Soybeans:

July soybeans advanced 24.25 cents on volume of 247,971 contracts. Volume was higher than April 15 when July soybeans gained 25.00 cents on volume of 241,654 contracts and total open interest increased by 7,829 contracts. On April 25, total open interest declined by a massive 19,730 contracts, which relative to volume is approximately 210% above average meaning that liquidation was extremely heavy on the largest advance since April 15. The May contract lost 31,293 of open interest. As this report is being compiled on April 28, July soybeans are trading 3.25 cents higher after making a new high for the move at 15.13, which takes out the previous high of 15.12 1/4 made on April 21 by a fraction. We have been cautioning clients to be on the sidelines and the massive decline of open interest on the 25th is a clear indication that there are not enough new buyers to move prices higher. The dominant action in Friday’s trade was liquidation and there were insufficient open interest increases in the July forward months to offset the decline in the May contract. Continue to stand aside. We think there will be a terrific opportunity on the long side during the late may through mid July time frame. Soybeans remain on a short and intermediate term buy signal.

Soybean meal:

July soybean meal advanced $10.70 on relatively heavy volume of 93,026 contracts. Volume was the highest since April 22 when 96,759 contracts were traded and July soybean meal lost $5.80 while total open interest declined by 7,297 contracts. On April 25, total open interest increased by 1522 contracts, which relative to volume is approximately 35% below average, but keep in mind the May contract lost 5,524 of open interest, which makes the total open interest increase more impressive (bullish). Of the grains covered in this report, soybean meal was the only commodity that had an open interest increase on the price advance Friday. We have been saying for quite some time that, soybean meal is the out performer and it will continue to lead the soybean complex. As this report is being compiled on April 28, July soybean meal is trading $1.50 higher and has made a new contract high at $488.80. Like soybeans, we advise a stand aside posture. We think there will be a terrific opportunity on the long side during the coming month. July soybean meal remains on a short and intermediate term buy signal.

Soybean oil:

July soybean oil advanced 29 points on volume of 93,429 contracts. Total open interest declined by a massive 10,571 contracts, which relative to volume is approximately 360% above average meaning that liquidation was off the charts heavy on the modest advance. The May contract lost 12,095 of open interest. As this report is being compiled on April 28, July soybean oil is trading 32 points lower and is currently trading on the lows of the day. We recommend a stand aside posture. July soybean oil remains on a short and intermediate term buy signal.

Corn:

July corn gained 5.50 cents on volume of 280,268 contracts. Considering the magnitude of the advance, volume was significantly below that of April 24 when corn lost 2.25 cents on volume of 327,997 contracts and total open interest declined by 6,761 contracts. Additionally, volume was below the 316,285 contracts traded on April 23 when July corn advanced 7.50 cents and total open interest increased by a massive 22,813 contracts. In short, volume was the lowest since April 17 when 267,462 contracts were traded and July corn lost 3.00 cents while total open interest increased by 3.243 contracts.

Although volume was disappointing, open interest was even more so having lost 15,493 contracts, which relative to volume is approximately 120% above average. Liquidation was the order of the day as July corn rose to its highest price since April 9 when July made its high for the move at $5.24 1/4. As this report is being compiled on April 28, July corn is trading 3.00 cents higher and has made another new high for the move at $5.18 1/2, which is one half cent shy of the May contract April 9 high of $5.19. July corn remains on a short and intermediate term buy signal, but we see no compelling reason to be long at this juncture.

Chicago wheat:

July Chicago wheat advanced 11.75 cents on light volume of 99,665 contracts. Volume traded on April 25 was the lowest since April 23 when 83,476 contracts were traded and July wheat advanced 3.25 cents while total open interest increased by 5,092 contracts. On April 25, total open interest declined by 8,341 contracts, which relative to volume is approximately 225% above average meaning that liquidation was extremely heavy on the advance. This is bearish open interest action relative to the price advance. The May contract lost 15,813 of open interest. As this report is being compiled on April 28, July Chicago wheat is trading 3.25 cents lower after making a daily high of 7.17, which is the highest print since April 16 of 7.18 1/4. Until July Chicago wheat makes a daily low above OIA’s key pivot point of $7.01 5/8, we recommend a stand aside posture. Even when this occurs, our preference is the long side of Kansas City wheat. July Chicago wheat remains on a short and intermediate term buy signal.

Kansas City wheat: July Kansas City wheat will generate a short-term buy signal on April 28.

July Kansas City wheat advanced 14.00 cents on volume of 22,658 contracts. Total open interest declined by 536 contracts, which relative to volume is 5% below average. The May contract lost 2,642 of open interest. From a price and open interest standpoint relative to volume, Kansas City wheat outperformed Chicago. As this report is being compiled on April 28, July KC wheat is trading 1.75 cents higher after making a new high for the move at $7.89 3/4, which is the highest print since $7.93 made on March 26. In previous reports, we wrote there were two conditions we wanted to see before recommending bullish positions. First, out performance by wheat compared to corn and second that Kansas City wheat generate a short-term buy signal. We have been seeing out performance by both Chicago and Kansas City wheat and today, Kansas City wheat will generate a short-term buy signal. As is usually the case after the generation of a buy signal, the market has a tendency to pullback from 1-3 days, and this is the opportunity to initiate bullish positions. Until this occurs, stand aside.

