Soybeans:

July soybeans lost 6.50 cents on fairly light volume of 191,663 contracts. Volume was the lowest since April 10 when 179,901 contracts were traded and soybeans declined 13.00 cents while total open interest declined by 938 contracts. On April 17, total open interest declined by 176 contracts, which is minuscule and dramatically below average. The May contract accounted for loss of 9,254 of open interest. As this report is being compiled on April 21, July soybeans are trading 23.50 lower and has made a low of $14.73 1/2. On April 17, July soybeans made their contract high at $15.08, and the May contract made a high of 15.18. On the 21st, May soybeans made another new high at 15.25 and July 15.12 1/4. Today’s high in the May contract is slightly above the high made on July 22, 2013 of 15.20.

We been cautioning clients to stand aside despite the bullish fundamentals because the market is massively overbought and due for correction. At the very least, we expect July soybeans to dip to the 20 day moving average of 14.50 1/8, and prefer a much healthier move to 13.97 5/8. We want to see speculative longs shaken out of the market before contemplating bullish positions. Soybeans remain on a short and intermediate term buy signal. Stand aside.

Soybean meal:

July soybean meal lost $1.80 on light volume of 77,777 contracts. Total open interest increased by 646 contracts, which relative to volume is approximately 55% below average. The May contract lost 5,239 of open interest. As this report is being compiled on April 21, July soybean meal is trading $6.20 lower. Like soybeans, soybean meal is massively overbought and we look for a move to the 20 day moving average of $464.90 and preferably to the 50 day moving average of 445.40. Soybean meal remains on a short and intermediate term buy signal. We have no recommendation other than to stand aside

Soybean oil:

July soybean oil declined 27 points on volume of 104,856 contracts. Total open interest declined by 4,460 contracts, which relative to volume is approximately 55% above average. The May contract lost 11,484 of open interest. On April 15, July soybean oil generated a short-term buy signal, and as is usually the case after the generation of the signal, the market has a tendency to pullback from 1-3 days. April 17 was the first day of the pullback and as this report is being compiled on April 21, July soybean oil is trading 49 points lower after making a daily low of 42.89. We will be monitoring soybean oil closely to determine whether it makes sense to consider bullish positions if it pulls back for another day. This is important because it appears that soybeans are in a corrective mode, and as result  beans may take soybean oil down with it. Stand aside. 

Corn:

July corn lost 3.00 cents on lighter than normal volume of 267,462 contracts. Volume was the lowest since April 14 when 260,885 contracts were traded and corn advanced 4.50 cents while total open interest increased by 3,921 contracts. On April 17, total open interest increased by 3,243 contracts, which relative to volume is approximately 45% less than average. As this report is being compiled on April 21, July corn is trading 8.25 cents lower and has made a new low for the move at 4.90 3/4.

From the April 20 Weekend Wrap:

“We received the first sign of bullish disillusionment by managed money when the April 8 COT report was released. This report showed for the 1st time that managed money with liquidated long positions and added to short positions. This week’s report confirmed the sentiments of the April 8 report. Thus far in the 2nd quarter, July corn has lost 1.23% and is in last place for performance in the 2nd quarter of the grains we follow. If we examine performance for July corn for the past month, it is in 2nd to the last place with a gain of 16.50 cents, or +3.41% with July Chicago wheat in last place with a gain of 16.50 cents or a gain of 2.48%. Some money has been made by longs during the past month but it has been minimal and as we have observed in the past: when markets stop going up, they start going down. July corn remains on a short and intermediate term buy signal. Stand aside.”

Chicago wheat:

July Chicago wheat gained 3.75 cents on volume of 91,301 contracts. Total open interest increased by 737 contracts, which relative to volume is approximately 60% below average. The May contract lost 2,201 of open interest. As this report is being compiled on April 21, July Chicago wheat is trading 25.75 cents lower and has made a daily low of 6.70 1/4. Most likely, July Chicago wheat will generate a short-term sell signal on April 21.

From the April 16 report:

“With the exception of the September 2014 contract, open interest increased in the July 2014 through September 2015 contracts, which offset the decline in the May contract. This is bearish open interest action. However, as we write this report on April 17, July Chicago wheat is trading 6.75 cents higher, but has not made a daily low above OIA’s key pivot point for the July contract of $7.01.”

