Soybeans:

May soybeans declined 19.25 cents on fairly heavy volume of 203,874 contracts. Volume increased from the 179,901 contracts traded on April 10 when May soybeans lost 13.00 cents and total open interest declined by 938 contracts. On April 11, total open interest increased by a substantial 4,047 contracts, which relative to volume is approximately 20% below average, but this is the first significant open interest increase seen on a price decline in quite a while. The May contract lost 15,309 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on April 14, May soybeans are trading 6.25 cents higher on the day. May soybeans remain on a short and intermediate term buy signal. We have no recommendation.

Soybean meal:

May soybean meal lost $6.60 on relatively heavy volume of 92,971 contracts. Total open interest increased by only 138 contracts, which is minuscule and dramatically below average. The May contract lost 10,922 of open interest and there was sufficient open interest increases in the forward months to bring down the open interest increase to a minor number. We consider the action on April 11 to be bearish. As this report is being compiled on April 11, May soybean meal is trading $5.10 higher on the day. May soybean meal remains on a short and intermediate term buy signal. We have no recommendation.

Corn:

May corn lost 2.75 cents on volume of 345,941 contracts. Total open interest increased by 2,183 contracts, which relative to volume is approximately 60% below average. The May contract accounted for loss of 45,225 contracts, which makes the total open interest increase more impressive (bearish). As this report is being compiled on April 14, May corn is trading 6.50 cents higher and has made a high print of 5.07. May corn remains on a short and intermediate term buy signal. We have no recommendation.

Chicago wheat:

May Chicago wheat lost 2.00 cents on volume of 103,765 contracts. Total open interest increased by 621 contracts, which relative to volume is approximately 55% below average. The May contract accounted for loss of 8,168 of open interest, which makes the total open interest increase more impressive (bearish). As this report is being compiled on April 14, May Chicago wheat is trading 22.75 cents higher and has made a daily high of 6.89 1/2. It appears that increased tension in Ukraine is the catalyst for the move higher. Although May Kansas City wheat generated a short-term sell signal on April 10, Chicago wheat got close, but never generated a sell signal. For May Chicago wheat to resume its uptrend, the low for the day must be above OIA’s key pivot point of $6.83 5/8. May Chicago wheat remains on a short and intermediate term buy signal. We have no recommendation.

Kansas City wheat:

May Kansas City wheat lost 3.00 cents on heavy volume of 35,367 contracts. Volume increased from April 10 when 33,565 contracts were traded and May KC wheat lost 10.75 cents while total open interest declined by 2,179 contracts. On April 11, total open interest increased by 1,855 contracts, which relative to volume is approximately 100% above average. The May contract lost 4,659 of open interest, which makes the total open interest increased much more impressive (bearish).

On April 10, May KC wheat generated a short-term sell signal, and is usually the case after this occurrence, the market usually rallies from 1-3 days. April 14, is the first day of the countertrend rally, and the larger question is with increasing tensions in Ukraine will KC wheat continue to rally. It doesn’t appear that the situation in Ukraine is improving, which means it is likely to get worse. If this is the case, the short-term sell signal could be reversed. As this report is being compiled on April 14, May KC wheat is trading 23.50  cents higher and has made a daily high of $7.50 1/4. For KC wheat to reverse the short-term sell signal, the low the day must be above OIA’s key pivot point of $7.52 5/8. May Kansas City wheat remains on a short-term sell signal, but an intermediate term buy signal. We recommend a stand aside posture.

Sugar #11:

July sugar lost 22 points on fairly heavy volume of 174,220 contracts. Total open interest increased by 3,490 contracts, which relative to volume is approximately 20% below average, but the May contract lost 27,460 of open interest, which makes the total open interest increase more impressive (bearish). In the report of April 8, we recommended that clients re-enter bearish positions in sugar after being stopped out earlier in the day and to use the April 8 daily high of 17.93 as an exit point. If clients took this advice, they are sitting on a profitable position. As this report is being compiled on April 14, July sugar is trading 12 points lower and has made a new low for the move at 17.24, which has taken out the April 2 low of 17.26. Sugar generated a short-term sell signal on April 2, but remains on an intermediate term buy signal. Continue to maintain bearish positions.

Cotton:

July cotton closed unchanged on volume of 45,052 contracts. Volume was the lowest since April 8 when 29,934 contracts were traded and cotton advanced 1.17 cents while total open interest increased by 1,104 contracts. On April 11, total open interest declined by a massive 4,354 contracts, which relative to volume is approximately 300% above average meaning that liquidation was extremely heavy on an unchanged market. The May contract accounted for loss of 14,041 contracts. On April 11, July cotton made a new low for the move at 88.63, which is the lowest print since March 6 (88.45).

