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Soybean oil:

July soybean oil lost 41 points on volume of 85,226 contracts. Total open interest increased by 1,015 contracts, which relative to volume is approximately 45% less than average. The July contract accounted for loss of 2,213 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on May 28, the July contract is trading 22 points higher while July soybeans are trading 3.75 cents lower. Stand aside.

Chicago wheat:

July Chicago wheat lost 5.75 cents on heavy volume of 179,894 contracts. Volume exceeded that of May 26 when the July contract lost 21.75 cents on volume of 154,096 contracts and total open interest increased by 3,059. On May 27, total open interest declined by 1,090 contracts, which relative to volume is approximately 65% below average. The July contract lost 8452 of open interest, December 2015 -803, which means there were sufficient open interest increases in the forward months to offset most of the decline in July and December. We consider this to be bearish open interest action. As this report is being compiled, the July contract is trading 1.25 cents higher and has made daily low of 4.83, which is above yesterday’s low of 4.82.July Chicago wheat remains on a short-term buy signal, but an intermediate-term sell signal. Stand aside.

Live cattle:

August live cattle advanced 80 points on volume 53,029 contracts. Total open interest increased by a healthy 3,273 contracts, which relative to volume is approximately 140% above average meaning aggressive new buyers were entering the market in large numbers and driving prices higher (1.51650). The June contract accounted for loss of 5,077 of open interest, which makes the total open interest increase more impressive (bullish).

As this report is being compiled on May 28, the August contract is trading 1.925 cents higher on good volume. Prices are trading at the highest level since May 14 when the August contract made a high of 1.52950. As we have said in prior reports, we see a firm market heading into the July 4 holiday, then likely price declines thereafter. August live cattle remains on a short and intermediate term buy signal. We have no recommendation.

WTI crude oil:

July WTI crude oil lost 52 cents on heavier than normal volume of 680,719 contracts. Volume was the strongest since May 14 when WTI lost 62  cents on volume of 736,287 contracts and total open interest declined by 50,041. On May 27, total open interest increased by 6,266 contracts, which relative to volume is approximately 50% below average, but the July contract lost 7,610 of open interest, which makes the total open interest increase more impressive (bearish).

The total open interest increase on May 27 is the first since May 4 when WTI lost 22 cents on volume of 395,171 contracts and total open interest increased by 13,375. This is the first indication that market participants are getting bearish.

As this report is being compiled on May 28, the July contract is trading 62 cents lower and has made a new low for the move of 56.51,, which is the lowest print since $56.00 made on April 15.On May 20. OIA announced that July WTI generated a short-term sell signal. We have no recommendation.

Brent crude oil:

July Brent crude oil lost $1.66 on volume of 655,507 contracts. Total open interest increased by 16,120 contracts, which relative to volume is average. The July contract accounted for loss of 12,036 of open interest, which makes the total open interest increase more impressive (bearish). Note the open interest increase was significantly greater in Brent than in WTI.As this report is being compiled, the July contract is trading 4 cents higher while the WTI contract is trading 60  cents lower. On May 20, OIA announced that Brent crude oil generated a short-term sell signal. We have no recommendation.

Heating oil: On May 27, July heating oil generated a short-term sell signal, but remains on an intermediate term buy signal. This will be the last report on heating oil until we announce the signal change or see a trading opportunity.

July heating oil lost 4.39 cents on volume of 143,163 contracts. Total open interest declined by 3,107 contracts, which relative to volume is approximately 15% below average. The June contract accounted for a loss of 5,989 of open interest. As this report is being compiled, the July contract is trading nearly unchanged on the day. We have no recommendation.

Gasoline:

July gasoline lost 5.13 cents on volume of 160,773 contracts. Total open interest declined by 1,870 contracts, which relative to volume is approximately 45% below average. The June contract lost 6,614 of open interest. As this report is being compiled on May 28, the July contract is trading 1.55 cents higher. For July gasoline to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for May 28 of 1.9790. It appears likely that a short-term sell signal will be generated on May 28.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.8 million barrels from the previous week. At 479.4 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 3.3 million barrels last week, but are near the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 1.1 million barrels last week but are in the lower half of the average range for this time of year. Propane/propylene inventories rose 2.2 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 2.2 million barrels last week.

Natural gas:

July natural gas lost 2 ticks on light volume of 237,255 contracts. Total open interest declined by 4,445 contracts, which relative to volume is approximately 25% below average. The June contract lost 5,742 of open interest. As this report is being compiled after the release of the natural gas storage report, the July contract is trading sharply lower down 13.00 cents or -4.57%. Despite the sharply lower market on May 28, the July contract will not generate a short-term sell signal today because the high of the day (2.845) is above OIA’s key pivot point for short and intermediate term sell signals. In order for the sell signals to be generated, the high of the day must be below the pivot points.

