Soybeans:

July soybeans advanced 17.25 cents on volume of 184,545 contracts. Volume shrank from the 211,923 contracts traded on April 28 when July soybeans advanced 5.75 cents and total open interest declined by 14,579 contracts. Additionally, volume was below that of April 25 when 247,971 contracts were traded and July soybeans advanced 24.25 cents while total open interest declined by 19,730 contracts. On April 24, July soybeans advanced 5.25 cents on volume of 196,715 contracts and total open interest declined by 7,756 contracts. In short, volume on April 29 was the lowest since April 21 when 148,860 contracts are traded and July soybeans lost 15.00 cents while total open interest declined by 3200 contracts.

On April 29, total open interest declined by 2,323 contracts, which relative to volume is approximately 45% below average. The May contract lost 15,417 of open interest and the July 2014 through May 2015 contracts all gained open interest. However, this was not enough to bring total open interest to a positive number. July soybeans made a new contract high at $15.20 1/2, but the fact remains that low volume and a decline in total open interest indicate there was light participation and not much conviction on the part of new longs.In the previous paragraph we listed days in which soybeans advanced along with their corresponding volumes for comparison purposes. Certainly on a day when soybeans made a new contract high on the strong percentage advance, volume should have picked up and total open interest should have increased.

As this report is being compiled on April 30, July soybeans are trading 12.00 cents lower and have made a daily low of 15.02 1/4. We think soybeans remain vulnerable to the downside and the unimpressive stats in yesterday’s trading confirm our cautious approach. July soybeans remain on a short and intermediate term buy signal.

Soybean meal:

July soybean meal advanced $6.40 on total volume of 84,094 contracts. Total open interest declined only 391 contracts, which relative to volume is approximately 75% below average. The May contract lost 4,994 of open interest and there were open interest increases in the July 2014 through September 2015 contracts. As this report is being compiled on April 30, July soybean meal is trading $1.70 lower on the day. The volume and open interest stats continue to be more favorable for soybean meal than soybeans, and though we advise a stand aside posture at this juncture, we think the real fireworks could be in soybean meal. July soybean meal made a new contract high of 493.20, and as this report is being compiled on April 30, has not taken out yesterday’s high. July soybean meal remains on a short and intermediate term buy signal.

Soybean oil:

July soybean oil gained 12 points on light volume of 67,039 contracts. Total open interest declined by 375 contracts, which relative to volume is approximately 70% below average. The May contract lost 3,024 of open interest and the August 2014 through July 2015 contracts all gained open interest. As this report is being compiled on April 30, July soybean oil is trading sharply lower, down 85 points on the day and is made a daily low of 41.81. July soybean oil remains on a short and intermediate term buy signal. Stand aside.

Corn:

July corn gained 7.75 cents on volume of 338,774 contracts. Volume fell short of the 349,470 contracts traded on April 28 when July corn advanced 1.00 cent and total open interest declined by 23,339 contracts. On April 29, total open interest declined by 5,626 contracts, which relative to volume is approximately 35% less than average. The May contract lost 23,783 of open interest and the July 2014 through March 2016 contracts all gained open interest. Open interest action was far more positive on April 29, even though participation as evidenced by volume was lower than the previous day. As this report is being compiled on April 30, July corn is trading 3.50 lower, and has not taken out yesterday’s high for the move of 5.22. July corn remains on a short and intermediate term buy signal. We recommend a stand aside posture.

Chicago wheat:

July Chicago wheat advanced 8.00 cents on light volume of 90,979 contracts. Total open interest declined by 4,126 contracts, which relative to volume is approximately 75% above average meaning that liquidation was heavy on the advance. The May contract lost 5,425 of open interest and there were insufficient open interest increases in the forward months to bring down total open interest to an average or below average number. In short, market participants are not buying into the Chicago wheat rally. July wheat reached its highest level since March 27 (7.17 1/4) and as this report is being compiled on April 30 has made another new high at 7.23 3/4, its highest print since 7.25 1/4 made on March 20. As we have noted in previous reports, our preference is for 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 gained 16.00  cents on volume of 27,939 contracts. Volume increased from the 26,804 contracts traded on April 28 when KC wheat advanced 7.00 cents and total open interest declined by 1,026 contracts. On April 29, total open interest increased by a substantial 1699 contracts, which relative to volume is approximately 140% above average meaning that new longs were aggressively entering the market and bidding prices significantly higher. The May contract lost 2,103 of open interest, which makes the total open interest increase much more impressive (bullish). The July 2014 contracts through December 2015 all gained open interest. As this report is being compiled on April 30, July KC wheat is trading 8.50 higher and has made a new high for the move at 8.14, which is the highest print on the Kansas City wheat continuation chart since February 2013. On April 28, July KC wheat generated a short-term buy signal, and we are waiting for a pullback before recommending bullish positions. KC wheat is massively overbought relative to its 5 day moving average of $7.89 3/8 and the 20 day moving average of 7.57 1/2. Our concern is that the market can correct at any time, and the catalyst could be a lessening of tensions in Ukraine. We recommend a stand aside posture.

