Soybeans:

August soybeans lost 48.25 cents while the new crop November contract lost 70.75 on total volume of 337,009 contracts. Volume was the highest since February 27, 2014 when 427,926 contracts were traded and August soybeans closed at $13.13. Additionally, volume was the 2nd heaviest of 2014. On June 30, total open interest increased by 6,002 contracts, which relative to volume is approximately 25% below average. However, the July contract lost 9,097 of open interest and August – 2398, which makes the total open interest increased more impressive (bearish).

The market was taken by surprise by the huge acreage number and total acres in the report came in at 84.8 million, which was 3.3 million acres above the previous USDA estimate. Additionally, stocks on June 1 were 405 million bushels, which was 60 million bushels higher than expected. As this report is being compiled on July 1, August soybeans are trading 14.75 cents lower and have made a daily low of 13.05 while the November contract is trading down 19.50 cents and has made a daily low of 11.32. August and November soybeans will generate an intermediate term sell signal on July 1 after generating a short-term sell signal on June 6.. Stand aside.

Soybean meal:

August soybean meal lost $16.50 on very heavy volume of 138,977 contracts.Volume was the highest since June 12 when soybean meal lost $13.10 on volume of 147,714 contracts and total open interest increased by 3,164 contracts. On June 30, total open interest declined by 4495 contracts, which relative to volume is approximately 25% above average. The July contract lost 3,651 of open interest and August -3,381.  In the latest COT report the long to short ratio of soybean meal was considerably higher (3.26:1) than soybeans 1.90:1,therefore, it is not surprising that liquidation was occurring across the board. As this report is being compiled on July 1, August soybean meal is trading $4.60 lower and has made a new low for the move at 420.20, which takes out yesterday’s low of 424.00.August soybean meal will generate an intermediate term sell signal on July 1 after generating a short-term sell signal on June 11. Stand aside.

Soybean oil:

August soybean oil lost 1.18 cents on volume of 137,092 contracts. Total open interest declined by 2,406 contracts, which relative to volume is approximately 25% below average. The July contract accounted for loss of 2,988 of open interest. On June 23, August soybean oil generated a short-term buy signal, and has been on an intermediate term sell signal.As this report is being compiled on July 1, August soybean oil is trading 24 points lower and has taken out yesterday’s low of 38.90. Stand aside.

From the June 23 report:

“The weakness of soybean meal and the strength in soybean oil was attributed to closing out of the long soybean meal short soybean oil spreads. As is usually the case after the generation of a buy signal, the market has a tendency to pullback from 1-3 days. Usually, this is a buying opportunity, but in the case of soybean oil, we are concerned more about the bearish condition of soybean meal and soybeans and their affect on soybean oil. Therefore, we recommend a stand aside posture.”

Corn:

September corn lost 23.50 cents on volume of 475,189 contracts. volume was the highest since April 9 when 639,980 contracts are traded and September corn closed at $5.06 3/4. On June 30, total open interest increased by 1,321 contracts, which relative to volume is dramatically below average. The July contract accounted for loss of 8,569 of open interest, which makes the total open interest increase more impressive (bearish). September corn made a new contract low, and as this report is being compiled on July 1 has made another contract low at $4.10 1/4. September corn remains on a short and intermediate term sell signal. Stand aside.

The big surprise in yesterday’s report was that corn stocks increased by 130 million bushels, which brings total stocks on hand as of June 1 to 3.854 billion bushels. Acreage came in as expected and was considered neutral number.

Chicago wheat:

September Chicago wheat lost 16.25 cents on volume of 115,256 contracts. Surprisingly, volume was light considering the magnitude of the move and during June, we saw many trading days when volume exceeded 120,000 contracts. On June 30, total open interest increased by 1,059 contracts, which relative to volume is approximately 50% below average. The July contract lost 2,293 of open interest, which makes the total open interest increase more impressive (bearish). Yesterday’s low of 5.67 1/2, is 2  cents above the contract low of 5.65 1/2. As this report is being compiled on July 1, September Chicago wheat is trading 6.00 cents lower but has not taken out yesterday’s low.

