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Soybean oil:

July soybean oil advanced 1.27 cents on huge volume of 224,730 contracts. Volume traded on May 29 was the highest of 2015. On May 29, total open interest increased just 1,840 contracts, which relative to volume is approximately 55% below average. The July contract added 1,348 of open interest. The open interest stats are a disappointment, especially relative to the size of the move.

As this report is being compiled on June 1, the July contract has skyrocketed again, this time by 1.09 cents and has made a new high for the move of 34.57 which takes out the January 12, 2015 high of 34.33. 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 11.75 cents on volume of 138,994 contracts. Surprisingly volume was the lowest since May 22 (the day before the Memorial Day holiday) when the July contract lost 6.75  cents on volume of 120,736 contracts and total open interest declined by 955. On May 29, increased by a massive 8,886 contracts, which relative to volume is approximately 145% above average meaning aggressive new short-sellers were entering the market in large numbers and driving prices lower (4.74 1/2).

However, on June 1, the July contract has reversed and is trading sharply higher, up 18.25 cents or +3.88%.On May 15, July Chicago wheat generated a short term buy signal, and remarkably the signal has never reversed. For this to occur, the high of the day must be below OIA’s key pivot point for June 1 of 4.82 1/8. The July contract remains on an intermediate term sell signal.

Live cattle:

August live cattle lost 1.475 cents on extremely heavy volume of 87,637 contracts. Volume declined somewhat from May 28 when the August contract gained 1.325 cents on volume of 92,673 contracts and total open interest increased by massive 8,839 contracts. Also, on May 28, the August contract made a new high for the move of 1.53400.

On May 29, total open interest declined by a massive 9,205 contracts, which relative to volume is approximately 320% above average meaning liquidation was extremely heavy on the decline. While this is positive, the fact is the June contract accounted for the overwhelming majority of the open interest decline.

On May 29, the June contract lost 9,147 of open interest, however the August contract gained 907 of open interest. The August contract contains approximately 40% of the outstanding open contracts and is where the bulk of speculators hold positions. That the August contract did not show a decline of open interest is a yellow flag.The October 2015 contract lost 1,018 of open interest and December 2015 gained 106.

As this report is being compiled on June 1, the August contract is trading 70 points higher on low volume.We remain concerned there was no follow-through on May 29 from the move on the 28th.The August contract made a high of 1.53250 on May 29 and the high on June 1 has been 1.52150. This is the kind of action (lower highs) that increases our level of caution. With the massive increase of open interest on high-volume on May 28, the market should have had substantial follow-through in subsequent days. August live cattle remains on a short and intermediate term buy signal.

WTI crude oil:

July WTI crude oil advanced $2.62 on heavy volume of 843,959 contracts. Volume was the strongest since May 13 when the July contract lost 25 cents on volume of 903,781 contracts and total open interest declined by 2,335. On May 29, total open interest increased by 15,141 contracts, which relative to volume is approximately 25% less than average. The July contract lost 9,742 of open interest, which makes the total open interest increase more impressive (bullish). The July contract made a new high for the move of 60.70 on May 29, which is the highest print since 60.80 made on May 22.

As this report is being compiled on June 1, the July contract is trading 68 cents lower and has made a daily high 60.64, which is below Friday’s high. The fact there has been no follow through on Friday’s strong move is indicative that WTI is not likely to generate a new short-term buy signal immediately. On May 20, July WTI generated a short term sell signal, but remains on an intermediate term buy signal. For the short-term buy signal to reverse,the high of the day must be below OIA’s key pivot point for June 1 of $60.67

Brent crude oil:

July Brent crude oil advanced $2.98 on volume of 747,221 contracts. Total open interest increased by a massive 32,329 contracts, which relative to volume is approximately 65% above average meaning that aggressive new buyers were entering the market in very large numbers and driving prices higher (65.83). The July contract gained 7,328 of open interest, which confirms the very aggressive buying on May 29. However, on June 1 the July contract is trading down $1.01 and has made a high of 65.80, which is fractionally below Friday’s high of 65.83. For July Brent to generate a short-term buy signal, which would reverse the short term sell signal of May 20, the low of the day must be above OIA’s key pivot point for June 1 of $66.90.

Heating oil:

July heating oil gained 7.65 cents on volume of 167,929 contracts. Total open interest increased by 219 contracts, which is a major disappointment considering the magnitude of the move. The June contract lost 4,638 of open interest. As this report is being compiled on June 1, the July contract is trading 2.73 cents lower. July heating oil remains on a short-term sell signal, but an intermediate-term buy signal.

Gasoline:

July gasoline advanced 9.27 cents on heavy volume of 219,064 contracts. Total open interest declined by 1,712, which relative to volume is approximately 55% below average. The June contract accounted for loss of 4,977 of open interest. The performance of open interest relative to the strong price advanced is decidedly bearish. As this report is being compiled on June 1, the July contract is trading 1.15 cents lower on the day. July gasoline remains on a short and intermediate term buy signal.

Natural gas: On May 29, July natural gas generated short and intermediate term sell signals. This will be our last report on natural gas until we announce a signal change or see a trading opportunity.

July natural gas lost 6.4 cents on volume of 263,166 contracts. Total open interest increased by 4,506 contracts, which relative to volume is approximately 30% below average. The July contract gained 6,183 of open interest, which confirms the bearish set up in natural gas. As this report is being compiled on June 1, the July contract is trading 1.4 cents higher. We have no recommendation.

Euro:

The June euro advanced 26 pips on volume of 253,469 contracts. Total open interest declined by 2,522 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on June 1, the June contract is trading 54 pips lower and has made a daily low of 1.0889, which is below Friday’s print of 1.0928, but above the May 28 low of 1.0869. On May 26, the June and September euro generated short term sell signals and intermediate term sell signals on May 27.

British Pound: On June 1, the June and September British pound will generate short term sell signals but will remain on intermediate term buy signals.

The June British pound lost 32 pips on volume of 87,605 contracts.Total open interest increased by 586 contracts, which relative to volume is approximately 60% below average, however an open interest increase on a price decline is bearish.As this report is being compiled on June 1, the June pound is trading sharply lower, down 97 pips and has made a new low for the move of 1.5168, which is considerably below Friday’s print of 1.5235.

Australian dollar: On May 29, the June and September Australian dollar generated intermediate term sell signals after generating short-term sell signals on May 27. 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 advanced 20 pips on volume of 80,323 contracts. Total open interest increased by massive 3,871 contracts, which relative to volume is approximately 75% above average meaning a battle ensued between buyers and sellers and buyers were able to edge the market fractionally higher. However, on June 1, the June contract is trading 50 pips lower and has made a daily low of 75.91, which is below Friday’s print of 76.23.