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Soybean oil:

July soybean oil lost 61 points on volume of 118,015 contracts. Total open interest increased by 2,642 contracts, which relative to volume is approximately 10% below average. However, the July contract lost 3,649 of open interest, which makes the total open interest increase more impressive (bearish).

As this report is being compiled on May 26, July soybean oil is trading 38 points higher and has made a daily low of 31.59,, which is 1 point below Friday’s print. With soybeans sitting on contract lows, a short and intermediate term sell signal in soybean oil appears to be inevitable. Stand aside.

Chicago wheat:

July Chicago wheat lost 6.75 cents on volume of 120,736 contracts. Total open interest declined by 955 contracts, which relative to volume is approximately 55% below average. However, the July contract lost 5,164 of open interest, which means there were sufficient open interest increases in the forward months to reduce total open interest to a substantially below average number. We consider the action on May 22 to be bearish. As this report is being compiled on May 26, July Chicago wheat is trading sharply lower, down 20.75 cents, or -4.03%. July Chicago wheat will generate a short-term sell signal if the daily high is below OIA’s key pivot point for May 26 of 4.82 7/8. July Chicago wheat remains on an intermediate-term sell signal.

Live cattle:

June live cattle lost 25 points on total volume of 56,111 contracts. total open interest declined just 226 contracts, which relative to volume is approximately 75% below average. However, the June contract accounted for a loss of 4,901 of open interest, which means there were sufficient open interest increases in the forward months to substantially reduce total open interest. We consider this to be negative. As this report is being compiled on May 26, the August contract is trading 30 points lower.

During the past month, the market has been trading sideways, and we see no compelling reason to the involved in live cattle. Although the fundamentals are positive, the fact remains that managed money is massively long and they have been unable to push prices substantially higher. The market looks tired, and after the Fourth of July holiday we would not be surprised to see live cattle decline to the low 1.40 area. August live cattle remains on a short and intermediate term buy signal.

WTI crude oil:

July WTI crude oil lost $1.00 on light holiday volume of 418,467 contracts. Total open interest declined by 12,066 contracts, which relative to volume is average. The July contract accounted for loss of 14,016 of open interest. As this report is being compiled on May 26, the July contract is trading sharply lower, down 1.62, or -2.71% and is making new lows for the move as this report is being written.

On May 20, July WTI crude oil generated a short-term buy signal, and the market is approximately $3.50 away from generating an intermediate term sell signal. Conceivably, WTI could pull back to the intermediate term pivot point where it may find support. The reason for the support is the upcoming OPEC meeting on June 5. Although US fundamentals are bearish, oil consumption continues to increase globally.

Most important: Saudi Arabia is  fighting a proxy war in Yemen and is arming itself for what may be a significant and  protracted conflict. Though, Saudi Arabia may want to keep prices low to break the back of its competitors, it may not have a choice because of increasing military expenditures. Consequently, the news release from the OPEC meeting may be friendly to the market. In short, we think it’s unwise to get overly bearish despite bearish US fundamentals.

Natural gas:

July natural gas lost 7.5 cents on light holiday volume of 264,334 contracts. However, total open interest declined by a massive 16,994 contracts, which relative to volume is approximately 150% above average meaning liquidation was extremely heavy on the decline. The June contract lost 9,563 of open interest and there were additional open interest declines in the forward months. As this report is being compiled on May 26, July natural gas is trading sharply lower, down 9.7  cents or -3.32%. It appears inevitable that natural gas will generate a short and intermediate term sell signal shortly. For this to occur, the high of the day must be below two OIA pivot points of 2.809 and 2.806 respectively. Stand aside.

Copper: July copper will generate a short-term sell signal on May 26, but remains on an intermediate term buy signal.

July copper lost 3.75 cents on volume of 55,877 contracts. Total open interest declined by 2,234 contracts, which relative to volume is approximately 55% above average. As this report is being compiled on May 26, July copper is trading 3.25 cents lower and has made a daily low 2.7730, which is the lowest print since April 29 (2.7600).According to the latest COT report, there remains a large numbers of managed money longs who will add fuel to the downside move as they are forced to liquidate positions. Stand aside.

