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Soybeans:

August soybeans lost 1.00 cent while the November contract declined by 13.75 cents on total volume of 154,772 contracts. Total open interest increased by 906 contracts, which relative to volume is approximately 65% below average. The August contract lost 2,886 of open interest and there were open interest increases in the September 2014 through January 2016 contracts. The open interest increase on July 21 is the smallest going back to July 9. Open interest has increased every day since July 9 through July 21. This may indicate that market participants are becoming reluctant to get overly aggressive on the short side at current levels. As this report is being compiled on July 22, August soybeans are trading 9.75 cents higher while the November contract is trading 12.75 cents lower on the day and has broken through the low of $10.65 for the November contract made on July 11 after the release of the USDA report. Yesterday’s low was 10.65 1/2 and the low on July 22 is 10.66 1/2.November beans are overdue for a rally, however, it is difficult to envision a rally that would be anything more than a rally in a bear market.Do not attempt to pick a bottom in soybeans. Soybeans remain on a short and intermediate term sell signal. Stand aside.

Corn:

September corn lost 7.25 cents on volume of 225,255 contracts. Volume increased from July 18 when September corn lost 8.25 cents on volume of 184,591 contracts and total open interest increased by 9,667 contracts. On July 21, total open interest increased again, this time by 7,283 contracts, which relative to volume is approximately 25% above average meaning that aggressive new short sellers were entering the market and driving prices to a new contract low (3.63). The September contract lost 2,001 of open interest and the December 2014 through December 2017 contracts all gained open interest with the exception of the September 2016 contract, which was unchanged. As this report is being compiled on July 22, September corn has made another new contract low at 3.60 and is trading 3.75 cents lower on the day. The market is clearly indicating that a massive crop is on the way. Corn remains on a short and intermediate term sell signal. Do not attempt to pick a bottom in corn.

Chicago Wheat:

September Chicago wheat lost 2.25 cents on volume of 63,713 contracts. Total open interest increased by 1,112 contracts, which relative to volume is approximately 25% below average. The September contract lost 1242 of open interest and December – 271. As this report is being compiled on July 22, September corn is trading 3.00 cents lower and is made a daily low of 5.24, which is above yesterday’s new contract low of 5.23 3/4.The September Kansas City contract has made another new low at 6.21, but has not yet made a new contract low. Do not attempt to pick a bottom in wheat.

Live cattle:

August live cattle advanced 1.325 cents on total volume of 48,347 contracts. Volume was the lightest since June 30 when 43,425 contracts were traded and August cattle closed at 1.50075.On July 21, total open interest increased only 549 contracts, which relative to volume is approximately 45% below average. The August contract lost 3,257 of open interest. As this report is being compiled on July 22, August cattle is trading limit up (+3.00 cents). The daily high on July 22 is 1.55950, which is shy of the July 7 all-time high of 1.56475.We have been reluctant to recommend bullish positions because of substandard open interest action and unimpressive volume accompanying price advances. At this juncture, the question is whether or not cattle will decisively break through the all-time high. Today, after the close, the USDA releases its cold storage report, which should provide support for a move higher. We recommend a stand aside posture. 

WTI crude oil: OIA recommends shorting out of the money calls and employ the month and strike price that works best for you.We recommend using today’s high of 103.45 as an exit point for short calls.

September WTI crude oil advanced 91 cents on heavy volume of 695,021 contracts. Volume exceeded that of July 18 when September WTI crude oil lost 25 cents on volume of 660,072 contracts and total open interest declined by 4,268 contracts. Additionally, volume was the highest since July 17 when September WTI crude oil advanced $1.60 on total volume of 1,135,765 contracts and total open interest declined by 24,414 contracts. On July 21, total open interest declined by a hefty 14,532 contracts , which relative to volume is approximately 20% below average, but a substantial number considering the size of the advance.This is bearish, especially when combined with open interest declines of the past couple of days. The August contract accounted for loss of 42,377 of open interest and there were insufficient open interest increases in the forward months to turn the negative total number positive.

As this report is being compiled on July 22, September WTI crude oil is trading 33 cents lower after making a high in the evening session on July 21 of 103.45, which is the highest print since $103.63 made on July 8. In yesterday’s trading, the September 2014-December 2014 spread widened to $2.95 premium to September, which is the high close for the spread since June 23 when it closed at $3.00 premium to September. On June 23, the September contract closed at 105.42 and yesterday the September contract closed at 102.86. In short, the spread is acting more positively than the price for the September contract.

Despite the rally, the short-term sell signal has not reversed and for this to occur September WTI must make daily lows above OIA’s 2 key pivot points: $102.37 and 103.76.We think the market is headed lower, and the intermediate term sell signal generated in September crude on July 18 will likely be reversed.The only reason we are not recommending more aggressive bearish positions is that the bull spread in September-December 2014 is acting positively, and this tempers our bearish views, at least until the spread begins to negatively.  

Brent crude oil:

September Brent crude oil advanced 44 cents on volume of 607,379 contracts. Total open interest declined by a massive 23,706 contracts, which relative to volume is approximately 55% above average. The September contract lost 18,337 of open interest, and it is weeks away from its expiration date. In short, there was significant liquidation in the Brent contract despite the rather modest advance. This reinforces our view about the bearish set up for petroleum and products. Brent crude generated a short-term sell signal on July 3 and an intermediate term sell signal on July 11. Stand aside.

Copper:

September copper advanced 1.45 cents on volume of 44,652 contracts. Total open interest increased by 645 contracts, which relative to volume is approximately 40% below average.As this report is being compiled on July 22, September copper has closed at $3.2080, up 90 points from yesterday. The market made a spike high at $3.2360 on heavy volume of 4,486 contracts on the 15 minute chart during 6:45-7:00 a.m. CDT.We think this is a tradable high on the bearish side. September copper remains on a short and intermediate term buy signal. Stand aside.

Gold:

August gold advanced $4.50 on light volume of 105,546 contracts. Total open interest increased by 738 contracts, which relative to volume is approximately 65% below average. During the past 4 trading sessions including July 22, the daily highs have been successively lower and the daily lows have been irregularly lower.As this report is being compiled on July 22, August gold is trading $7.40 lower.We think speculators are becoming disillusioned with gold, and believe the path of least resistance is lower for now. Stand aside.

Silver:

September silver gained 12.6 cents on volume of 23,684 contracts. Total open interest declined by 281 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on July 22, September silver is trading 2.2 cents lower on the day. We are favorably inclined toward silver, but if gold and platinum head south, silver will likely follow. At this juncture, we see no compelling reason to be long silver.