Soybeans: On July 1, August soybeans generated an intermediate term sell signal after generating a short-term sell signal on June 6.

On July 1, November soybeans generated an intermediate term sell signal after generating a short-term sell signal on June 6.

August soybeans lost 2.00 cents while the November contract lost 9.75 on total volume of 240,693 contracts.Total open interest declined by 1,257 contracts, which relative to volume is approximately 75% below average. The July contract lost 2,941 of open interest and August – 1,190.    Yesterday, August soybeans made a low of $13.05, which is the lowest print since 13.01 1/2 made on February 28, 2014.The November contract made a low of 11.32, which is its lowest print since 11.31 made on February 19, 2014. As this report is being compiled on July 2, August soybeans are trading 8.75 lower while the November contract is -9.75.We advise a stand aside posture because the market is deeply oversold and is liable for a massive short covering rally, especially since the growing season is far from over.

Soybean meal: On July 1, August soybean meal generated an intermediate term sell signal after generating a short-term sell signal on June 11.

August soybean meal lost 70 cents on volume of 104,997 contracts. Total open interest increased by a massive 6786 contracts, which relative to volume is approximately using 150% above average meaning that new short sellers and new buyers were aggressively entering the market, but neither side was able to move the market much by the close. The the July contract lost 1226 of open interest, which makes the total open interest increase more impressive (bearish. August soybean meal made a low of $420.20, which is its lowest print since $414.15 made on March 24. As this report is being compiled on July 2, August soybean meal is trading $1.90 lower and has made a low of 426.50. Like soybeans, we continue to advocate a stand aside posture because the growing season is ahead and weather scares are part and parcel of the season causing very sharp rallies.

Soybean oil: On July 1, August soybean oil generated a short-term sell signal and remains on an intermediate term sell signal. 

August soybean oil gained 2 points on volume of 130,095 contracts. Total open interest increased only with 67 contracts. The July contract lost 1,160 of open interest, August – 1,798, September -185. As this report is being compiled on July 2, August soybean oil is trading 31 points lower and has made a new low for the move at 38.58. Stand aside.

Corn:

September corn lost 2.75 cents on volume of 283,657 contracts. Total open interest declined by 7,035 contracts, which relative to volume is average. The July contract lost 2,934 of open interest, September – 1390, December -3,792.Yesterday, September corn made a new contract low at $4.10 1/4 and as this report is being compiled on July 2, corn is taken out that low (4.10).Due to the growing season, we recommend a stand aside posture.

Live cattle:

August live cattle gained 1.425 cents on volume of 50,503 contracts. Volume was sharply below June 27 when August cattle lost 1.625 cents on volume of 67,782 contracts and total open interest declined by 2,645 contracts. On July 1, total open interest increased by 2242 contracts, which relative to volume is approximately 75% above average meaning that new longs were aggressively entering the market and driving prices higher. As this report is being compiled on July 2, August cattle is trading 57.5 points higher and has made a new all-time high at 1.53200. Stand aside.

Sugar #11: On July 1, October sugar generated a short and intermediate term sell signal after generating a short and intermediate term buy signal on June 19.

October sugar lost 21 points on volume of 130,554 contracts. Total open interest declined by a massive 12,669 contracts, which relative to volume is approximately 280% above average meaning that liquidation was off the charts heavy. The July contract accounted for loss of 761 of open interest. As this report is being compiled on July 2, October sugar is trading unchanged on the day and has made a new low for the move at 17.65. Now that the market has generated a short and intermediate term sell signal, we recommend waiting for a rally that could last from 1-3 days before initiating bearish positions.

From the June 29 Weekend Wrap:

“As usual managed money rushed into the sugar market and dramatically increased their net long exposure at the top of the trading range. Since most CTA’s use computer-generated signals, they continually get bamboozled by false breakouts even when markets are range bound. The October chart and the sugar continuation chart reveal that the market has been trading in a wide consolidation pattern since early March. Very importantly, the spread action in sugar is decidedly bearish and has been since the October 2014-March 2015 spread topped out on March 7 when it closed at a 48 point premium to March 2015. Since then, the March premium has widened to October, and on Friday closed at its highest level (1.17 premium to March) going back to July 1, 2013.We see no reason to be involved in the sugar market.”

WTI crude oil:

August WTI crude oil lost 3 cents on volume of 507,443 contracts. Volume increased somewhat from June 30 when August crude oil lost 37 cents on volume of 494,267 contracts and total open interest increased by 8,763 contracts. On July 1, total open interest increased by 6,914, which relative to volume is approximately 45% less than average. The August contract accounted for loss of 7,598 of open interest, which makes the total open interest increased more impressive (bearish). As this report is being compiled on July 2, August WTI is trading 87 cents lower while the Brent contract is trading – $1.01.Even with the decline in stocks per today’s EIA report, the market is trading lower. If August crude closes below OIA’s key pivot point of 104.42, it is highly likely that a short-term sell signal will be generated during the following day(s). Continue to stand aside.

From the June 30 report:

Yesterday, August WTI made a spike low of $104.66 on heavy volume of 14,614 contracts on the 15 minute chart.This was the lowest price since June 12 when the low of 103.59 was made and August WTI closed at 105.78.If the August contract significantly violates yesterday’s low, WTI could take another leg down to the 50 day moving average of 102.24. However, if yesterday’ low holds, August WTI may attempt to test the June 13 high of 107.68. The one favorable data point is that the net long position of manage money has been reduced and the long to short ratio is the lowest since early April 2014. August WTI remains on a short and intermediate term buy signal. However, we recommend a stand aside posture.