On April 10, cotton generated a short-term sell signal, and is usually the case after this occurrence, a countertrend rally ensues lasting from 1-3 days. As this report is being compiled on April 14, July cotton is trading 1.63 cents higher and has made a daily high of 92.91. This is the area that July cotton has encountered resistance before. For example, the high on April 9 was 92.92, April 8, 92.85. On April 7, the high was 93.48. We recommend waiting until tomorrow to initiate bearish positions, which will allow us to examine the volume and open interest for today’s move.

WTI crude oil:

May WTI crude oil advanced 34 cents on heavy volume of 644,537 contracts. Volume was the highest since April 9 when 789,212 contracts were traded and May WTI crude oil advanced $1.04 while total open interest increased by 16,174 contracts. On April 11, total open interest declined by 2,338 contracts, which relative to volume is approximately 85% below average. The May contract accounted for loss of 18,513 of open interest. As this report is being compiled on April 14, May WTI is trading 21 cents higher and has made a daily high of $104.55, which is slightly above Friday’s high of 104.44. The highs of today and Friday represent formidable resistance going back to early March. However, it appears that heating oil may be on the verge of generating a short-term buy signal, and Brent crude oil is currently trading $1.45 higher on the day after making a new high for the move at 109.14. Additionally, May gasoline generated a short-term buy signal on April 8. In short, WTI may be in a position to take out resistance with the support of the products. May WTI remains on a short and intermediate term buy signal. We have no recommendation.

Natural gas:

May natural gas lost 3.5 cents on volume of 309,625 contracts. Volume fell considerably from the 509,470 contracts traded on April 10 when May natural gas advanced 6.9 cents and total open interest increased by 13,503 contracts. On April 11, total open interest declined by 6,768 contracts, which relative to volume is approximately 15% below average. However, a decline of open interest accompanying a price decline is healthy. The May contract accounted for loss of 32,415 of open interest. On April 10, May natural gas generated a short-term buy signal, and the countertrend decline began on April 11 and continues on April 14 with May natural gas trading 7.1 cents lower on the day. On April 14, May natural gas has made a low of 4.539, which is above the April 10 low of 4.522, the day that May natural gas generated the short-term buy signal. Additionally, the 20 day moving average is $4.449 and the 50 day moving average, 4.500, which means natural gas is getting close to its value zone. Tomorrow, we will determine whether to recommend bullish positions.

Euro:

The June euro lost 4 pips on very light volume of 109,130 contracts. Total open interest increased by a substantial 4,033 contracts, which relative to volume is approximately 45% above average. As this report is being compiled on April 14, the June euro is trading 62 pips lower and has made a daily low of 1.3806. The euro remains on a short and intermediate term buy signal. We have no recommendation.

Canadian dollar:

The June Canadian dollar lost 35 pips on volume of 46,085 contracts. Total open interest declined by 962 contracts, which relative to volume is approximately 15% below average. As this report is being compiled on April 14, the June Canadian dollar is trading 2 pips higher and has made a daily low of 90.84, which is 4 pips below Friday’s low of 90.88. We want to watch the market for one more day before recommending bullish positions. The June Canadian dollar remains on a short and intermediate term buy signal.

Gold:

June gold lost $1.50 on very light volume of 100,700 contracts. Total open interest declined by 4,327 contracts, which relative to volume is approximately 60% above average meaning that liquidation was fairly heavy. As this report is being compiled on April 14, June gold is trading $8.10 higher and has made a new high for the move at 1331.40, which is the highest print since 1335.60 recorded on March 24. It is likely that June gold will generate a short-term buy signal on April 14. We have no recommendation at this juncture.

Platinum: On April 11, July platinum generated a short-term buy signal, and remains on an intermediate term buy signal.

July platinum gained $2.50 on volume of 7,546 contracts. Total open interest declined by 183 contracts, which relative to volume is average. As this report is being compiled on April 14, July platinum is trading $3.20 higher and has made a new high for the move at $1471.50, which is the highest print recorded since March 17 of 1484.10. Usually, after the generation of a buy signal, the market tends to have a countertrend decline lasting 1 to 3 days. This is the opportunity to initiate bullish positions.

S&P 500 E mini: On April 11, the June S&P 500 E mini generated a short-term sell signal, but remains on an intermediate term buy signal.

The June S&P 500 E mini lost 15.25 points on heavy volume of 2,533,337 contracts. Total open interest declined by 9,431 contracts, which relative to volume is approximately 85% less than average, but an open interest increase on a price decline is bearish. April 11 was the second day in a row when open interest increased and prices declined. As this report is being compiled on April 14, the June E mini is trading 9.50 higher after making a daily high of 1828.00. Usually, after the generation of a sell signal, the market tends to have a countertrend rally lasting from 1-3 days, and April 14 is the first day of the rally. We recommend waiting for one more day before considering new bearish positions. Also, on a further rally, clients who followed our recommendation and purchased out of the money calls might want to consider liquidating these positions. For those clients who previously initiated long put positions to protect long equity portfolios, continue to hold these.