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Soybean oil:

July soybean oil advanced 56 points on volume of 135,191 contracts. Total open interest increased by a massive 9,529 contracts, which relative to volume is approximately 185% above average meaning that aggressive new buyers were entering the market in large numbers and driving prices higher (34.88), which is below the high of 34.94 made on June 2. The July contract gained 5,989 of open interest, which is a positive factor short-term.

It appears that soybeans may be coming to life after being in a steady downtrend for the past couple of months, and this should provide additional support to soybean oil. Also, the July soybean contract is getting closer to generating a short-term buy signal, and the key pivot point for buy signal on June 4 is 9.60 1/4. As this report is being compiled on June 4, the July contract is trading 19 points lower on the day. On April 16 July soybean oil generated a short-term buy signal and an intermediate term buy signal on May 5.

Chicago wheat:

July Chicago wheat lost 1.75 cents on very heavy volume of 184,528 contracts. Volume was the strongest since May 27 when the July contract lost 5.75 cents on volume of 179,894 contracts and total open interest declined by 1,090. On June 3, total open interest declined 2,303 contracts, which relative to volume is approximately 45% below average. The July contract accounted for loss of 7,125 open interest.

All in all, the performance yesterday was more than respectable considering the fact that wheat made an intra-day high of 5.26 1/4 and proceeded to sell off into the close. As this report is being compiled on June 4, the July contract is trading 9.25 cents above yesterday’s close and has made a daily high of 5.22. On May 15, July Chicago wheat generated a short-term buy signal and for an intermediate term buy signal to be generated the daily low must be above OIA’s key pivot point for June 4 of 5.17. 

Live cattle:

August live cattle lost 1.375 cents on volume of 54,744 contracts. Total open interest declined by massive 5,619, which relative to volume is approximately 305% above average meaning liquidation was extremely heavy on the decline. The June contract lost 5,607 of open interest, August 2015 -697.

This is positive open interest action because liquidation is a normal activity on a price declines, especially after open interest has increased on price advances. As this report is being compiled on June 4, the August contract is trading 1.050 cents higher on the day, and the choppiness of the market continues. We see no reason to be involved in long positions despite the August contract being on short and intermediate term sell signals.

WTI crude oil:

July WTI crude oil lost $1.62 on volume of 721,990 contracts. Volume increased from June 2 when the July contract advanced 1.06 on volume of 703,460 contracts and total open interest increased by 21,985. On June 3, total open interest declined by 9,360 contracts, which relative to volume is approximately 40% below average.

An open interest decline on yesterday’s price decline is perfectly normal and it is positive that open interest is NOT increasing on price declines, which would indicate that new short-sellers are entering the market. The July contract accounted for loss of 14,929 of open interest. As this report is being compiled on June 4, the July contract is trading lower for the second day, down 1.59 and has made a daily low of 57.92, which is the lowest print since May 29 (57.72). 

On May 20, July WTI generated a short-term sell signal, and remains on an intermediate term buy signal. Although fundamentals are bearish, the OPEC meeting is tomorrow and statements made after may not be as bearish as the trade thinks.

Brent crude oil:

July Brent crude oil lost $1.69 on volume of 808,288 contracts. Volume increased substantially from May 29 when the July contract advanced $2.98 on volume of 747,221 contracts and total open interest increased by 32,329. On June 3, total open interest increased by 11,789 contracts, which relative to volume is approximately 35% below average. The July contract accounted for loss of 26,503 of open interest, which makes the total open interest increase more impressive (bearish).

For the past four sessions beginning on May 29 open interest has increased every day. Prices advanced during two of those days and declined the other two. In short it appears that market participants are unable to make up their minds whether to be bullish or bearish. On May 20, the July contract generated a short term sell signal and remains on intermediate term buy signal.For an intermediate term sell signal to be triggered, the high of the day must be below OIA’s key pivot point for June 4 of $61.38.

Gold: On June 3, August gold generated a short-term sell signal after generating an intermediate term sell signal on May 27.

August gold lost $9.50 on volume of 129,754 contracts. Total open interest increased by 3,822 contracts, which relative to volume is average.The June contract lost 518 of open interest, which makes the total open interest increase more impressive (bearish). The increase of open interest in yesterday’s trading on low volume confirms the downtrend and indicates that current holders of long positions are not panicking. However, we think this is about to change. As this report is being compiled on June 4, the August contract is trading $9.20 lower and has made a daily low of 1172.40, which is the lowest print since 1170.00 made on May 1.

Silver:  It is likely that July silver will generate short and intermediate term sell signals on June 5

July silver lost 31.9 cents on heavy volume of 74,904 contracts. Volume was the strongest since May 13 when 82,144 contracts were traded and the July contract closed at 17.221. On June 3 total open interest increased by 1,795 contracts, which relative to volume is approximately 10% below average, and an open interest increase on yesterday’s price decline is clearly bearish.

The July contract lost 2,132 of open interest, December 2015 -1,322, which makes the total open interest increase much more impressive (bearish). As this report is being compiled on June 4, July silver is trading at 37.00 cents lower or -2.25% and trading at the lows of the day.

Dollar index: The June and September dollar index will generate intermediate term sell signals on June 4. They remain on short term buy signals.

The June dollar index lost 36.9 points on heavy volume of 84,831 contracts.Volume contracted from June 2 when the June contract lost 1.595 points on volume of 96,166 contracts and total open interest increased by 133. On June 3, total open interest increased by 832 contracts, which relative to volume is 50% below average, however, the June contract lost 829 of open interest, which makes the total open interest increase more impressive (bearish).

Euro: The June euro will generate a short term buy signal on June 4 if the daily low is above OIA’s key pivot point of 1.1197. An intermediate term buy signal will be generated if the daily low is above OIA’s key pivot point for June 4 of 1.1102.

The June euro advanced 83 pips on heavy volume of 432,944 contracts. Volume was a shade below June 2 when the June contract advanced 2.34 cents on volume of 433,515 contracts and total open interest increased by 402. On June 3, total open interest declined by 5,503 contracts, which relative to volume is approximately 45% below average. However, the open interest decline in yesterday’s trading indicates that some short sellers have been blown out. As this report is being compiled on June 4, the June contract is trading 16 pips lower, near the lows of the day after being sharply higher (1.1382).