Soybeans:

May soybeans advanced 13.25 cents on volume of 202,714 contracts. Volume declined slightly from the 203,874 contracts traded on April 11 when May soybeans declined 19.25 cents and open interest increased by 4,047 contracts. On April 14, total open interest increased by 8,078 contracts, which relative to volume is approximately 55% above average. The May contract lost 18,344 of open interest, which makes the total open interest increase much more impressive (bullish). As this report is being compiled on April 15, May soybeans are trading 25.50 cents higher and is on its way to test the April 9 high of 15.12. Though soybeans are on a short and intermediate term buy signal, we have cautioned clients against being long at current levels due to the risk of order cancellations by China, and the seasonal tendency for soybeans to decline in the current period. As we have said before, we think soybeans have the wherewithal to move sharply above current levels, but are more inclined to be long during the late May through mid July time frame.

Soybean meal:

May soybean meal advanced $6.20 on volume of 75,391 contracts. Total open interest declined by 1,639 contracts, which relative to volume is approximately 50% below average. The May contract lost 9,186 of open interest. As this report is being compiled on April 15, May soybean meal is trading $9.60 higher and has made a daily high of $490.70, which is below the April 9 high of 490.90. Like soybeans, our preference is to be long soybean meal in the late May through mid July time frame. May soybean meal remains on a short and intermediate term buy signal.

Corn:

May corn advanced 4.50 cents on volume of 260,885 contracts. Volume was the lowest since April 4 when 248,782 contracts were traded and May corn advanced 1.75 cents while total open interest increased by 5,210 contracts. On April 14, total open interest increased by 3,921 contracts, which relative to volume is approximately 40% below average. The May contract lost 16,923 of open interest, which makes the total open interest increased more impressive (bullish). On April 14, May corn made a high of 5.07, which was the highest print since April 9 of 5.19. Despite this, volume was significantly below recent sessions and the total open interest increase was significantly below average. As this report is being compiled on April 15, May corn is trading 2.25 cents higher but has not taken out yesterday’s high. We think that corn will be pulled higher by the bullish action in wheat. May corn remains on a short and intermediate term buy signal. We have no recommendation.

Chicago wheat:

May Chicago wheat advanced 18.50 cents on heavy volume of 149,048 contracts. Volume was the highest since April 10 when 163,326 contracts were traded and May wheat lost 6.75 cents while total open interest increased by 699 contracts. On April 14, total open interest declined by 7,498 contracts, which relative to volume is approximately 100% above average, meaning that liquidation was extremely heavy on the advance. The May contract lost 11,119 of open interest. As this report is being compiled on April 15, May wheat is trading 16.50 higher and has made a new high for the move at $7.02 3/4. This is the highest price for May Chicago wheat since it made a high at 7.02 on March 31. For the move higher to continue, the low for the day must be above $6.84 1/8. Today’s low is 6.73 3/4. The move higher is a result of turmoil in Ukraine and the likelihood that exports from the black sea region may be severely impacted. The open interest decline on yesterday’s advance is clearly negative, and the market may need to see further upside action before getting new participants on board. May Chicago wheat remains on a short and intermediate term buy signal. At this juncture we have no recommendation.

Kansas City wheat:

May Kansas City wheat advanced 22.50 cents on heavy volume of 37,131 contracts. Volume was the highest since April 9 when 42,715 contracts were traded and May KC wheat lost 8.25 cents while total open interest declined by 214 contracts. On April 14, total open interest declined by 678 contracts, which relative to volume is approximately 25% below average. The May contract lost 2,719 of open interest. As this report is being compiled on April 15, May KC wheat is trading 15.75 cents higher, and has taken out the April 1 high of $7.65 1/4. On April 10, May KC wheat generated a short-term sell signal, and for this to be reversed, the low for the day must be above $7.52 7/8. The decline of open interest on a strong advance is negative and at this juncture we recommend a sideline stance. If the situation in Ukraine changes for the better, we could see very sharp moves to the downside.

Sugar #11:

July sugar lost 14 points on fairly heavy volume of 176,549 contracts. Total open interest increased by 463 contracts, which is minuscule and dramatically below average. The May contract lost 17,785 of open interest, which makes the total open interest increase more impressive (bearish). On April 14, July sugar made a new low for the move at 17.24, which took out the April 2 low of 17.26. As this report is being compiled on April 15, July sugar is trading 15 points higher on the day. For those who took our recommendation per the April 8 report, stay with bearish positions.

Cotton: 

July cotton advanced 1.83 cents on volume of 27,364 contracts. Volume was below the 29,934 contracts traded on April 8 when cotton advanced 1.17 cents and total open interest increased by 1,104 contracts. Volume on April 14 was the lowest since April 4 when 24,618 contracts were traded and cotton advanced 1.42 cents while total open interest increased by 1,043 contracts. On April 14, total open interest declined by 556 contracts, which relative to volume is approximately 20% below average, but the fact that open interest declined on a strong advance is bearish. Additionally, July cotton traded to its highest level (92.91) since April 9 (92.92), yet volume remained tepid. As this report is being compiled on April 15, July cotton is trading 1.51 cents lower. Today’s high of 92.69 fell short of yesterday’s high of 92.91, and cotton did not have the follow-through to break above yesterday’s high. Managed money is massively long cotton and according to the most recent COT report, they are long by ratio of 7.15:1. This will provide plenty of fuel for a continued downside move. Cotton generated a short-term sell signal on April 10, but remains on an intermediate term buy signal.

