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Soybeans:

August soybeans lost 3.25 cents on volume of 282,766 contracts. Total open interest declined by 5,447 contracts, which relative to volume is approximately 20% below average. The July contract accounted for a loss of 19,471 of open interest. As this report is being compiled on June 30 prior to the release of USDA report, the August contract is trading 2.25 cents lower and has made a daily high of 9.97 1/2, which is below yesterday’s high of 10.08 and the high for the move of 10.11 3/4 made on June 26. August soybeans remain on a short and intermediate term buy signal.

Soybean oil:

August soybean oil lost 20 points on volume of 142,337 contracts. Total open interest declined by massive 15,365 contracts, which relative to volume is approximately 320% above average meaning liquidation was extremely heavy on the modest decline. Accounting for the large total decline of open interest was the July contract, which lost 16,521 of open interest. As this report is being compiled on June 30, prior to the release of the USDA report, the August contract is trading unchanged on the day. Maintain the light bearish positions previously recommended and exit above the 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 lost 80 cents on volume of 125,507 contracts. Total open interest declined by 8,337 contracts, which relative to volume is approximately 160% above average meaning liquidation was heavy on the modest decline. Accounting for this was the open interest decline in the July contract of 14,830. As this report is being compiled on June 30 prior to the release of the USDA report, August meal is trading 30 cents higher and has made a daily high at 336.40, which is below yesterday’s high of 338.80 and the high for the move of 341.60 made on June 26. August soybean meal remains on a short and intermediate term buy signal.

Corn:

September corn lost 0.50 cents on heavy volume of 618,445 contracts. Volume declined substantially from June 26 when September corn advanced 9.75 cents on volume of 796,786 contracts and total open interest declined by 56,927. On June 29, total open interest declined by massive 44,752, which relative to volume is approximately 185% above average meaning liquidation was extremely heavy on the fractional decline.

Accounting for the large total open interest decline was the July contract, which lost 49,348 of open interest, December 2015 -916. As this report is being compiled on June 30 prior to the release of the USDA report September corn is trading 0.75 cents lower and has made a daily high at 3.96 3/4, which is below yesterday’s high for the move of 3.99 1/2. September corn remains on a short and intermediate term buy signal.

Chicago wheat:

September Chicago wheat advanced 18.25 cents on heavy volume of 274,573 contracts. Volume declined from June 26 when the September contract gained 30.00 cents on huge volume of 351,063 contracts and total open interest declined by 26,265. On June 29, total open interest declined by 9,527 contracts, which relative to volume is approximately 20% above average, and is negative considering the magnitude of yesterday’s move.

The July contract accounted for loss of 17,540 of open interest. As this report is being compiled prior to release of the USDA report on June 30, the September contract is trading 4.25 cents lower and has made a daily high of 5.88 1/2, which is below yesterday’s high for the move of 5.91 1/2. September Chicago wheat remains on a short and intermediate term buy signal.

Live cattle:

August live cattle gained 1.35 cents on light volume of 39,812 contracts. Though volume was light, the open interest decline was massive at 3,356 contracts, which relative to volume is approximately 230% above average meaning liquidation was extremely heavy on yesterday’s strong advance. The June contract lost 1,024 of open interest, August 2015 -2242, December 2015 -774.

Yesterday’s action was extremely negative and confirms the down trend. On June 26, the August contract generated a short-term sell signal, and as we said in yesterday’s report, we expected the market to have a counter trend rally that lasted from 1-3 days and this would be the opportunity to initiate bearish positions. Unfortunately, the market has been unable to rally for a second day and currently is trading 60 points lower after making a daily high of 1.50500, which is fractionally above yesterday’s high of 1.50450.

We recommend that clients maintain a stand aside posture and wait for a rally near to the highs of yesterday and today before initiating bearish positions. However, the market is weak and a decent size rally may not materialize.

From the June 26 report:

“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: On June 29, December cotton generated a short-term buy signal and remains on intermediate term buy signal.