Gold:

August gold lost 10 cents on volume of 193,440 contracts. Total open interest declined by 2,939 contracts, which relative to volume is approximately 45% below average. The June contract accounted for loss of 16,988 of open interest. There were sufficient open interest increases in the forward months to offset a good portion of the loss in the June contract.

As this report is being compiled on May 26, the August contract is trading substantially lower, down $17.60, or -1.46% on a sharply higher dollar index. For awhile gold was able hold its own as the dollar index rallied, but gave up today. In order for August gold to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for May 26 of 1191.40. An intermediate-term sell signal will be generated if the high of the day is below OIA’s key pivot point for May 26 of 1201.50. Stand aside.

Silver:

July silver lost 8.1 cents on volume of 34,447 contracts.declined by 1,262 contracts, which relative to volume is approximately 50% above average mean liquidation was substantial on the modest decline. As this report is being compiled on May 26, the July contract is trading 30.6 cents below Fridays close.

In order for July silver to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for May 26 of 16.422. An intermediate term sell signal will be generated if the high of the day is below OIA’s key pivot point for May 26 of 16.489. Stand aside.

Dollar index: The June and September dollar index will generate short and intermediate term buy signals on May 26.

The June dollar index advanced 78.1 points on heavy volume of 69,254 contracts. Total open interest increased by 1,571 contracts, which relative to volume is approximately 10% below average. As this report is being compiled on May 26, the June contract is trading 1.155 points higher, or +1.2% above yesterday’s close.

Euro: The June euro will generate a short-term sell signal on May 26, however the intermediate term sell signal will likely be generated tomorrow.

The June euro lost 91 pips on heavier than normal volume of 296,951 contract. Total open interest increased by 2,619 contracts, which relative to volume is approximately 50% below average This is the first open interest increase on a price decline since the June contract topped at 1.1472 on May 15. As this report is being compiled on May 26, the June contract is trading 1.57  cents lower and is currently trading at the lows of the day. The decline is all about Greece, and it would appear the market is headed for a test of the mid April lows in the 1.0500 area.

British Pound:

The June British pound lost 1.85 cents on volume of 105,028 contracts. Total open interest declined by 3,111 contracts, which relative to volume is approximately 5% above average. As this report is being compiled on May 26, the June contract is trading 81 pips lower and has made a daily low of 1.5352, which is the lowest print since 1.5351 made on May 8.

There is a good-sized gap between the May 8 low (1.5351) and the May 7 high of 1.5271, and it looks like the gap is going to be filled in the coming week. As the COT report revealed, leverage funds are substantially long the pound and this class of trader needs to get blown out before the pound can find some stability.

For the June contract to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for May 26 of 1.5316. Although we see further declines for the pound, we aren’t all that bearish on the currency. Clients should be standing aside at this juncture.

Canadian dollar: The June Canadian dollar will generate a short-term sell signal on May 26, but not an intermediate term sell signal.

The June Canadian dollar lost 64 pips on volume of 52,582 contracts. Total open interest increased by a massive 3,460 contracts, which relative to volume is approximately 160% above average meaning aggressive new short-sellers were entering the market in heavy numbers and driving prices lower (81.12). As this report is being compiled on May 26, the June contract is trading 80 pips lower and has made a daily low of 80.30, which is the lowest print since 79.48 made on April 15. Stand aside.

Australian dollar: The June Australian dollar will not generate a short or intermediate-term sell signal on May 26.For it to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for May 26 of 77.87.We think this is likely to occur in tomorrow’s session.

The June Australian dollar lost 65 pips on volume of 73,625 contracts. Total open interest increased by 593 contracts, which relative to volume is approximately 60% below average, but an open interest increase on Friday’s price declines is bearish. As this report is being compiled on May 26, the June contract is trading 84 pips lower and has made a daily low of 77.26, which is the lowest print since 76.89 made on April 23. Stand aside.