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Corn:

May corn advanced 4.50 cents on heavy volume of 667,733 contracts. Volume was nearly the same as April 14 when the May contract gained 0.50 cents on volume of 665,938 contracts and total open interest declined by 21,073. On April 15, total open interest increased by 8,866 contracts, which relative to volume is approximately 45% below average, but it is important to keep in mind the May contract lost 30,464 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in May and increase total open interest.

From a price and open interest point of view, the performance on Friday was the best since April 12 when the May contract gained 6.00 cents on volume of 712,799 contracts and total open interest increased by 10,180. The COT report released on Friday, and tabulated on Tuesday April 12 revealed that managed money added only 7,284 contracts to their long positions, but liquidated 21,936 of their short positions giving corn a short ratio of 1.94:1, which is down from the recent high of the previous week of 2.19:1, but above the ratio two weeks ago of 1.72:1.

In summary, there are huge numbers of short-sellers remaining in the market that can send corn higher than fundamentals would dictate. On April 14, OIA announced that May and July corn generated short and intermediate term buy signals, and we are expecting a pullback, which typically occurs after buy signals. This should last from 1-3 days before resuming the uptrend.

As this report is being compiled on April 18, the May contract is trading 4.25 cents higher and has made a new high for the move of 3.84, which is the highest print since 3.87 1/2 made on October 27, 2015. We have no recommendation except to say do not short this market.

Soybeans:

May soybeans advanced 8.00 cents on volume of 367,695 contracts. Volume fell slightly from April 14 when the May contract lost 7.75 cents on volume of 389,091 contracts and total open interest increased by 10,304. On April 15, total open interest increased by 5,153 contracts, which relative to volume is approximately 40% below average, but the May contract lost 20,861 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in May and increase total open interest. With very few exceptions, recent price and open interest action has been acting in a bullish fashion.

As this report is being compiled on April 18, the May contract is trading nearly unchanged on the day, but has made a new high for the move of 9.64 1/4, which is the highest price since the week of August 10, 2015 when it printed 9.96 1/2. The COT report released on Friday showed that managed money was long soybeans by a ratio of 2.43:1, which is up from the previous week of 2.01:1 and the ratio two weeks ago of 2.01:1. The report showed that managed money added 19,860 to their long positions and liquidated 3,880 of their short positions.

Despite this, managed money still holds 65,574 contracts short. This should continue to provide fuel for the upside. On March 7, OIA announced that May soybeans generated a short-term buy signal and an intermediate term buy signal on March 11. We have no recommendation.

Soybean meal:

May soybean meal gained $5.80 on volume of 115,631 contracts. Volume fell substantially from April 13 when the May contract gained 7.60 on volume of 186,705 contracts and total open interest declined by 1,488. On April 15, total open interest increased by 746 contracts, which relative to volume is approximately 65% below average, but Friday’s open interest increase is one of the most positive days seen during the soybean meal rally. The May contract lost 5,320 of open interest, which means there were sufficient interest open interest increases in the forward months to offset the decline in May and increase total open interest.

On Friday, the May contract made a new high for the move of 297.10, and this has been taken out on April 18 with another new high of 299.80, the highest print since 303.80 made on November 14, 2015. On March 7, OIA announced that May soybean meal generated a short-term buy signal and an intermediate term buy signal on March 28.

According to the COT report released on Friday, managed money added 5,515 to their long positions and liquidated 7,335 of their short positions. But this still leaves manage money short soybean meal by ratio of 1.15:1, which is down from 1.50:1 the previous week and 1.32:1 the ratio of two weeks ago. We have no recommendation.

WTI crude oil:

May WTI crude oil lost $1.14 on volume of 1,253,865 contracts. Total open interest declined by 34,525 contracts, which relative to volume is average. The May contract accounted for loss of 56,943 of open interest. As this report is being compiled on April 18, the June contract is trading 31 cents lower after making a daily low of $39.00 made shortly after the Sunday evening opening on the failure of OPEC to come to an agreement to freeze production. This was the lowest print since April 8 (38.63). After making the low in the early going, the market has been moving steadily higher and has made a daily high of 41.66, which is slightly below Friday’s close of 41.71.

On April 12, May and June WTI crude oil generated short-term buy signals, which reversed the April 4 short-term sell signals. Typically, after the generation of a buy signals, markets have a tendency to pullback from 1-3 days. In the case of WTI, the market corrected on April 13 (-41 cents), April 14 (-26 cents), and April 15. At this juncture, it appears the Sunday evening low of 39.00 is a strong area of support, and though we are not bulls on crude oil, nor are not very bearish. We recommend a stand aside posture.

Gold:

June gold advanced $8.10 on light volume of 127,382 contracts. Total open interest declined by 2,675 contracts, which relative to volume is approximately 20% below average, and a total open interest decline on Friday’s advance is negative. On Friday, the June contract made a high of 1237.60, and this was below the April 14 print of 1245.90.

As this report is being compiled on April 18, the June contract is trading $1.50 higher and has made a daily high of 1243.30 and a daily low of 1231.70, which is above Friday’s print of 1226.80. Although gold remains on short and intermediate term buy signals, we are concerned about the very heavy net long position of managed money.

According to Friday’s COT report, managed money added 15,784 contracts to their long positions and liquidated 2,092, which leaves managed money were long by a ratio of 6.36:1, which is up from the previous week of 5.50:1 and the ratio two weeks ago of 6.15:1. In summary, gold remains vulnerable to downside action, especially because during the next few months from a seasonal point of view, upside for gold is minimal.  We have no recommendation.

British pound:

The June British pound advanced 51 pips on volume of 68,511 contracts. Total open interest increased 115 contracts. The open interest increase on April 15 was the first during the month of April even though the pound has advanced on several occasions during this time.

As this report is being compiled on April 18, the June contract is trading 76 pips higher and has made a daily high of 1.4294, which takes out the April 13 print of 1.4280. Taking into account the vote for Brexit is more than two months away and that speculators are heavily short the pound, we think the pound will trade counter intuitively and have a strong rally before it resumes the downtrend.

Everyone knows the vote on June 23 is potentially very bearish for the pound and huge numbers of speculators have already acted on this information. Once short-sellers been blown out, we think the pound will provide an excellent opportunity on the bearish side. On April 6, the June British pound generated a short-term sell signal and this reversed the March 14 short-term buy signal. We think the June contract will again generate a short-term buy signal. Stand aside.

Canadian dollar:

Last week, the June Canadian dollar completed a bullish moving average cross up with the 50 day moving average trading above the 200 day moving average, which means that more upside gains are likely. Remarkably, according to the latest COT report released on Friday, leverage funds remain short the Canadian dollar by ratio of 1.22:1, which is down somewhat from the previous week of 1.28:1 and from the ratio two weeks ago of 1.54:1. No recommendation.

Australian dollar:

The June Australian dollar has made a new high for the move of 77.40 on April 18, which takes out the previous high of 77.17 made April 14. This is the highest print since 77.62 made the week of June 22, 2015. The June Australian dollar is in a bullish moving average set up with the 50 day moving average of 73.91, substantially above the 200 day moving average of 71.84. We have no recommendation.