The only big surprise in yesterday’s USDA report on wheat was the 700,000 acre increase in spring wheat acres, when the trade was expecting a reduction of 100,000 acres. Stocks came close to the 590 million bushels reported in June. Stand aside, September Chicago wheat remains on a short and intermediate term sell signal.

Kansas City wheat:

September Kansas City wheat lost 21.50 cents on surprisingly light volume of 22,579 contracts.During  June, there were many days when volume exceeded 22,000 contracts.On June 30, total open interest declined only 191 contracts, which relative to volume is approximately 50% below average the July contract lost 1077 of open interest. As this report is being compiled on July 1, September KC wheat is trading 15.75 cents lower and is trading on the lows of the day, which is dramatically below yesterday’s low of 6.99 1/2. Yesterday’s low was the lowest price for September KC wheat since March 4 (6.90 3/4).Kansas City wheat remains on a short and intermediate term sell signal. Stand aside.

Live cattle:

August live cattle lost 1.050 cents on light volume of 44,009 contracts. Volume declined significantly from June 27 when August cattle lost 1.625 on volume of 67,782 contracts and total open interest declined by 2,645 contracts. On June 30, total open interest declined by 606 contracts, which relative to volume is approximately 45% below average. The August contract lost 2231 of open interest. As this report is being compiled on July 1, August cattle is trading 1.50 cents higher on the day. August cattle remain on a short and intermediate term buy signal. Stand aside.

Sugar #11: On July 1, October sugar will generate a short-term sell signal, however it remains on an intermediate term buy signal.

October sugar lost 31 points on light volume of 107,874 contracts. Total open interest declined by 4,344 contracts, which relative to volume is approximately 55% above average meaning that liquidation was heavy on the decline. As this report is being compiled on July 1, October sugar is trading 19 points lower on the day.The most recent COT report shows that managed money is long sugar by ratio of 3.19:1 and therefore there will be plenty of fuel to fund a continued downside move.

WTI crude oil:

August WTI crude oil lost 37 cents on volume of 494,265 contracts. Volume was the highest since June 25 when August WTI advanced 47 cents on volume of 617,233 contracts and total open interest increased by 15,698 contracts. On June 30, total open interest increased by 8,763 contracts, which relative to volume is approximately 25% below average. The August contract lost 5,554 of open interest, which makes the total open interest increase potentially bearish.

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.

Brent crude oil:

August Brent crude oil lost 94 cents on volume of 661,694 contracts. Total open interest increased by 3,416 contracts, which relative to volume is approximately 75% below average. However, the August contract lost 16,765 of open interest, which makes the total open interest increase more impressive (bearish). August Brent remains on a short and intermediate term buy signal. Stand aside.

Natural gas:

August natural gas advanced 5.2 cents on volume of 194,603 contracts. Total open interest declined by 2,995 contracts, which relative to volume is approximately 40% below average. The August contract lost 6,786 of open interest. Yesterday, August natural gas made a low of 4.378, which is slightly above the June 27 low of 4.375, which is the lowest print since 4.353 made on May 27. The 200 day moving average for the August contract is 4.304, and the price level represented by the 200 day moving average has provided support going back to late January 2014.On June 27, August natural gas generated a short and intermediate term sell signal. Typically, natural gas tends to make its seasonal low in July. Stand aside.

Copper:

September copper advanced 3.55 cents on volume of 49,842 contracts. Total open interest increased by a massive 3,485 contracts, which relative to volume is approximately 185% above average meaning that new longs were aggressively entering the copper market and driving prices to a new high for the move (3.2105).The July contract accounted for loss of 845 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled on July 1, September copper is trading only fractionally higher on the day. Copper is trading above its 200 day moving average of $3.1886, and is approaching the March 5 high of 3.2220. On June 23, September copper generated a short and intermediate term buy signal. We recommend a stand aside posture.