Live cattle:

August live cattle closed unchanged on volume of 45,556 contracts. Total open interest declined by 266 contracts, which relative to volume is approximately 70% below average. The April contract lost 2,069 of open interest. On April 28, August cattle generated a short-term buy signal and remains on an intermediate 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. As this report is being compiled on April 30, August cattle is trading 42.5 points lower on the day and has made a low of 1.35375. We prefer to wait one more day before recommending bullish positions, but definitely think cattle prices are headed higher and expect to see cattle prices test the February contract high of 1.51000

Cotton:

July cotton advanced 1.83 cents on surprisingly light volume of 26,186 contracts. Volume was lower than April 23 when 32,777 contracts were traded and July cotton lost 61 points while total open interest declined by 5,392 contracts. In short, from a volume standpoint, participation was lower than it should be considering that cotton broke out to make a new high for the move at 94.29. As this report is being compiled on April 30, July cotton is trading 30 points higher and has made another new high of 94.50. Although there is less than a few minutes left until cotton closes, the July contract has made a daily low of 93.81, which is above OIA’s key pivot point of 93.24. This means that July cotton will continue to rally. However, cotton is going to run into resistance at the March 26 high of 96.76..Cotton remains on a short and intermediate term buy signal. We have no recommendation.

WTI crude oil: June WTI crude oil will generate a short-term sell signal on April 30. It remains on an intermediate term buy signal.

June WTI crude oil advanced 44 cents on volume of 450,367 contracts.Total open interest increased by 7,514 contracts, which relative to volume is approximately 30% less than average. However, the June 2014 through November 2014 contracts all gained open interest, and it is rare to see the front month gain open interest regardless of a price advance or decline. However, the move yesterday and those that preceded it completely faked out market participants because as this report is being compiled on April 30, June WTI is trading $1.71 lower and has made a new low for the move at $99.35, which is the lowest print since $99.29 made on April 7. Our comments in the April 27 Weekend Wrap (and before) have kept clients out of the market by discouraging them from participating on the long side. Additionally, OIA  told clients that the key pivot point of $102.27 would be a firewall preventing WTI to move higher.

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 advanced 3.2 cents on light volume of 216,618 contracts. Total open interest increased by 2952 contracts, which relative to volume is approximately 45% less than average. However, the May contract lost 895 of open interest and June – 3636, which makes the total open interest increased much more impressive (bullish).On April 29, June natural gas made a high of $4.848, which is the highest print since February 24, 2014 when it made a high of 4.893. The total open interest increase on the price advance on the 29th was the first we have seen since April 10 when natural gas advanced 6.9 cents on volume of 509,470 contracts and total open interest increased by 13,503 contracts. This tells us that market participants are getting friendly to natural gas and it is likely that prices will continue to move higher.

Tomorrow is the natural gas storage report and this has the power to move the market significantly one way or the other. On April 22, we recommended taking profits on partial positions and write out of the money calls on the remaining position. Continue to hold this combination, however, today, we also recommend that clients should initiate new bullish positions and use today’s low of $4.751 as an exit for the new positions. Today’s low was slightly beneath the low made on April 29 of 4.754. If clients are stopped out of the new position, they will continue to hold have the partial long position coupled with short calls. The 5 day moving average stands at 4.768 and the 20 day moving average is 4.642.

Australian dollar:

The June Australian dollar advanced 21 pips on volume of 58,238 contracts. Total open interest increased by 279 contracts, which relative to volume is approximately 75% below average. The June Australian dollar made a new low for the move at 91.98, and as this report is being compiled on April 29, the Aussie is trading 7 pips higher on the day and has not taken out yesterday’s low. The June Australian dollar will continue to trade sideways to lower until such time as it is able to make a daily low above OIA’s pivot point of 92.64.The June Aussie remains on a short and intermediate term buy signal

Canadian dollar:

The June Canadian dollar advanced 59 pips on healthy volume of 62,825 contracts. Volume was below the average daily volume for March of 74,888 contracts and the average daily volume year to date of 67,750 contracts.In short, volume was a disappointment considering the magnitude of the advance. Perhaps the most positive aspect of trading in the Canadian dollar on April 29 was the massive increase of open interest totaling 4,816 contracts, which relative to volume is approximately 210% above average, which is an increase of significant proportions. As of the latest COT report, managed money is short the Canadian dollar by a ratio of 2.03:1. .We think the Canadian dollar may be a candidate for bullish positions and ready for a test of the April 9 high of 91.95. Today’s low is 90.97 and currently the market is trading 4 pips higher on the day. We prefer to wait one more day to see if the June Canadian dollar can maintain its strength. Based upon the 5 day moving average of 90.80 in the 20 day moving average of 90.89, the market is not overbought to any great extent.

Copper:

July copper lost 2.00 cents on volume of 54,976 contracts. Total open interest increased 78 contracts. As this report is being compiled on April 30, July copper is trading 3.50 lower and has made a daily low of $3.0240.The severity of the pullback concerns us and though we thought today might be the day to initiate bullish positions, our concern now is that copper may in fact generate a short-term sell signal making the buy signal generated on April 24 false. Another concern is the performance of the Shanghai Composite Index and much talk about the increasingly negative economic situation in China. Stand aside.

S&P 500 E mini:

The June S&P 500 E mini advanced 5.75 points on volume of 1,220,954 contracts. Total open interest increased by 18,416 contracts, which relative to volume is approximately 40% below average. As this report is being compiled after the release of the Federal Reserve minutes, the E mini is trading 3.50 higher and has made a daily high of 1879.50, which is the highest print since 1882.50 made on April 24. Clients should continue to hold long put positions if they hold long equity positions. The June E mini remains on a short and intermediate term buy signal.