WTI crude oil:

May WTI crude oil advanced 31 cents on volume of 589,097 contracts. Volume declined from the 644,537 contracts traded on April 11 when May WTI advanced 34 cents and total open interest declined by 2,338 contracts. On April 14, total open interest declined by 14,300 contracts, which relative to volume is average. The May contract lost 21,838 of open interest. For the past 2 days (April 11 and 14), WTI crude has advanced 65 cents and total open interest has declined by 16,638 contracts. It appears that market participants are reluctant to hold contracts as WTI prices move to the very high-end of the range. As this report is being compiled May WTI is trading 27 cents lower and has made a daily high of $104.05, which is below yesterday’s high of 104.55 and the April 11 high of 104.44.

Brent crude oil: June Brent crude oil will generate a short and intermediate term buy signal on April 15.

June Brent crude oil advanced $1.67 on volume of 698,677 contracts. Volume was the highest since April 8 when 733,668 contracts were traded and June Brent crude oil advanced $1.80 and total open interest increased only 9,052 contracts, which is significantly below average. On April 14, total open interest declined by a massive 31,659 contracts, which relative to volume is approximately 75% above average meaning liquidation on the advance to new highs ($109.14) was massive. When the performance of April 8 is combined with April 14, a bearish picture emerges despite Brent crude oil generating a short and intermediate term buy signal on April 15. It appears the market is moving higher based upon news coming out of Ukraine. As this report is being compiled on April 15, June Brent crude oil is trading 59 cents higher and has made a new high for the move at 109.75. We have no recommendation.

Heating oil: On April 14, May heating oil generated a short and intermediate term buy signal.

Natural gas: OIA recommends the initiation of bullish positions in natural gas. We recommend using options due to natural gas’ volatility. Although we do not have a an exit point for the trade, May natural gas should not trade significantly below $4.475.

May natural gas lost 6 cents on very light volume of 179,908 contracts. Volume was the lowest since April 4 when 149,974 contracts were traded and May natural gas lost 3.1 cents while total open interest increased by 8,392 contracts. On April 14, total open interest declined by 6,202 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly heavy, although total participation was light. The May contract lost 17,853 of open interest. It is positive when open interest declines with price, especially when natural gas is on a short and intermediate term buy signal. 

We see a pattern of volume expansion on price advances and volume contraction on price declines, which is positive. As this report is being compiled on April 15, May natural gas is trading unchanged on the day after making a daily low of $4.511, which is the lowest print since April 9 ($4.498). On April 10, May natural gas generated a short-term sell signal, which reversed the short-term sell signal generated on March 12. Since then, the market has conformed to the 3 day pullback protocol and April 15 is the 3rd day. Natural gas remains on a short and intermediate term buy signal.

Euro:

The June euro lost 66 pips on very light volume of 138,459 contracts. Total open interest increased by 1,686 contracts, which relative to volume is approximately 45% less than average. As this report is being compiled on April 15, the June euro is trading 6 pips lower and has taken out yesterday’s low of 1.3806 (1.3787).. The June euro remains on a short and intermediate term buy signal.

Canadian dollar: OIA recommends initiating bullish positions in the Canadian dollar on April 15. Use the April 15 low of 90.66 or 90.58 as an exit point for bullish positions

The June Canadian dollar advanced 10 pips on light volume of 34,955 contracts. Total open interest increased by 1,514 contracts, which relative to volume is approximately 65% above average. Yesterday, the June Canadian dollar made a low of 90.84, and on April 15 has made another new low at 90.66. Since generating an intermediate term buy signal on April 9, the Canadian dollar has pulled back for 3 days, which is standard after generating a buy signal. Today’s low of 90.66 should be the extent of the downside move, perhaps as low as 90.58. We would go so far as to say that if the Canadian dollar does not trade positively tomorrow, the likelihood of it regaining momentum will be diminished.

Gold: On April 14, June gold generated a short-term buy signal and remains on an intermediate term buy signal.

OIA recommends the initiation of bullish positions in June gold and use today’s low of 1284.40 as an exit point for the trade.

June gold advanced $8.50 on light volume of 106,000 857 contracts. Total open interest increased by 5,426 contracts, which relative to volume is approximately 100% above average meaning that massive numbers of new longs were entering the market, though overall participation was low as evidenced by the volume. As this report is being compiled on April 15, June gold is trading $23.40 lower and has made a low of $1284.40, which is the lowest print since April 4 when the low was exactly 1284.40. On April 14, June gold closed at 1327.50, which is the highest close since March 21 (1336.00). Between 5:15 a.m.-5: 30 a.m. CDT, June gold fell from 1303.40 down to 1284.40 on volume of 19,395 contracts. The market has not tested the low as of the writing of this report

S&P 500 E mini:

The June S&P 500 E mini gained 12.75 points on volume of 1,888,268 contracts. Open interest increased by only 2,412 contracts, which is minuscule and dramatically below average. As this report is being compiled on April 15, the June E mini is trading 4.75 points higher after making a low of 1809.25. Yesterday represented the first day of the countertrend rally after the S&P 500 E mini generated a short-term sell signal on April 11. We are looking for a second and possibly a third day rally before recommending the initiation of bearish positions, and lightening up on out of the money calls for those clients who hold long equity positions