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Soybeans:

August soybeans advanced 8.25 cents while the November contract lost 13.75 on total volume of 154,627 contracts. Total open interest increased by 4,705 contracts, which relative to volume is approximately 20% above average. The August contract lost 700 of open interest and the September 2014 through March 2016 contracts all gained open interest. The November contract made a new contract low of $10.57 and on July 23 made another contract low, 10.55.As this report is being compiled on July 23, August soybeans are trading 11.00 cents higher while the November contract +8.50. The market is experiencing rally, and this is to be expected from time to time. However, the trend continues to be down, and unless there is a major change in weather that would potentially threaten the soybean crop, the market will trade sideways to lower. Soybeans remain on a short and intermediate term sell signal. Stand aside.

Corn:

September corn lost 3.75 cents on total volume of 156,485 contracts.Volume was the lowest since July 3 when 118,059 contracts were traded in light pre-holiday volume and September, corn closed at 4.09 1/2.On July 22, total open interest increased by a hefty 6,785 contracts, which relative to volume is approximately 65% above average meaning that aggressive new short sellers were entering the market and driving prices to a new contract low (3.60).The September contract lost 614 of open interest and there were open interest increases in the July 2014 through July 2016 contracts. It should be noted that volume dried up as the market moved into new low territory. As this report is being compiled on July 23, September corn is trading 1.50 lower and is made a new contract low at 3.57 1/2. Stand aside.

From the July 13 Weekend Wrap:

“In summary, there is a large body of evidence that shows manage money is redefining the phrase “digging in” by refusing to liquidate despite sharply lower prices. Making this even more remarkable is the fact that September corn closed on Friday at levels last seen in August 2010. The contract low is in fact a multi-year low which makes the position of manage money all the more remarkable and untenable. Our view is that corn is far from a bottom and that a considerable amount of financial pain is in store for anyone long this market.”

Chicago wheat:

June September Chicago wheat lost 5.50 cents on total volume of 68,059 contracts. Total open interest increased by a massive 5,133 contracts, which relative to volume is approximately 200% above average meaning aggressive new short sellers were entering the market and driving prices lower.The September 2014 through December 2015 contracts all gained open interest. As this report is being compiled on July 23, September Chicago wheat is trading 0.25 cents higher and has made a new contract low of $5.20 1/4.This is the lowest price for Chicago wheat on the continuation chart since July 2010, and the chart does not show any support until the $4.30 area. Chicago wheat remains on a short and intermediate term sell signal. Stand aside.

Live cattle:

August live cattle advanced the 3.00 cent daily limit on heavy volume of 74,007 contracts. Volume was the strongest since July 14 when August cattle lost 1.325 on volume of 76,274 contracts and total open interest declined by 597 contracts.On July 22, total open interest increased by 1,931 contracts, which relative to volume is average. The August contract lost 3,875 of open interest and there were open interest increases in the October 2014 through December 2015 contracts. The performance from a volume and open interest point of view is the best that we’ve seen during the recent rally, and it bodes well for higher prices. Unfortunately, the positive action comes at the nosebleed level, which makes it dangerous to enter new bullish positions. As this report is being compiled on July 23, August live cattle is trading 60 points lower after making a new all-time high of 1.57575, which takes out the previous all-time high of 1.56475 made on July 7. It appears that the path of least resistance is higher, but we advise against initiating new bullish positions at current prices.

WTI crude oil:

September WTI crude oil lost 47 cents on volume of 530,023 contracts. Volume was the lowest since July 7 when September WTI lost 40 cents on total volume of 411,475 contracts while total open interest increased by 1,605 contracts. On July 22, total open interest declined by a massive 22,649 contracts, which relative to volume is approximately 65% above average meaning that liquidation was extremely heavy on the rather modest decline.The August contract accounted for loss of 29,508 of open interest. Remarkably, open interest has declined every day beginning on July 14 and through July 22 totals a massive 83,841 contract decline while September WTI crude oil advanced $2.09. This is very bearish open interest action relative to the price advance. Market participants have been taking advantage of the rally to liquidate positions. As this report is being compiled on July 23, September WTI is trading 42 cents higher and has made a daily high of 103.34, which is below yesterday’s high of 103.45.