“Until this occurs, wheat will struggle to move higher. There is one huge caveat: much of the move in wheat can be attributed to rising tensions in Ukraine and the black sea region, which could severely crimp exports from the area. This is a double-edged sword because if there is a lessening of tension, the impact could be severely adverse to wheat prices. The Russian economy has taken a large hit from the crisis and the leadership of Russia cannot afford to see their economy slips deeper into an economic mire. July Chicago wheat remains on a short and intermediate term buyignal.”

Kansas City wheat:

July Kansas City wheat advanced 4.25 cents on volume of 22,132 contracts. Total open interest declined by a massive 1,188 contracts, which relative to volume is approximately 100% above average meaning that liquidation was heavy on the advance. The May contract lost 2,424 of open interest. As we write this report on April 21, July KC wheat is trading 25.00 cents lower and has made a daily low of $7.37. KC wheat generated a short-term sell signal on April 10 and remains on an intermediate term buy signal.

Cotton:

July cotton lost 23 points on volume of 27,700 contracts. Total open interest declined by a massive 2,001 contracts, which relative to volume is approximately 185% above average meaning that liquidation was extremely heavy. The May contract accounted for loss of 7,986 of open interest. As this report is being compiled on April 21, July cotton is trading 43 points lower and has made a daily low of 91.55, which is slightly above the low made on April 16 of 91.50. On April 10, cotton generated a short-term sell signal, but has rallied and has not been able to make a daily low above OIA’s pivot point on April 21 of 92.04. We are awaiting confirmation of a short-term buy signal, or a re-confirmation of the short-term sell signal. Until we get a reading one way or the other, we recommend a stand aside posture.

WTI crude oil:

June WTI crude oil gained 34 cents on volume of 555,756 contracts. Total open interest increased by 6,600 contracts, which relative to volume is approximately 45% less than average. However, the May contract lost 25,909 of open interest, which makes the total open interest increased much more impressive (bullish). As this report is being compiled on April 21, June WTI is trading 4 cents higher on the day. June WTI remains on a short and intermediate term buy signal. We have no recommendation.

Natural gas:

May natural gas advanced 21.1 cents on fairly heavy volume of 406,021 contracts. Volume was the highest since April 10 when 509,470 contracts were traded and May natural gas advanced 6.9 cents while total open interest increased by 13,503 contracts. On April 17, open interest declined by 1,114 contracts, which relative to volume is approximately 90% below average. The May contract lost 10,710 of open interest. Although the open interest decline was minor, the fact there was a decline at all is bearish, at least in the short-term. The open interest action on April 17 is a big disappointment. As this report is being compiled on April 21, May natural gas is trading 2.2 cents lower, but in the early evening session on April 20 made a new high for the move at $4.789. Stay with bullish positions recommended in the report of April 14.

Euro:

The June euro lost 2 pips on light volume of 110,060 contracts. Total open interest declined by 1,238 contracts, which relative to volume is approximately 45% less than average. As this report is being compiled on April 21, the June euro is trading 29 pips lower and is at the lows of the day. For the euro to generate a short-term sell signal, the high for the day must be below 1.3777. We have no recommendation.

Gold: On April 17, June gold generated a short-term  signal, but remains on an intermediate term buy signal.

June gold lost $9.60 on volume of 110,923 contracts. Total open interest declined by 613 contracts, which relative to volume is approximately 70% below average. As this report is being compiled on April 21, June gold has made a new low for the move at $1281.80 on light volume. Stand aside.

From the April 16 report:

Gold: The bullish positions that we recommended in the April 14 report should be liquidated today because we think it is imminent that gold will generate a short-term sell signal, This will reverse the short-term buy signal generated on April 14. Gold remains on an intermediate term buy signal.

Platinum: On April 21, July platinum generated an intermediate term sell signal after generating a short-term sell signal on April 16.

S&P 500 E mini:

The S&P 500 E mini advanced 5.25 points on light volume of 1,260,176 contracts. Total open interest increased by 10,238 contracts, which relative to volume is approximately 60% less than average. As this report is being compiled on April 21, the June E mini is trading 6.75 points higher on extremely low volume and has made a high of 1865.00, which is slightly above the April 21 pivot point of 1864.25. In order for the E mini to resume its uptrend the low the day must be above the pivot point. After generating a short-term sell signal on April 11, the E mini has rallied for 5 consecutive days, which violates OIA’s 3 day countertrend rally protocol once a sell signal is generated. In short, the E mini is on the cusp of generating a short-term buy signal, but the terrible volume indicates a complete lack of enthusiasm for the upside. We continue to think it is prudent to maintain long puts and the degree to which out of the money long calls are held should be based upon your overall view of the market and risk profile. At this juncture, we would not add new long puts.