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Due to the July 4 holiday shortened session, the report for June 30 will truncated.

WTI crude oil: On July 3, August and September WTI crude oil will generate short term buy signals, but remain on intermediate term sell signals.

On June 30, the August contract gained $1.11 on volume of 1,097,340 contracts. Total open interest increased by 14,172 contracts, which relative to volume is approximately 45% below average. However, it should be noted that the open interest increase on June 30 is the fourth in a row on a price advance.  This combined with the short term buy signal on July 3 may indicate there is more rally ahead. However, we would expect a pullback from here, therefore we do not recommend bullish positions at this juncture.

On July 3, the dollar is sharply higher and a strong dollar is generally negative for crude oil. The COT report revealed that managed money added 8,278 to their long positions and also added 13,044 to their short positions. Commercial interests added 12,071 to their long positions and also added 8,075 to their short positions. As of the June 27 tabulation date, managed money was long WTI crude oil by a ratio of 1.52:1, down from the previous week of 1.59:1 and the ratio two weeks ago of 2.14:1. Three weeks ago, managed money was long WTI by a ratio of 2.89:1. Essentially, the current rally appears to be of a bear market nature and the moving average setup on the daily continuation chart is bearish.

Heating Oil: July 3, August and September 2017 New York heating oil will generate short term buy signals, but remain on intermediate term sell signals.

Gasoline: On July 3, August and September 2017 New York gasoline will generate a short term buy signals, but remain on intermediate term sell signals.

Natural Gas:

It appears that natural gas is headed toward a reversal of the short term buy signal generated on June 28. We recommended bullish positions after the buy signal and these should be liquidated. As we pointed out in previous notes, July tends to be the bottom for the natural gas market before it begins its ascent through late summer and early fall.

10 Year Treasury Note: On July 3, the the September 10 year treasury note will generate an intermediate term sell signal after generating a short term sell signal on June 28.

On June 30, the September note lost 9 points on volume of 1,887,881 contracts. Total open interest declined by a very substantial 63,329 contracts, which relative to volume is approximately 25% above average. The COT report released last Friday revealed that leverage funds liquidated 32,568 of their long positions and also liquidated massive 107,658 of their short positions. As of the June 27 tabulation date leverage funds were short the 10 year note by ratio of 1.06:1, down from the previous week of 1.18:1 and the ratio two weeks ago of 1.13:1. In summary, the leverage fund net short position was reduced to the lowest level in months just as prices began to turn lower again.

Soybeans: On July 3, August and November 2017 soybeans will generate short term buy signals, but remain on intermediate term sell signals.

The COT report released last Friday revealed that managed money liquidated 1,758 of their long positions and added a substantial 27,721 to their short positions. Commercial interests liquidated 1,672 of their long positions and also liquidated 20,229 of their short positions. As of the June 27 tabulation date managed money was massively short soybeans by a ratio of 2.80:1, up substantially from the previous week of 2.34:1 and the ratio two weeks ago of 2.20:1.

On June 30, soybeans advanced 26.25 cents on heavy volume of 377,215 contracts and total open interest declined by 5,069, which relative to volume is approximately 45% below average. The July contract accounted for a loss of 3,680 of open interest. As this report is being compiled on July 3 the August contract is rocketing higher again, up 22.75 and has made a new high for the move of 9.80 3/4. At this juncture this appears to be a story of short-sellers caught on the wrong side of the market, but the growing season is ahead and anything can happen. Do not short this market. At this juncture we recommend a stand aside posture.

Chicago wheat:

September Chicago wheat advanced 30.00 cents heavy volume of 290,284 contracts. Volume exceeded that of June 29 when the September contract gained 23.00 on volume of 277,153 contracts and total open interest declined by 1,263. On June 30, total open interest increased by a substantial 6,258 contracts, which relative to volume is approximately 10% below average, but a total open interest increase during Friday’s trading indicates that new buyers were pushing prices higher, not short-sellers. As this report is being compiled on July 3, the September contract is trading sharply higher again, up 29.00 cents on heavy volume.

The COT report revealed that managed money liquidated 12,674 of their long positions and also liquidated 14,026 of their short positions. Commercial interests liquidated 9,260 of their long positions and added 3,660 to their short positions. As of the June 27 tabulation date, managed money was short Chicago wheat by a ratio of 1.10:1, which is the exact same ratio as the previous week, but down substantially from the ratio two weeks ago of 1.92:1.

Three weeks ago, managed money was short by ratio of 2.24:1. The catalyst for the move higher has been hot dry weather in the spring wheat growing areas. However, wheat has a habit of making extended moves higher and taking short-sellers to the cleaners. Stand aside.