The interesting part of trading on July 23 is that the Energy Information Administration announced a decline of 4.0 million barrels yet prices are only fractionally higher on the day. This is the 4th week in a row that inventories have declined. Last week there was a decline of 7.5 million barrels. The previous week there was a decline of 2.4 million barrels. Four weeks ago, inventory declined by of 3.2  million barrels..This should be bullish, but it is not having a major impact on the market. However, the September 2014-December 2014 spread continues to widen, which is bullish.Additionally, geopolitical concerns regarding Ukraine continue to make headlines, which should give the market a bullish psychological tilt. September WTI continues to trade between OIA’s key pivot points of 102.38 and 103.74. A daily low above 103.74 would mean that September crude oil is resuming its uptrend.In yesterday’s report, we recommended the initiation of short call positions at a strike price and month of your choosing. Additionally, we advised to exit the position if September WTI breaks above 103.45, which is yesterday’s high

The Energy Information Administration announced that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.0 million barrels from the previous week. At 371.1 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 3.4 million barrels last week, and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories increased by 1.6 million barrels last week but are near the lower limit of the average range for this time of year. Propane/propylene inventories rose 2.2 million barrels last week and are near the upper limit of the average range. Total commercial petroleum inventories increased by 5.2 million barrels last week.

Natural gas:

August natural gas lost 7.7 cents on volume of 260,811 contracts. Volume declined from the 295,599 contracts traded on July 21 when August natural gas lost 10.2 cents and total open interest declined by 8,844 contracts. On July 22, total open interest declined by 4,348 contracts, which relative to volume is approximately 30% below average. The August contract lost 8,043 of open interest.August natural gas made a low of 3.756, which is the lowest print since the week of November 25, 2013 when the low for that week was 3.753. As this report is being compiled on July 23, natural gas is trading 1.5 cents higher and has not taken out yesterday’s low. Natural gas remains on a short and intermediate term sell signal. Stand aside.

Copper:

September copper gained 90 points on volume of 48,903 contracts. Total open interest increased by 2,301 contracts, which relative to volume is approximately 75% above average meaning that new longs and shorts were aggressively entering the market, but prices moved only fractionally higher.  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. It appears that copper prices are headed lower, but if the market is to resume its uptrend it must make a daily low above OIA’s key pivot point of 3.2366. If it is unable to trade above the pivot point, copper prices will trade sideways to lower. With the huge net long position of manage money, which is the highest in over 2 years, copper remains vulnerable to speculative liquidation. September copper remains on a short and intermediate term buy signal. Stand aside.

From the July 20 Weekend Wrap:

“As mentioned earlier, the net long position of manage money currently stands at 48,903 contracts, which is dramatically above the net long 14,448 contracts of the January 29, 2013 report and the net long position of 17,164 contracts of the September 18, 2012 report.”

“The lopsided position of manage money is important because it will add fuel for the downside move which we think is imminent.”

Gold:

August gold lost $7.60 on volume of 144,515 contracts. Total open interest increased by 547 contracts, which relative to volume is approximately 80% below average. Ever since gold had its major rally on June 19 when it closed at 1314.10, the market has traded sideways to lower interspersed with occasional rallies. From July 10 through July 22, total open interest has declined by 11,182 contracts while August gold has declined$32.90. This is positive open interest action relative to the price decline. August gold made its high on July 10 at 1346.80, then on July 14 had a massive slide of $30.70 and has not recovered since.Gold will close lower on July 23 and this is the 3rd day out of the past 4 when it closed lower. August gold is close to generating a short-term sell signal, and will do so if the high for the day is below OIA’s key pivot point of $1308.70. We continue to advise a sideline stance.

Silver:

September silver lost 4 ticks on volume of 38,475 contracts. Total open interest declined by 526 contracts, which relative to volume is approximately 40% below average. As this report is being compiled on July 23, September silver is trading fractionally lower on the day.For September silver to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point of 20.835, and for the rally to resume, September must make a daily low above OIA’s key pivot point of $21.220. Stand aside.