Gold:

August gold gained $2.00 on volume of 134,469 contracts. Total open interest increased by 1,677 contracts, which relative to volume is approximately 45% below average. As this report is being compiled on July 1, August gold is trading $3.80 higher and has made a new high for the move at 1334.90, which is the highest print since March 21, 2014 (1343.30). Although the market continues to advance, it look somewhat tired. Gold is considerably overbought relative to its 20 day moving average of 1288.70, 50 day 1287.20 and 200 day moving average of 1289.30.

Platinum:

October platinum advanced $2.60 on light volume of 8,480 contracts. However, total open interest increased by a massive 947 contracts, which relative to volume is approximately 360% above average meaning that aggressive new longs were entering the market in heavy numbers and driving prices higher (1492.10). The July contract lost 378 of open interest, which makes the total open interest increase more impressive (bullish). As this report is being compiled on July 1, October platinum has broken out to new high territory on heavy volume and has made a daily high of 1516.70, which is the highest print since 1540.90 made the week of September 2, 2013.October platinum remains on a short and intermediate term buy signal. Stand aside.

Silver:

September silver lost 7.8 cents on volume of 53,446 contracts. Total open interest increased by 537 contracts, which relative to volume is approximately 55% below average. The July contract accounted for loss of 2,671 of open interest, which makes the total open interest increase neutral.As this report is being compiled on July 1, September silver is trading 3.5 cents higher on the day. However, like gold, silver looks tired at current levels and we think it is vulnerable to a correction.

Ever since June 13 when September silver generated a short-term buy signal and September 20 when it generated an intermediate term buy signal, the market has not had much of a correction.Although silver has been consolidating for the past several days, which is a form of corrective action, silver needs new buyers willing to enter the market at current levels to drive prices higher.

With the equity market making new all time highs, silver may lose some of its attractiveness. In yesterday’s report, we mentioned for those who have not entered bullish positions to do so, and clients who entered bullish positions on June 16 to add to their positions. We may have been premature with this call .Although, all precious metals are on short and intermediate term buy signals, it cannot be discounted that a healthy correction could occur at any time. We strongly urge clients to have actual or mental stops in place in the event of a decline.Additionally, it should not be discounted that silver may be making a temporary top. In short, do not get attached to a bullish outlook on silver in the immediate-term.

For those who added to or initiated new bullish positions per yesterday’s report, we recommend these be pared back to a  comfortable level. One defensive move is to write out of the money calls against bullish positions.

Euro:

The September euro gained 49 pips on low volume of 146,207 contracts. Total open interest increased by 3,943 contracts, which relative to volume is average. As this report is being compiled on July 1, the September euro is trading 11 pips lower and has made a low of 1.3679, which is above OIA’s key pivot point of 1.3674.If the euro stays above today’s pivot point, a short-term buy signal will be generated.From June 19 through June 30, total open interest has increased by 11,385 contracts, while the September euro has advanced 135 pips. Although managed money has reduced their net short exposure, they remain short by a ratio of 2.12:1 as of June 24. The increases of open interest during the rally indicate shorts are digging in and refusing to liquidate.

British pound:

The September British pound advanced 84 pips on volume of 96,434 contracts. Total open interest increased by 1078 contracts, which relative to volume is approximately 50% below average. yesterday, the September pound made a new contract high at 1.7105, and this has been taken out on July 1 with another contract high at 1.7156. This is the highest print since October 15, 2008 when the pound made a high of 1.7500. The pound remains on a short and intermediate term buy signal. We have no recommendation.

Swiss franc:

The September Swiss franc advanced 58 pips on volume of 39,070 contracts. Total open interest increased by a robust 1580 contracts, which relative to volume is approximately 55% above average. The September franc made a high of 1.1292 on June 30 and this has been taken out by another new high of 1.1298. On June 27, the September Swiss franc generated a short-term buy signal, but remains on an intermediate term sell signal. Wait for a pullback before initiating new bullish positions. We much prefer being long the Swiss franc to the euro.