Cattle:

June cattle advanced 92 points while the August contract gained 70 points on total volume of 46,510 contracts. Total open interest increased by a very disappointing 249 contracts, which relative to volume is approximately 70% below average. As this report is being compiled on April 28, June cattle is trading 15 points higher on the day after making a new high for the move at 1.37575, which is its highest print since March 31 (1.37850). June cattle will not generate a short-term buy signal, however, the August contract has made a new contract high on April 28 and will generate a short-term buy signal. From now on we will be reporting on the August contract.

Cotton:

July cotton gained 5 points on very light volume of 9,432 contracts. Volume was the lightest since March 17 when 9,141 contracts were traded. On April 25, open interest increased by a massive 625 contracts, which relative to volume is approximately 160% above average meaning that new longs and shorts were aggressively entering the market, but prices moved only fractionally higher. The May contract lost 27 of open interest. As this report is being compiled on April 28, July cotton is trading 1.39 cents lower and is currently trading on the lows of the day. We think it is inevitable that July cotton will generate a short-term sell signal, and since early April, cotton is essentially unchanged. For July cotton to generate a short-term sell signal, the high of the day must be below 91.36.

From the April 24 report:

“Though cotton remains on a short and intermediate term buy signal, we are not enthusiastic bulls. We think July cotton made its top on March 26 when  it made a high of 96.76 on huge volume of 56,095 contracts (the highest volume since February 13, 58,512 ) and then collapsed in a key reversal day to close 2.18 cents lower on the day. At best, July cotton could conceivably trade near the March 26 high, but we think this is going to be a struggle if it occurs at all. Stand aside.”

WTI crude oil:

June WTI crude oil lost $1.34 on light volume of 420,970 contracts. Volume was the smallest since April 3 when 407,557 contracts were traded and WTI advanced 67 cents while total open interest increased by 5,536 contracts. On April 25, total open interest declined by only 4,104 contracts, which relative to volume is approximately 50% below average. The June contract accounted for loss of 19,306 of open interest. As this report is being compiled on April 28, June WTI is trading 4 cents lower and has made a new low for the move at $100.33. The volume and open interest action relative to the price decline clearly indicates that longs are refusing to liquidate as prices move lower. We continue to advocate a stand aside posture because we think lower prices are in store. WTI remains on a short and intermediate term buy signal.

From the April 27 Weekend Wrap:

“OIA has been actively discouraging bullish positions in WTI crude oil and we have seen the rally as one more of logistics about moving crude out of Cushing Oklahoma rather than of supply shortages. Additionally, any narrative regarding the impact of the Russian-Ukraine situation is a red herring because although Brent crude has advanced, and remains on a short and intermediate term buy signal, the move has been fairly muted. Apparently, participants in the Brent crude market do not think there is an imminent cut off of crude/natural gas supply to Europe. When looking at performance of WTI on the year to date basis, the June contract has only advanced 3.45% while June Brent has gained just 1.90%, not exactly a strong performance over a period of nearly 5 months.”

“OIA thinks that WTI will generate a short-term sell signal, perhaps early next week. Based upon Friday’s pivot point, June WTI would need to make a daily low above $102.27 to resume its rally.”

Natural gas:

June natural gas lost 6.5 cents on very light volume of 163,330 contracts. Volume was the lowest since April 16 when 156,734 contracts were traded and natural gas lost 3.7 cents while total open interest declined by 3,980 contracts. On April 25, total open interest declined by 5,949 contracts, which relative to volume is approximately 40% above average meaning that liquidation was fairly substantial on Friday’s decline. The May contract lost 8,232 of open interest. As this report is being compiled on April 28, June natural gas is trading 14.1 cents higher and has made a high of $4.813, which is the highest print since April 24 (4.818). On April 22, we recommended the partial liquidation of bullish positions and advised writing out of the money calls on remaining positions. Continue to hold the out of the money calls and remaining the bullish positions.

Australian dollar:

The June Australian dollar advanced 10 pips on light volume of 50,570 contracts. Total open interest declined by 394 contracts, which relative to volume is approximately 60% less than average. As this report is being compiled on April 28, the June Australian dollar is trading 19 pips lower and has made a new low for the move at 92.13.

From the April 27 Weekend Wrap:

“The hefty long position of managed money will begin to pressure prices as the June Australian dollar moves lower. On Friday, the June contract closed at 92.38, which is below the 20 day moving average of 92.77. It appears likely the June Aussie is headed for the 50 day moving average of 90.97.”

“As a result, the June Australian dollar may generate a short-term sell signal. For the rally to resume, the June Australian dollar must make a daily low above 92.63. However, we think rallies will be muted due to the very large number of speculative longs showing losses on positions. We think speculators will use advances to liquidate positions, which will serve to cap any major rally.”

Copper:

July copper gained 50 points on volume of 61,928 contracts. Total open interest declined by 2,319 contracts, which relative to volume is approximately 45% above average meaning that liquidation was substantial on the advance. As this report is being compiled, July copper is trading 70 points lower on the day. After generating a short-term buy signal on April 24, we have been expecting copper to decline from 1-3 days before it is wise to enter bullish positions. Keep in mind, copper is highly volatile and the options market is illiquid, which makes it difficult to trade.

S&P 500 E mini:

The June S&P 500 E mini lost 13.00 points on volume of 1,510,023 contracts. Total open interest increased by 1,173 contracts, which is minuscule and dramatically below average. As this report is being compiled on April 28, the June E mini is trading 7.00 points lower after making a new low for the move at 1844.00. Continue to maintain long put protection if holding long on equity positions. The E mini remains on a short and intermediate term buy signal, and today’s decline is the second day after the generation of the short-term buy signal on April 23. According to OIA’s protocols there may be one more day of declines, but just as likely, April 28 could be the end of the move lower.