For Bloomberg access:{OIAR<GO>}

Soybeans:

July soybeans lost 2.25 cents on volume of 166,520 contracts. Total open interest increased by 4,863 contracts, which relative to volume is approximately 5% above average. The May contract lost 1,273 of open interest. As this report is being compiled on May 7, July soybeans are trading 6.75 lower and have made a daily high at 9.84 3/4, which is below yesterday’s high of 9.90 1/2. July soybeans remain on the short and intermediate term sell signal.

Soybean oil:

July soybean oil lost 13 points on volume of 97,558 contracts. Total open interest declined just 96 contracts.The May contract lost 400 of open interest, July -865. As this report is being compiled on May 7, July soybean oil is trading 31 points lower. July soybean oil generated a short-term buy signal on April 16 and an intermediate term buy signal on May 5. We have no recommendation.

Corn:

July corn advanced 4.00 cents on volume of 310,515 contracts. Total open interest declined by 5,286 contracts, which relative to volume is approximately 25% below average, but an  open interest on a price advance is distinctly negative. The open interest declines were in the near months: May -1354, July -6593, September -3435. As this report is being compiled on May 7, July corn is trading 4.00 lower. July corn remains on a short and intermediate term sell signal.

Live cattle:

June live cattle lost 1.225 cents on volume of 45,305 contracts. Total open interest declined by 558 contracts, which relative to volume is approximately 45% below average. The June contract lost 4063 of open interest. As this report is being compiled on May 7, June live cattle is trading 60 points lower and has made a daily low of 1.49075, which is the lowest print since May 1 (1.48400). June live cattle remains on a short term sell signal, but an intermediate term buy signal.

Lean hogs:

June lean hogs advanced 1.30 cents on heavy volume of 52,781 contracts. Volume was the strongest since April 30 when June lean hogs advanced 22.5 points on volume of 57,986 contracts and total open interest increased by 1,350. On May 6, total open interest declined by a  massive 3,732 contracts, which relative to volume is approximately 185% above average meaning liquidation was extremely heavy on the advance.

The open interest action relative to the price advance was extremely negative, and liquidation was prominent in the front months with the May contract losing 20 of open interest, June -5525, August and October contracts losing a total of 945. As we have pointed out in previous reports, price action has been impressive, but open interest has been negative. As this report is being compiled on May 7, the June contract is trading 40 points lower and has not taken out yesterday’s high of 84.475. We have no recommendation.

WTI crude oil:

June WTI crude oil advanced 53 cents on heavy volume of 907,639 contracts.Volume exceeded that of May 5 when the June contract advanced $1.47 on volume of 841,175 contracts and total open interest increased by 12,366. On May 6, increased by 25,535 contracts, which relative to volume is average. The June contract lost 19,283 of open interest, which makes the total open interest increase more impressive (bullish).

As we pointed out in yesterday’s report, the volume traded in the 10 minute period after the release of the EIA report in the June contract was 30,578 contracts and the range traded was 61.96-62.58, closing at 62.03 on the 10 minute chart. In short, volume traded in that 10 minute period in the June contract represented 3.3% of the total volume traded in all contracts.

From time to time we mention that massive volume spikes as prices approach a new high or low can be a sign of capitulation and a possible major high or low. The high of 62.58 should be on every speculators watch list.On April 7, OIA announced that June WTI generated a short-term buy signal and an intermediate term buy signal on April 14.

Brent crude oil:

June Brent crude oil advanced 25 cents on heavy volume of 870,882 contracts. However, unlike the positive open interest action in WTI, total open interest in the Brent contracts declined by 24,452 contracts, which relative to volume is average, and bearish.The June contract lost 47,948 of open interest, and there were open interest increases in the forward months that reduced total open interest by approximately half of the June loss.

The open interest action in Brent has had a bearish pattern and the recent exception to this occurred on May 5 when June Brent advanced $1.07 and total open interest increased by 14,243 contracts on volume of 729,728. June Brent remains on a short and intermediate term buy signal.

Natural gas:

June natural gas closed unchanged on volume of 265,537 contracts. Total open interest declined by 3,572 contracts, which relative to volume is approximately 45% below average.The June contract lost 13,870 of open interest. As this report is being compiled on May 7, June natural gas is trading 5.2 cents lower after the release of the EIA natural gas storage report. On May 1, June natural gas generated a short term buy signal, and on May 5, the June contract had its first corrective day losing 4.1 cents. Today, May 7 is the second day of the correction and conceivably, we may see a third day of corrective action, but it should be minor.

Weekly Natural Gas Storage Report – EIA

The Energy Information Administration announced that working gas in storage was 1,786 Bcf as of Friday, May 1, 2015, according to EIA estimates. This represents a net increase of 76 Bcf from the previous week. Stocks were 742 Bcf higher than last year at this time and 67 Bcf below the 5-year average of 1,853 Bcf. In the East Region, stocks were 161 Bcf below the 5-year average following net injections of 31 Bcf. Stocks in the Producing Region were 23 Bcf above the 5-year average of 767 Bcf after a net injection of 38 Bcf. Stocks in the West Region were 71 Bcf above the 5-year average after a net addition of 7 Bcf. At 1,786 Bcf, total working gas is within the 5-year historical range.

Euro:

The June euro advanced 1.56 cents on heavy volume of 387,872 contracts. Remarkably, open interest increased just 127 contracts. As this report is being compiled on May 7, the June euro is trading 92 pips lower and has made a new high for the move of 1.1398 which takes out yesterday’s high of 1.1377.

It is difficult to say whether the euro has exhausted its upside just yet, and much of this will depend upon whether leverage funds have substantially liquidated short positions. Our view has been that short sellers must be blown out of the market before the euro can resume its downtrend.The June euro remains on a short and intermediate term buy signal.

Dollar index: On May 6, the June dollar index generated an intermediate term sell signal after generating a short-term sell signal on April 27.

The June dollar index lost 1.027 points on heavy volume of 80,074 contracts. Total open interest increased by 1,431 contracts, which relative to volume is approximately 25% below average, but an open interest increase on a price decline is bearish. Yesterday, the June contract made a new low for the move of 93.960, which is the lowest print since January 22 (93.210). As this report is being compiled on May 7, the June dollar index is trading 64 points higher. We have no recommendation.