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Soybean oil:

July soybean oil advanced 33 points on volume of 95,256 contracts. Total open interest increased by 2,132 contracts, which relative to volume is approximately 10% below average. The July contract accounted for loss of 744 of open interest, which makes the total open interest increase more impressive (bullish).

As this report is being compiled on May 29, the July contract is trading sharply higher, up 1.24 cents, or +3.87% while July soybeans are trading +7.50, or +0.84%. As readers of this report know, we have advised a stand aside posture due to our concern that soybeans were vulnerable to further downside action, which would keep a lid on soybean oil prices, or possibly drag it lower. We continue to recommend a stand aside posture because from a risk reward point of view, we don’t think new long positions make sense. 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 advanced 1.00 cent on heavy volume of 148,317 contracts. Total open interest increased by 718 contracts, which relative to volume is approximately 75% below average. The July contract lost 5,879 of open interest. Based upon volume and the slight increase of open interest, it appears that a battle between buyers and sellers occurred on the 28th, however sellers have won the day on May 29 because the July contract is trading 12.50 cents lower at the lows of the day.On May 15, July Chicago wheat generated a short-term buy signal, and it appears to be headed for a short-term sell signal. For this to occur, the high of the day must be below OIA’s key pivot point for May 29 of 4.82 5/8.

Live cattle:

August live cattle advanced 1.325 cents on extremely heavy volume of 92,673 contracts. Volume was the second-highest of 2015 and was only surpassed by trading on January 14, 2015 when the August contract lost 1.550 cents on volume of 104,891 and the August contract closed at 1.46200. On May 28, total open interest exploded higher, up by a massive 8,839 contracts, which relative to volume is approximately 275% above average. Making the total open interest increase more impressive: the June contract lost 8,039 of open interest.

Yesterday, the August contract made a new high for the move of 1.53400, but on May 29 the August contract is trading 50 points lower and has made a daily high of 1.53250, which is below yesterday’s high. Although it appears that August live cattle has broken out to the upside, the massive increase of volume and open interest is a yellow flag.

Although seasonally, we should see prices continue to advance, we are a bit concerned there has been no follow through today on yesterday’s strong price and open interest action. This is not to say the upside move is over, it is just a cautionary indication the move may be in small increments. August live cattle remains on a short and intermediate term buy signal.

WTI crude oil:

July WTI crude oil advanced 17 cents on volume of 654,926 contracts. Total open interest increased by 13,306 contracts, which relative to volume is approximately 20% below average.The July contract gained 1,691 of open interest. This is unusual because generally, the front month loses open interest, especially on a modest advance.

As this report is being compiled on May 29, July WTI crude oil is advancing $2.17 and trading at the highs of the day. At this juncture, we have no information about the catalyst for the strong advance. On May 20, the July contract generated a short-term sell signal, but has remained on intermediate term buy signal. In order for the short-term sell signal to reverse, the July contract must make a daily low above OIA’s key pivot point for May 29 of 60.59.We have no recommendation.

Natural gas: On May 29, July natural gas will generate a short and intermediate term sell signal.

July natural gas lost 14.1 cents on volume of 361,996 contracts. Total open interest increased by a strong 9,395 contracts, which relative to volume is average. The June contract lost 240 of open interest. The hefty increase of open interest on yesterday’s price decline is clearly bearish and is the first open interest increase on a price decline since May 18 when natural gas lost 1.8 cents on volume of 250,430 contracts and total open interest increased by 4,465. On May 18 natural gas made a high of 3.048. In short, market participants have gotten bearish at the low end of the trading range, and as this report is being compiled on May 29 the July contract is trading lower again, this time by 6.1 cents or -2.25%.We have no recommendation.

Gold:

August gained $3.20 on heavy volume of 210,342 contracts. Total open interest declined by 10,795 contracts, which relative to volume is approximately 105% above average mean liquidation was extremely heavy on the modest advance. The June contract accounted for loss of 22,113 of open interest.As this report is being compiled on May 29, the August contract is trading 40 cents higher. August Gold remains on a short term buy signal, but in intermediate-term sell signal.We have no recommendation.

Silver:

July silver advanced 2.2 cents on volume of 45,480 contract. Total open interest increased by 1,332 contracts, which relative to volume is approximately 5% above average. The July contract lost 2,057 of open interest and there were sufficient open interest increases in the forward months to substantially increase total open interest. It appears the action on May 28 was a battle between buyers and sellers, and as this report is being compiled on May 29, the July contract is trading 3.1 cents higher. Remarkably, July silver remains on the short and intermediate term buy signal.

Euro:

The June euro advanced 65 pips on volume of 293,542 contracts. Total open interest increased just 116 contracts, and this indicates that short sellers were not covering positions on the advance. As this report is being compiled on May 29, the June contract is trading 29 pips higher and has made a daily high of 1.1008, which is the highest print since 1.1212 made on May 22.

Since making its low for the move of 1.0821 on May 27, the June contract has rallied 1.80 cents from the low. The June and September euro generated a short-term sell signal on May 26 and an intermediate term sell signal on May 27. We have warned clients about the likelihood of a counter trend move, and today is the third day of the rally. We think there may be an opportunity for bearish positions, but prefer to wait until Monday before making a recommendation.

Australian dollar:

The June Australian dollar lost 65 pips on heavy volume of 115,434 contracts. Total open interest increased by 2027 contracts, which relative to volume is approximately 25% below average. As this report is being compiled on May 29, the June contract is trading 6 pips  higher on the day after making a daily low of 76.23, which is slightly above yesterday’s low of 76.11.On May 27, the June and September Australian dollar generated a short-term sell signal and will generate an intermediate term sell signal on May 29. We have no recommendation.