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Soybeans:

August soybeans advanced 17.00 cents while the November contract gained 18.75 on total volume of 188,127 contracts. Total open interest increased by 1,750 contracts, which relative to volume is approximately 50% below average. The August contract lost 4,074 of open interest. Considering the massive build of open interest during the past couple weeks, the rally did not shake loose many shorts, and the open interest increase on the price advance is a positive development.As this report is being compiled on July 24, August soybeans have made a high of 12.32 3/4 while the November high is 11.07 1/4. Soybeans are massively oversold and well overdue for a rally, but as we’ve said before there needs to be a major weather event in order to change market psychology.Until then, the primary trend is lower with intermittent rallies. Soybeans remain on a short and intermediate term sell signal. Stand aside.

The USDA reported sales of 226.68 thousand metric tons bringing total commitments to date of 1.684.2 billion bushels versus USDA projections for the current season of 1.620 billion bushels.

Corn:

September corn advanced 2.25 cents on total volume of 188,435 contracts. Total open interest increased by an astounding 18,260 contracts, which relative to volume is approximately 300% above average. The September 2014 through July 2016 contracts all gained open interest. The total open interest increase on July 23 is the largest going back to June 2 when corn was trading in the $4.60 area. The massive increase of open interest may be a sign that corn prices are nearing a temporary bottom, however as this report is being compiled on July 24, September corn is trading 2.00 cents lower and has made a new contract low of 3.56 1/2. Corn remains on a short and intermediate term sell signal stand aside.

The USDA reported sales of 291.5 thousand metric tons bringing total commitments to date of 1.907.1 billion bushels versus USDA projections for the season of 1.900 billion bushels.

Chicago wheat:

September Chicago wheat advanced 6.25 cents on volume of 58,569 contracts. Total open interest increased by 4,878 contracts, which relative to volume is approximately 230% above average meaning that longs and shorts were aggressively entering the market, and longs were moving the market higher. The September 2014 through September 2015 contracts all gained open interest. As this report is being compiled on July 24, September wheat is trading 1.25 cents higher and has not taken out yesterday’s contract low of 5.20 1/4. September Chicago wheat remains on a short and intermediate term sell signal. Stand aside.

USDA reported sales of wheat in all categories of 443.2 thousand metric tons bringing total commitments to date of 328.1 million bushels versus the USDA projection for the season that ends on May 31 2015 of 900 million bushels.

Live cattle:

August live cattle gained 10 points on heavy volume of set 82,227 contracts. Volume increased from July 22 when August cattle traded up the 3.00 cent limit and total open interest increased by 1,931 contracts. Additionally, volume was the highest since July 11 when August cattle advanced 97.5 points on volume of 93,526 contracts and total open interest increased by 1,186 contracts.On July 23, total open interest declined by 269 contracts, which is minuscule and dramatically below average. The August contract accounted for loss of 5,669 of open interest. On July 23, August cattle made a new all-time high at 1.57575, and as this report is being compiled on July 24, the August contract has made another all-time high at 1.58650 and is trading close to unchanged on the day. If not long from lower levels, we recommend a stand aside posture.

WTI crude oil:

September WTI crude oil advanced 73 cents on fairly heavy volume of 622,439 contracts. Volume increased from July 22 when September WTI lost 47 cents on volume of 530,023 contracts and total open interest declined by 22,649 contracts. However, volume was below that of July 21 when September WTI advanced 91 cents on volume of 695,021 contracts and total open interest declined by 14,532 contracts. On July 23, total open interest declined again, this time by 15,606 contracts, which relative to volume is average.The August contract lost 2,519 of open interest and September -10,756

Incredibly, open interest has declined every day beginning on July 14 and through July 23 and totals a massive 99,447 contract decline while September WTI crude oil advanced $2.82. 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 24, September WTI is trading 92 cents lower after making a daily high of 103.31, which is below the high of 103.45 made on July 22. In the report of July 21, we recommended shorting out of the money calls and using the July 22 high of 103.45, or above to exit the position. As we said in the July 21 report, we would have recommended a more aggressive bearish position, but the premium of the September 2014 contract over the December 2014 contract continues to widen. On July 23, the spread closed at $3.17, which takes out the June 23 high of 3.00 when September WTI closed at 105.42. Stay with the short call position.

Natural gas:

September natural gas lost 9 ticks on volume of 187,982 contracts. Total open interest declined by 4,690 contracts, which relative to volume is average. The August contract lost 8,935 of open interest. From July 17 through July 23, open interest has declined every day and the total for this period is 24,606 contracts while natural gas has fallen 33.3 cents. The most notable feature about the decline of natural gas has been the lack of an open interest build, which is unusual considering that natural gas prices are trading at levels last seen in November 2013. We would not be surprised to see that managed money has moved to a net short position in the next COT report. However, this likely will be due to liquidation of long positions, not by any significant addition to short positions.We think there will be at terrific opportunity on the long side of natural gas, but the market has much work to do before this is on the horizon.On June 27, August and September natural gas generated a short and intermediate term sell signal and we have been recommending a stand aside posture.

