistance appears to be downward. On June 4, the September euro generated a short and intermediate term buy signal.

From the June 18 report:

“Although, the euro is on short and intermediate term buy signals, we see the rally as essentially a blowout of the spec massive short position and once this is complete, we expect the market to resume its downtrend.”

British Pound:

September British pound advanced 44 pips on volume of 109,563 contracts. Total open interest increased by an astounding 10,437 contracts, which relative to volume is approximately 300% above average meaning huge numbers of new buyers were entering the market and driving the September contract to a new 2015 high of 1.5924, which is the highest print since the week of November 10, 2014 when the December 2014 contract made a high of 1.5942. On, June 16, the September pound generated a short-term buy signal and has been on an intermediate term buy signal.

The massive increase of open interest in yesterday’s trading as the pound advanced to multi-month highs is a red flag, and may indicate that it is near a top or temporary top. The Johnny-come-lately’s of the world were entering the market and this is generally a negative sign, at least in the short term. This afternoon, the COT report will be released and we will get a glimpse into the extent that professional money managers have increased their net long positions.

Canadian dollar: On June 18, the September Canadian dollar generated a short-term buy signal and remains on intermediate term buy signal.

The September Canadian dollar lost 2 pips on volume of 74,201 contract. Total open interest declined by 2,360, which relative to volume is approximately 10% above average, meaning that liquidation was fairly heavy on essentially an unchanged close. As this report is being compiled on June 19, the September contract is trading 20 pips lower and has made a daily high of 81.76, which is substantially below yesterday’s high of 82.35.

S&P 500 E mini:

The September S&P 500 E mini gained 25.50 points on volume of 2,333,862 contracts. Total open interest increased by 54,131, which relative to volume is approximately 10% below average. Yesterday, the September contract made a high of 2119.25, which is the highest print since 2119.00 made on May 25.

Despite the sharp move higher in yesterday’s trading, the September contract did not generate a short-term buy signal, which would have reversed the short term sell signal of June 8. As this report is being compiled on June 19, the September contract is trading 6.50 points lower and has made a daily high of 2117.75, which is below yesterday’s high and a low of 2105.25. This is below OIA’s key pivot point for the generation of a short-term buy signal of 2107.70.The daily low must be above the pivot point.