Weekly Natural Gas Storage Report – EIA

The Energy Information Administration announced that working gas in storage was 2,101 Bcf as of Friday, May 22, 2015, according to EIA estimates. This represents a net increase of 112 Bcf from the previous week. Stocks were 737 Bcf higher than last year at this time and 18 Bcf below the 5-year average of 2,119 Bcf. In the East Region, stocks were 135 Bcf below the 5-year average following net injections of 64 Bcf. Stocks in the Producing Region were 57 Bcf above the 5-year average of 843 Bcf after a net injection of 35 Bcf. Stocks in the West Region were 60 Bcf above the 5-year average after a net addition of 13 Bcf. At 2,101 Bcf, total working gas is within the 5-year historical range.

Gold: On May 27, August gold generated an intermediate term sell signal, but remains on a short-term buy signal.

August gold lost 40 cents on very heavy volume of 363,253 contracts. Volume exceeded that of May 26 when the August contract lost $17.10 on volume of 346,326 contracts and total open interest declined by 2,921 contracts. On May 27, total open interest declined by 2,612 contracts, which relative to volume is approximately 60% below average.The June contract lost 55,982 of open interest. As this report is being compiled on May 28, the August contract is trading 2.80 higher and has made a daily low of 1180.20, which is below yesterday’s low of 1183.90.We have no recommendation.

Silver:

July silver lost 9.9 cents on volume of 38,653 contracts. Total open interest increased by massive 3,061 contracts, which relative to volume is approximately 215% above average, meaning a battle ensued between buyers and sellers and sellers were able to move the market fractionally lower. As this report is being compiled, the July contract is trading 2.8 cents higher and has made a daily low 16.540, which is below yesterday’s print of 16.580.July silver remains on a short and intermediate term buy signal.

Dollar index: This will be the last report on the dollar index until we announce a signal change or see a trading opportunity.

The June dollar index advanced 6.7 points on volume of 59,182 contracts. Total open interest declined by 1,636 contracts, which relative to volume is average. The June contract, which is facing expiration shortly lost 2612 of open interest. As this report is being compiled, the June contract is trading 35.9 points lower, which is typical after the generation of buy signals. On May 26, the June and September Dollar index generated short and intermediate term buy signals.

Euro: On May 27, the June and September euro generated an intermediate term sell signal after generating short-term sell signals on May 26.

The June euro gained 18 pips on heavy volume of 329,128 contracts.Remarkably, volume increased from May 26 when the June contract lost 1.69 cents on volume of 324,517 contracts and total open interest increased by 6,196.On May 27, total open interest declined by 1,359 contracts, which relative to volume is approximately 75% below average. As this report is being compiled on May 28,the euro is experiencing a counter trend rally  and this is typically after the generation of sell signals.We have no recommendation.

British Pound:

The June British pound lost 47 pips on volume of 97,629 contracts. Total open interest declined by 1,722, which relative to volume is approximately 25% below average. As this report is being compiled on May 28, the June contract is trading 22 pips lower after making a new low for the move of 1.5258, which takes out yesterday’s low of 1.5299.

Since topping at 1.5821 on May 14, the pound has experienced massive liquidation, and this should dissipate going forward.  We think the pound is likely to find support at current levels. Despite the sharp move lower, the June pound remains on short and intermediate term buy signals. For a short-term sell signal to be generated the high of the day must be below OIA’s key pivot point for May 28 of 1.5315. We have no recommendation.

Australian dollar: On May 27, the June and September Australian dollar generated short term sell signals, but remain on intermediate term buy signals. This will be our last report on the Australian dollar until we announce a signal change or see a trading opportunity.

The June Australian dollar lost 10 pips on volume of 70,763 contracts. Total open interest increased by 1,245, which relative to volume is approximately 30% below average, but this is the third open interest increase in a row on price declines, which is bearish. As this report is being compiled, the June contract is trading 69 pips lower and will not generate an intermediate term sell signal on May 28. For this to occur, the high of the day must be below OIA’s key pivot point for May 28 of 77.06 and the high thus far has been 77.55. We have no recommendation.

Canadian dollar: This will be our last report on the Canadian dollar until we announce a signal change or see a trading opportunity.

The June Canadian dollar lost 25 pips on volume of 67,301 contracts. Total open interest declined by 802 contracts, which relative to volume is approximately 45% below average. As this report is being compiled on May 28, the June contract is trading 15 pips higher and will not generate an intermediate term sell signal on May 28. For this to occur, the high of the day must be below OIA’s key pivot point for May 28 of 80.12.