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.2 million barrels from the previous week. At 384.9 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.2 million barrels last week, and are in the middle of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories increased by 1.0 million barrels last week but are near the lower limit of the average range for this time of year. Propane/propylene inventories rose 2.6 million barrels last week and are in the upper half of the average range. Total commercial petroleum inventories decreased by 0.4 million barrels last week.

Natural gas:

August natural gas lost 6 ticks on light volume of 136,958 contracts. Total open interest declined by 1,647 contracts, which relative to volume is approximately 45% below average. The August contract lost 4,387 of open interest. As this report is being compiled on July 2, August natural gas is trading 8.9 cents lower and is made a new low for the move at $4.354, which is the lowest print since 4.339 made on May 22. On June 27, August natural gas generated a short and intermediate term sell signal. We are monitoring natural gas for a possible seasonal low during the month of July. Stand aside.

Euro: On July 1, the September euro generated a short-term buy signal, but remains on an intermediate term sell signal.

The September euro lost 15 pips on light volume of 120,933 contracts. Total open interest declined by 3,737 contracts, which relative to volume is approximately 20% above average. As this report is being compiled on July 2, the September euro is trading 25 pips lower and has made a daily low of 1.3643.The pullback is occurring in accordance with OIA protocols when markets tend to pullback for 1-3 days after generating a buy signal. We much prefer the long side of the September Swiss franc, and think it will continue to outperform the euro.

Swiss franc:

The September Swiss franc lost 11 pips on volume of 28,775 contracts. Total open interest declined by 345 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on July 2, the September Swiss franc is trading 21 pips lower and is made a daily low of 1.1244. Wait for another day before contemplating bullish positions. The market is overbought relative to its 20 day moving average of 1.1185, but not according to its 50 day moving average of 1.1238.On June 27, the September Swiss franc generated a short-term buy signal, but remains on an intermediate term sell signal.

British pound:

The September British pound advanced 46 pips on volume of 84,165 contracts. Surprisingly, open interest increased only 48 contracts. As this report is being compiled on July 2, the September pound is trading 3 pips higher and has made a new contract high of 1.7169. Stand aside.

Australian dollar:

The September Australian dollar advanced 70 pips on volume of 92,047 contracts. Total open interest increased by a massive 9172 contracts, which relative to volume is approximately 300% above average meaning that new longs were heavily entering the market at the high-end of the range driving the Australian dollar to a new contract high of 94.54. This is the highest print since 94.37 made by the June contract on June 9, 2014. On April 7, 2014, the June Australian dollar made a high of 94.19, and the previous high was made on November 18, 2013 when the December 2013 Australian dollar made a high of 94.32. As this report is being compiled on July 2, the Australian dollar has reversed course and is now trading 56 pips lower. The Australian dollar remains on a short and intermediate term buy signal. Stand aside.

Copper:

September copper closed unchanged on volume of 41,744 contracts. Total open interest increased by 1639 contracts, which relative to volume is approximately 50% above average. As this report is being compiled on July 2, September copper is trading 3.20 cents higher and has made a new high for the move at $3.2665, which is the highest print since $3.2780 for the March 2014 contract made on March 3, 2014.The move in copper from the early June lows has been nothing short of spectacular, and although copper generated a short and intermediate term buy signal on June 23, we have discouraged bullish positions due to the overbought condition of the market and because we are unable to determine any fundamental driver for higher prices. The Shanghai composite index certainly is no cause for celebration with the 50 day moving average significantly below the 200 day moving average and the current price only slightly above the 50 day moving average, but below the 200 day moving average. In short, the copper market is showing the kind of strength not being seen in the Chinese equity market.Stand aside.

Gold:

August gold advanced $4.60 on light volume of 127,966 contracts. Total open interest increased by 723 contracts, which relative to volume is approximately 70% below average. Yesterday, August gold made a new high for the move at 1334.90, which is the highest print since 1343.30 made on March 21, 2014. As this report is being compiled on July 2, yesterday’s high has not been taken out and gold is trading slightly above yesterday’s close on low volume. August gold remains on a short and intermediate term buy signal. We have no recommendation.

Platinum:

October platinum advanced sharply by $32.10 on volume of 16,459 contracts. Total open interest increased by 2523 contracts, which is off the charts heavy and relative to volume is approximately 450% above average. As this report is being compiled on July 2, October platinum is trading $3.20 lower, but has made a new high for the move at $1523.00. Stand aside, the market is massively overbought.

Silver:

September silver advanced 6.2 cents on volume of 49,607 contracts. Total open interest increased by 805 contracts, which relative to volume is approximately 40% below average. As this report is being compiled on July 2, September silver is trading 17.2 cents higher on the day and it appears that it is going to close near the high of the day. We have been very concerned about silver’s inability to close at the highs, and today is the first day since June 26 that it has been able to do so. Despite this, we think silver is vulnerable to a setback and stops should be in place. As we mentioned yesterday, clients can write out of the money calls against their bullish positions.On June 16, we recommended that clients enter bullish positions and this trade is highly profitable as of today’s close. On June 13, silver generated a short-term buy signal and an intermediate term buy signal was generated on June 20.