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Coffee: On June 6, July and September New York coffee generated short and intermediate term buy signals. We recommend a stand aside posture.

Cocoa: July and September New York cocoa will generate short and intermediate term buy signals on June 7. We have no recommendation.

Corn:

July corn advanced 9.00 cents on heavy volume of 471,850 contracts. Volume increased substantially from June 3 when the July contract gained 3.00 cents volume of 386,254 contracts and total open interest increased by 8,844. On June 6, total open interest exploded higher, up 23,232 contracts, which relative to volume is approximately 100% above average meaning aggressive new buyers were entering the market in very large numbers and driving prices to a new high for the move of 4.27 1/2. The July contract accounted for a loss of 9,329 of open interest, which means there were more than enough open interest increases in the forward months to offset the decline in July and increase total open interest substantially. Yesterday’s performance was outstanding.

As this report is being compiled on June 7, the July contract is trading 2.25 lower after making a fractional new high of 4.28. We have no recommendation. July corn remains on short and intermediate term buy signals.

Soybeans:

July soybeans advanced 6.25 cents on volume of one 289,711 contracts. Total open interest declined by 2,630 contracts, which relative to volume is approximately 50% below average. The July contract accounted for a loss of 19,562 of open interest, which means there were insufficient open interest increases in the forward months to offset the decline in July.

As this report is being compiled on June 7, the July contract is trading 7.75 cents lower on the day and trading on the low of 11.29, which takes out yesterday’s print of 11.36. As we pointed out in previous reports, soybeans tend to top out in either June or July, and though the market has pulled back from the June 3 high of 11.69, we think there is a high likelihood of a final blow-off before the market turns lower. Do not attempt to pick a top in this market and do not enter new long positions. For those who are long at lower levels, sell stop protection should be in place.

WTI crude oil:

July WTI crude oil advanced $1.07 on modest volume of 736,460 contracts. However, total open interest increased substantially, up by 23,261 contracts, which relative to volume is approximately 10% above average. The July contract accounted for a gain of 376 of open interest.

As this report is being compiled on June 7, the July contract is trading 37 cents above yesterday’s close and has made a new high for the move of $50.37. Many analysts and financial pundits have been calling for a return to $20.00 oil, but we are not in this crowd. Despite the extended move seen during the past couple of months, we think a return to the extreme lows made earlier this year are remote. For the July contract to generate a short-term sell signal, the high of the day must be below OIA’s key pivot point for June 7 of $47.21. We have no recommendation.

Natural gas:

July natural gas advanced 6.8 cents on volume of 327,889 contracts. Total open interest increased by 7,813 contracts, which relative to volume is approximately 10% below average, however the July contract accounted for a loss of 8,445 of open interest, which means there were sufficient open interest increases in the forward months to offset the decline in July and increase total open interest.

Yesterday’s performance was outstanding, especially because managed money remains short natural gas by a ratio of 1.44:1. The total open interest increase in yesterday’s trading confirms that speculators are not covering short positions to any great degree. This makes natural gas vulnerable to further advances.

On June 1, OIA announced that July and August natural gas generated short-term buy signals and they have been on intermediate term buy signals. However, the market has not had a pullback which would allow clients to initiate bullish positions. We recommend waiting for a pullback before considering bullish positions however, our concern at this date is that natural gas tends to top in mid June.

Copper: On June 6, July and September copper generated short-term buy signals, but remain on intermediate term sell signals. We have no recommendation.

Gold: We think that long positions in gold may be an intelligent relatively low-risk way of trading on  the Brexit vote as it approaches on June 23. Although we are not recommending positions now, if we begin to see indications that gold is firming, it may be an excellent vehicle to trade the anxiety about the June 23 vote.

August gold advanced $4.50 on light volume of 173,489 contracts. Total open interest declined by 3,611 contracts, which relative to volume is approximately 20% below average. The June and August contracts lost a total of 5,556 of open interest. As this report is being compiled on June 7, the August contract is trading 2.40 lower and has made a daily low of 1236.90, which takes out yesterday’s print of 1242.10 and is the lowest since 1209.10 made on June 3. The low for the move occurred over the Memorial Day weekend when the August contract printed 1201.50. Realistically, we think this is going to be the low for the move.

There are a number of pivot point we are watching to determine when gold will begin to gain momentum to challenge the May 2 high of 1308. The first indication would be if the August contract makes a daily low above the pivot point of 1251.00. For now, continue to stand aside.

Silver:

July silver gained 8.2 cents on volume of 50,009 contracts. Total open interest declined by 1,543 contracts, which relative to volume is approximately 10% above average. This is the second day in a row in which silver prices advanced and total open interest has declined. Additionally, the open interest action in silver is bearish whereas in gold it is bullish.As this report is being compiled on June 7, the July contract is trading 4.7 cents lower on the day. Continue to stand aside.

Dollar index: On June 6, the June and September dollar index generated short and intermediate term sell signals. We have no recommendation.

Swiss franc: On June 6, the June and September Swiss franc generated short-term buy signals and will generate intermediate term buy signals on June 7. We have no recommendation.

Canadian dollar: The June and September Canadian dollar will generate short-term buy signals on June 7. Both contracts remain on intermediate term buy signals.

The June Canadian dollar advanced 68 pips on volume of 80,721 contracts. Total open interest increased by a substantial 3,464 contracts, which relative to volume is approximately 65% above average. As this report is being compiled on June 7, the June contract is trading 18 pips above yesterday’s close and has made a new high for the move of 78.36, which takes out yesterday’s print of 7810. We have no recommendation.

Australian dollar: On June 6, the June and September Australian dollar generated short-term buy signals, but remain on intermediate term sell signals.

The June Australian dollar gained 13 pips on volume of 117,738 contracts. Total open interest decreased by 1,069 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on June 7, the June contract is trading 71 pips higher and has made a new high for the move of 74.57, which is the highest print since 74.68 made on May 6. We have no recommendation.

Euro: On June 6, the June and September euro generated short term buy signals and intermediate term buy signals on June 7.

The June euro advanced 28 pips on volume of 247,662 contracts. Total open interest increased by a massive 9,927 contracts, which relative to volume is approximately 55% above average. As this report is being compiled on June 7, the June contract is trading 18 pips lower and has not taken out yesterday’s high of 1.1395. We have no recommendation.

British pound:

The June British pound lost 56 pips on heavy volume of 179,687 contracts. Total open interest declined by 5,939 contracts, which relative to volume is approximately 50% above average meaning liquidation with substantial on yesterday’s decline. Yesterday, the June contract fell to 1.4351, but rebounded to close substantially above the days lows.

As this report is being compiled on June 7 the June contract is trading 92 pips higher and has made a daily high of 1.4669, which is the highest print since 1.4729 made on May 31. We discourage trading the pound due to its extreme volatility and as a consequence options are expensive.

Yen: On June 6 the June and September yen generated short-term buy signals, which reversed the May 19 short-term sell signals. Both contracts remain on intermediate term buy signals.

The June yen lost 60 pips on volume of 197,512 contracts. Total open interest increased by 3,736 contracts, which relative to volume is approximately 25% below average, however an open interest increase on yesterday’s decline indicates that short sellers were entering the market and driving prices lower, not liquidation. As this report is being compiled on June 7, the June contract is trading 10 pips higher and has made a daily low of .9268, which is below yesterday’s print of .9290. We have no recommendation.

10 Year Treasury Note: On June 6 the September 10 year U.S. treasury note generated short and intermediate term buy signals. We have no recommendation.