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Corn: July corn will generate a short-term buy signal on April 14 if the daily low remains above OIA’s key pivot point of 3.70 5/8.

May corn advanced 10.75 cents on huge volume of volume 853,919 contracts. Volume was the strongest since March 31 when the May contract lost 15.50 cents on volume of 930,250 contracts and total open interest increased by a massive 56,491.  This occurred on the day of the planting intentions report.

On April 13, total open interest declined by 9,595 contracts, which relative to volume is approximately 45% below average, and a total open interest decline on yesterday’s strong advance is negative. The May contract accounted for a loss of 48,296 of open interest, and though a good portion of this was whittled down by open interest increases in the forward months, there was insufficient new positions taken to increase total open interest.

This is not a surprise considering that in the latest COT report, managed money is short corn by ratio of 2.19:1, which is up from the previous week of 1.72:1 and the ratio two weeks ago of 2.03:1. In this COT report, managed money liquidated 14,467 of their long positions and added 44,635 to their short positions. Whereas, commercial interests added a massive 59,083 to their long positions and liquidated only 3,200 of their short positions. We have no recommendation.

Soybeans:

May soybeans advanced 19.50 cents on heavy volume of 533,410 contracts. Volume exceeded that of April 12 when the May contract gained 8.00 cents on volume of 460,159 contracts and total open interest increased by a massive 18,321 contracts. Additionally, volume exceeded that of March 31 when the May contract gained 1.75 on volume of 361,828 contracts and total open interest increased by 13,687.

On April 13, total open interest increased strongly again, this time by 18,700 contracts, which relative to volume is approximately 20% above average indicating that new buyers continue to flood into soybeans and driving prices to a new high for the move of 9.57 3/4. As this report is being compiled on April 14, the May contract is trading 6.50 cents lower after making a daily high of 9.59 1/2, which is the highest print since 9.96 1/2 made the week of August 10, 2015.

According to the COT report released last Friday, managed money was long soybeans by ratio of 2.01:1, which is exactly the same as the previous week of 2.01:1, but up from the ratio two weeks ago of 1.73:1. We have no doubt that the net long position of managed money will increase in tomorrow’s report.

On March 7, May soybeans generated a short-term buy signal and an intermediate term buy signal on March 11. The moving averages for the July contract are in a bullish set up with the 20 day moving average standing at 9.22 7/8, 50 day 8.98 7/8, 100 day 8.92 3/4 and the 200 day moving average of  9.06 7/8. We have no recommendation.

Soybean meal:

May soybean meal advanced $7.60 on heavy volume of 186,705 contracts. Total open interest declined by 1,488 contracts, which relative to volume is approximately 55% below average and an open interest decline on yesterday’s strong advance is negative. The May contract accounted for loss of 9,545 of open interest and there were insufficient open interest increases in the forward months to offset the decline in May.

As this report is being compiled, the May contract is trading nearly unchanged on the day, but has made a new high for the move of 295.40, which is the highest print since 297.70 made on November 6, 2015. The COT report released last Friday showed that managed money was short soybean meal by ratio of 1.50:1, which was up from the previous week of 1.32:1 and slightly below the ratio two weeks ago of 1.56:1.

As usual, managed money the “Wrong Way, Corigans” of the futures market were reliable predictors of the market bottom by being short at the low end of the trading range. On March 7, OIA announced that May soybean meal generated a short-term buy signal and an intermediate term buy signal on March 28. We have no recommendation.

Lean hogs: On April 13, June and July lean hogs generated intermediate term sell signals after generating short term sell signals on April 1.

July lean hogs lost 1.05 cents on total volume of 40,222 contracts. Total open interest increased by 469 contracts, which relative to volume is approximately 50% below average. The April, May and August contracts lost a total of 600 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in those three delivery months. Yesterday’s action was clearly bearish. As this report is being compiled on April 14, the July contract is trading 72.5 points lower on the day. Rallies should be sold.

Cotton: On April 13, May and July cotton generated intermediate term buy signals after generating short-term buy signals on April 1.

Dollar index:

The June dollar index advanced by a strong 81.7 points on light volume of 26,477 contracts. Surprisingly, total open interest increased just 78 contracts. Yesterday’s action confirms the weak state of the dollar index and confirms the bearish set up whereby the 50 day moving average is trading substantially below the 200 day average. We have no recommendation and see no reason to be involved in the dollar index.

Euro:

The June euro lost 1.14 cents on volume of 198,527 contracts. Total open interest increased by 1,508 contracts, which relative to volume is approximately 55% below average, but an open interest increase on yesterday’s strong decline is negative. As this report is being compiled on April 14, the June contract is trading 15 pips lower and is made a daily low of 1.1253, which is the lowest print since 1.1194 made on March 29.

The June contract is getting close to generating a short-term sell signal and this will occur if the daily high is below OIA’s key pivot point for April 14 of 1.1282. The month of May is one of the weakest for the euro, with the other two being January and August.

Keep in mind the euro continues to be in a longer-term bullish set up with the 50 day moving average trading above the 100 and 200 day moving averages. If the euro generates a short-term sell signal, support should be found at the year to date moving average of 1.1124 and the 200 day moving average of $1.1110.We have no recommendation.

Dow Jones Transportation Index: The transportation Index will generate a short-term buy signal on April 14 if the daily low remains above OIA’s key pivot point for April 14 of 7925.14. This would reverse the April 7 short term sell signal.