The Energy Information Administration announced that working gas in storage was 2,219 Bcf as of Friday, July 18, 2014, according to EIA estimates. This represents a net increase of 90 Bcf from the previous week. Stocks were 561 Bcf less than last year at this time and 683 Bcf below the 5-year average of 2,902 Bcf. In the East Region, stocks were 319 Bcf below the 5-year average following net injections of 56 Bcf. Stocks in the Producing Region were 284 Bcf below the 5-year average of 1,034 Bcf after a net injection of 23 Bcf. Stocks in the West Region were 80 Bcf below the 5-year average after a net addition of 11 Bcf. At 2,219 Bcf, total working gas is below the 5-year historical range.

Copper:

September copper lost 10 points on light volume of 37,207 contracts. Total open interest declined by a hefty 2,225 contracts, which relative to volume is approximately 140% above average. As this report is being compiled, September copper is trading 5.90 cenrs higher and has made a high of 3.2685, which is the highest print since 3.2945 made on July 14.We thought the spike high of 3.2360 made on July 22 would be a tradable high on the bearish side, but copper has broken decisively above it, which is positive and the next hurdle is that September copper must make a daily low above OIA’s key pivot point for July 24 of 3.2380 if it is to continue the rally.Despite our thinking that copper was headed for a sell signal, we have recommended a stand aside posture until the sell signal was confirmed. September copper remains on a short and intermediate term buy signal. Stand aside.

From the July 22 report:

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.

Gold: August and October gold will generate a short-term sell signal on July 24. They remain on an intermediate term buy signal.

August gold lost $1.60 on light volume of 108,000 431 contracts. Open interest declined by a massive 5,290 contracts, which relative to volume is approximately 95% above average meaning that liquidation was extremely heavy on the rather modest decline. August gold made a low of 1303.50 on July 23, and as this report is being compiled on July 24, August gold is trading 14.40 lower has made another low of 1287.50, which is the lowest print since 1276.20 made on June 19. Now that August and October gold have generated a short-term sell signal because they made a daily high below OIA’s key pivot point of $1308.7o, our protocols indicate a likelihood of a 1-3 day counter trend rally, and this is the opportunity to initiate bearish positions. Occasionally, in a very bearish situation, markets will continue lower, and the counter trend rally occurs from a lower level.

From the July 22 report: 

“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.”

From the July 20 Weekend Wrap:

“From June 20 (which was the day after the major move in gold + 41.40) through July 17, total open interest increased 21,879 contracts, however, August gold advanced only 30 cents in this time frame. This is bearish open interest action relative to the unchanged price from June 20 through July 17.In other words, the substantial increase of open interest was not moving prices higher. We think this spells potential trouble for gold and is vulnerable to further downside because speculators who acquired gold at higher prices will be forced to liquidate as prices move lower.In order for August gold to continue its advance, the daily low must be above OIA’s key pivot point of 1327.00. August gold remains on a short and intermediate term buy signal. Stand aside.”

Silver:

September silver lost 5.3 cents on volume of 26,714 contracts. Total open interest declined by 162 contracts, which is approximately 70% below average. As this report is being compiled on July 24, September silver is trading 60.5 cents lower and is trading at the lowest level since 19.875 made on June 19.In the June 16 report, we recommended the initiation of bullish positions and exited these positions per the report of July 15 for a very profitable trade. Since then, we have recommended a sideline stance because we were concerned about the trading pattern of silver. Stand aside.

From the July 22 report:

“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.”

10 year Treasury Note:  On July 23, the September 10 year Treasury Note generated a short-term buy signal and remains on an intermediate term buy signal.

The September 10 year treasury note gained + 0.005 points on light volume of 612,858 contracts. Total open interest increased by 4,310 contracts, which relative to volume is approximately 65% below average. As this report is being compiled on July 24, the September note is trading 14 points lower.As we pointed out in the July 20 report, 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.July 24 was the first day of the pullback.For the short-term buy signal to reverse, the September note must make a daily high below OIA’s key pivot point of 124-260.

From the July 20 Weekend Wrap:

“10 year Treasury Note: It appears the September 10 year Treasury Note is on the verge of generating a short-term buy signal.”

“On June 10, the September 10 year treasury note generated a short-term sell signal, but never generated an intermediate term sell signal. Since then, the market has been trading in a sideways pattern and only recently began to show new signs of life. The September contract made a low at 123-26 on July 3, which is an area of support going back to mid May. Beginning on July 7, the market began to rally, and on July 18 registered its highest print since May 29 (126-000).Total open interest during this period was positive having gained 61,604 contracts from July 7 through July 17. For the September note to generate a short-term buy signal, the daily low must be above OIA’s key pivot point of 125-09.Once this occurs, a pullback is likely lasting from 1-3 days. This will be the opportunity to initiate bullish positions.”

Coffee: On July 24, September coffee will generate a short-term buy signal, but remains on an intermediate term sell signal.

September coffee gained 8.30 cents on volume of 20,896 contracts. Total open interest increased by a hefty 1,321 contracts, which relative to volume is approximately 140% above average meaning that aggressive new longs were entering the market and pushing prices higher. September coffee made a high of 1.7860, which is the highest print since 1.8490 made on June 27.Interestingly, yesterday was exactly 3 months from the date that September coffee made its contract high of 2.2060. After the generation of a buy signal, the market has a tendency to pullback from 1-3 days and this will be the opportunity to establish bullish positions. We already know that the long to short ratio is at multi-month lows which means there is plenty of firepower on the sidelines ready to join the party.We recommend using options because coffee is highly volatile.