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The USDA will release its quarterly grain stocks and acreage report on June 30 at 11:00 a.m. CDT.

Open interest declines in soybeans, soybean meal, corn and wheat all increased in the final report from the preliminary report. In summary, there was more liquidation in the grains in the final report than indicated in the preliminary.

Soybeans:

August soybeans advanced 10.75 cents on total volume of 466,105 contracts.Volume traded on June 26 was the highest of 2015 and took out the previous high volume day of 431,175 contracts traded on February 24 when the August 2015 contract closed at 10.21.

On June 26, total open interest declined by a massive 38,658 contracts, which relative to volume is approximately 230% above average.The July contract lost 32,900 of open interest and November 2015 -16,743. As this report is being compiled on June 29, the August contract is trading 1.25 cents higher and has made a daily high of 10.08, which is below Friday’s high of 10.11 3/4.

According to the latest COT report, managed money moved to a net long position, but again this was due to the massive liquidation of short positions, rather than the substantial addition of long positions.Undoubtedly there will be more position squaring today, and it will take a major change in the outlook going forward to change the underlying bearish dynamics of the market. August soybeans remain on a short and intermediate term buy signal.

Soybean oil:

August soybean oil lost 14 points on volume of 163,604 contracts. Total open interest declined by 6,553 contracts, which relative to volume is approximately 55% above average meaning that liquidation was heavy on the modest decline. The July contract accounted for loss of 10,166 of open interest. For those of you who took our recommendation to initiate light bearish positions per the June 23 report, the position is moderately profitable, and we recommend lowering the exit point to slightly above 33.84, which was the high made on Friday the 26th. As indicated in the weekend report, we are a bit concerned that canola is making new contract highs and canola oil is a competitor to soybean oil.

From the June 23 report:

“On June 18, August soybean oil generated a short-term sell signal, and as is typical after a sell signal, a counter trend rally ensues, which lasts from 1-3 days. Today, is the third day of the counter trend rally and this should be the extent of it. We recommended the initiation of bearish positions on rallies and would take advantage of today’s move to initiate a light bearish position. This should be exited upon the penetration of the June 11 high of 34.07.”

Soybean meal:

August soybean meal advanced $4.30 on strong volume of 158,458 contracts. However, volume was below that of June 23 when soybean meal lost 1.70 on volume of 166,571 contracts (which was the highest volume of 2015) and total open interest increased by 9,162 contracts.On June 26, total open interest declined by massive 15,993 contracts, which relative to volume is approximately 300% above average meaning liquidation was extremely heavy on the advance. The July contract lost 17,007 of open interest and there were negligible open interest increases in the forward months.

As this report is being compiled on June 29, the August contract is trading 90 cents higher on the day after making a daily high at 338.80, which is below Friday’s print of 341.60. August soybean meal remains on a short and intermediate term buy signal.

Corn: On June 26, September corn generated an intermediate term buy signal after generating a short term buy signal on June 25.

September corn advanced 9.75 cents on the astoundingly large volume of 796,786 contracts.Volume traded on June 26 was the highest of 2015 and took out the previous high-volume day of 699,375 contracts traded on June 10 (the day of the WASDE report).

On June 26, total open interest declined by a massive 56,927 contracts, which relative to volume is approximately 185% above average meaning liquidation was extremely heavy on the strong advance.The July contract accounted for loss of 56,282 of open interest, December 2015 -2647 and there were negligible open interest increases in the forward months. In short, new longs on Friday’s rally were almost nonexistent. As this report is being compiled on June 29, September corn is trading 1.50 cents higher after making a daily high 3.99 1/2, which is fractionally above Friday’s print of 3.97. 

Chicago wheat: On June 26, September Chicago wheat generated an intermediate term buy signal and remains on the short-term buy signal.

September Chicago wheat advanced 30.00 cents on huge volume of 351,063 contracts. Volume traded on June 26 was the highest of 2015 and took out the previous high-volume day made on June 10 (WASDE) of 293,031 contracts when wheat lost 18.75 cents and total open interest declined by 6,848 contracts.

On June 26, total open interest declined by massive 26,265 contracts, which relative to volume is approximately 210% above average meaning liquidation was extremely heavy on Fridays major advance. The July contract accounted for loss of 23,356 of open interest, September 2015 -3,612.

The latest COT report showed managed money is massively net short Chicago wheat and the tabulation date for the report was June 23. Since then from June 24 through June 26 wheat has advanced 41.00 cents, which means it is likely large numbers of short-sellers are getting blown out of the market and powering the market higher. As this report is being compiled on June 29, the September contract is trading 15.00 cents higher has made daily high of 5.91 1/2, which is the highest print since 5.93 made on January 8, 2015.

Live cattle: On June 26, August live cattle generated a short-term sell signal, but remains on an intermediate term buy signal.

August live cattle lost 5 points on light volume 38,817 contracts. Though volume was light, the open interest decline was extremely heavy with total open interest losing 3,859, which relative to volume is approximately 300% above average. The June contract lost 1,249 of open interest, August 2015 -3,560, December -247.

As this report is being compiled on June 29, the August contract is advancing 1.725 cents. Usually, after the generation of a sell signal, the market has a tendency to rally from 1-3 days and this is the opportunity to initiate bearish positions. We expect another day or two of advancing prices before August resumes its downtrend. If total open interest declines on today’s rally, we would likely recommend bearish positions tomorrow or possibly the day after.

Cotton: December cotton will generate a short-term buy signal on June 29 if the daily low as above OIA’s key pivot point for June 29 of 65.57.

December cotton advanced 2.13 cents on volume of 46,245 contracts. Total open interest increased by massive 8,831 contracts, which relative to volume is approximately an astounding 475% above average meaning huge numbers of new buyers were entering the market and driving prices to a new high for the move of 67.63. As this report is being compiled on June 29, December cotton is trading 3 points higher and has made a daily high of 67.80, which is the print since 67.60 made on April 27 for the May 2015 contract.

WTI crude oil:

August WTI crude oil lost 7 cents on light volume of 382,959 contracts. Volume was slightly above that of June 25 when 376,279 contracts were traded and the August contract lost 57 cents while total open interest increased by 7,269.On June 26, total open interest increased by 7,434 contracts, which relative to volume is approximately 20% below average, but this is the second day in a row in which prices declined and open interest increased.

As this report is being compiled on June 29, the August contract is trading $1.19 lower and has made a daily low of 58.04, which is the lowest print since 57.86 made on June 8. August WTI remains on a short term sell signal, but an intermediate term buy signal.

S&P 500 E mini: On June 29, it appears to be a certainty the September S&P 500 E mini will generate a short-term sell signal, and appears to be heading for an intermediate term sell signal, which may occur tomorrow.

The September S&P 500 E mini gained 1.75 points on volume of 1,325,260 contracts. Total open interest declined by 6,069 contracts. As this report is being compiled on June 29, the September contract is trading 31.75 points lower and has made a daily low of 2054.00, which is slightly below 2057.00 made on May 7 by the June contract.

The market has been trading in a consolidation pattern for most of 2015, but has been weakening steadily with a large numbers of stocks trading substantially below their 52-week highs. The situation in Greece has only exacerbated the downtrend in a market that was already looking tired.