December cotton lost 20 points on volume of 27,300 contracts. Total open interest increased by 1,336 contracts, which relative to volume is approximately 75% above average. As this report is being compiled on June 30, the December contract is trading 9 points lower and has made a daily high is 67.40, which is below yesterday’s high for the move of 67.80.

WTI crude oil:

August WTI crude oil lost $1.30 on surprisingly light volume of 460,093 contracts. Total open interest increased by 3,019 contracts, which relative to volume is approximately 60% below average. June 29 was the third day in a row in which WTI prices declined and open interest increased, although open interest increases have been on the light side indicating a lack of strong commitment to bearish positions. The August contract lost 562 of open interest.

As this report is being compiled on June 30 the August contract is trading 66 cents higher after making a daily low at 57.94, which is below yesterday’s print of 58.04.The August contract remains on a short term sell signal, but an intermediate term buy signal.

Dollar index:

The September dollar index lost 70.1 points on heavy volume of 75,022 contracts. Total open interest declined by a hefty 3,136 contracts, which relative to volume is approximately 55% above average meaning liquidation was heavy on the decline. This should be expected on a price decline and is not bearish. As this report is being compiled on June 30 the September contract is trading 73 points higher and has made a daily high 95.885, which is below yesterday’s high of 96.695. The September contract 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 key pivot point for June 30 of 96.300.

Euro:

The September euro gained 93 pips on heavy volume of 373,879 contracts. Total open interest increased by 6,328, which relative to volume is approximately 35% below average, but an open interest increase on yesterday’s price advance is bullish. The market had a massive range and the trade from high to low was 3.30 cents.

That total open interest increased was a bit of a surprise to us because our thinking was the massive range day would have blown out longs on the downside and shorts on the upside. As this report is being compiled on June 30 the September contract is trading 1.10 cents lower and has made a daily high of 1.1256, which is below yesterday’s high of 1.1292.

Although, the euro remains on a short and intermediate term buy signal, it looks increasingly vulnerable to generating a short term sell signal. For this to occur, the high of the day must be below OIA’s key pivot point for June 30 of 1.1127. For the rally to continue and possibly challenge the June 18 high of 1.1450 and the May 15 high of 1.1485, the low of the day must be above OIA’s key pivot point for June 30 of 1.1273. It appears that the May 15 and June 18 highs may have formed a double top.

Yen

The September yen advanced 92 pips on volume of 165,662 contracts. Total open interest increased by 2,605 contracts, which relative to volume is approximately 40% below average, however, an open interest increase in yesterday’s trade is positive and a big surprise. The reason: managed money is massively short the yen by a ratio of 7.00:1 according to the most recent COT report.

In summary, short sellers were not powering the market higher yesterday, rather it was new buyers. This spells potential trouble for spec shorts because the September contract is getting close to generating a short term buy signal. For this to occur, the low of the day must be above OIA’s key pivot point for June 30 of .8175. As this report is being compiled on June 30, the September contract is trading 13 pips higher and has made a daily high of .8208, which is above yesterday’s print of .8197.

S&P 500 E mini: On June 29, the September S&P 500 E mini generated a short term sell signal, and will likely generate an intermediate term sell signal on June 30.

The S&P 500 E mini lost 45.25 points on heavy volume of 2,295,930 contracts. Volume was the strongest since June 18 when the E mini advanced 25.50 points on volume of 2,333,862 contracts and total open interest increased by 54,131.On June 29, total open interest increased by massive 88,489 contracts, which relative to volume is approximately 25% above average meaning large numbers of new short-sellers were entering the market and driving prices to a new low for the move 2047.25, which is lowest print since 2049.75 made on May 7.

As this report is being compiled on June 30, the September contract is trading 1.50 points higher and has made a daily low of 2046.75, slightly below yesterday’s print. We are surprised the market has not had more of a bounce today after yesterday’s sell signal. Usually, after the generation of the sell signal, the market has a counter trend rally, which lasts from 1-3 days. The high for the day on June 30 has been 2069.00, which is below OIA’s key pivot point of 2073.30, and this means if the E mini continues to trade below today’s pivot point, an intermediate term sell signal will be generated.  If this is the case, the E mini should have a rally in tomorrow’s trade and close higher on the day.