Soybeans:

July soybeans lost 5.75 cents on volume of 104,984 contracts.Total open interest increased by 1,264 contracts, which relative to volume is approximately 45% below average. The July through September 2014 contracts all lost open interest totaling 2,805. The total open interest increase can be attributed to November which added 2,636 contracts

As this report is being compiled on June 2, July soybeans are trading 10.25 cents higher and has made a daily high of 15.11 3/4, which is the highest print since May 27 when July soybeans made a high of 15.15 1/4. During yesterday’s evening session, the market gapped lower and traded lower throughout the evening and into the day session, and then began to rally after 9:30 am CDT. The performance of soybeans on June 2 is outstanding, and it looks to trade significantly higher in the coming week. If contemplating bullish positions, we recommend using the June 2 low of 14.78 1/4, which is the lowest print since May 21 (14.67 1/2). As we have pointed out on a number of occasions, we much prefer soybean meal to soybeans.

Soybean meal:

July soybean meal advanced $1.80 on volume of 43,742 contracts.Total open interest increased by 776 contracts, which relative to volume is approximately 25% below average, however the July contract lost 995 of open interest, which makes the total open interest increased more impressive (bullish).

As this report is being compiled on June 2, July soybean meal is trading $6.90 higher and has made a new contract high of 509.40, which takes out the previous contract high of 508.00 made on May 22. Like soybeans, soybean meal traded lower throughout the evening and most of the day session, then began to rally in earnest when the pit session opened at 9:30 a.m. CDT. The performance of soybean meal is nothing short of terrific, and as we said before, we think all-time highs are in the offing. The long July 2014 short August 2014 spread has widened out, and we expect the spread to trade at new contract highs. Continue to hold this position. Also, on May 27 we recommended initiating bullish positions in soybean meal, which could take the form of writing puts in the July contract, buying August calls or initiating long futures position in the July contract. We recommend using the May 28 low of 492.7 as an exit point, but this can be moved up slightly below the June 2 low of $494.10.

Corn:

July corn lost 3.75 cents on volume of 259,655 contracts.Total open interest declined by 4,803 contracts, which relative to volume is approximately 20% below average. The July contract accounted for loss of 12,516 of open interest.As this report is being compiled on June 2, July corn is trading 0.75 cents lower after making a new low for the move at $4.60 1/4. July corn remains on a short and intermediate term sell signal, and until corn has a rally, we cannot recommend bearish positions. Stand aside.

Kansas City wheat:

July Kansas City wheat lost 7.50 cents on heavy volume of 21,912 contracts. Volume was the strongest since May 22 when July KC wheat lost 9.75 cents on volume of 23,987 contracts and total open interest declined by 1,899 contracts. On May 30, total open interest increased by 794 contracts, which relative to volume is approximately 45% above average. As this report is being compiled on June 2, July KC wheat is trading 3.25 cents lower after making a new low for the move at $7.10 3/4. July Kansas City wheat will generate an intermediate term sell signal on June 2. We much prefer to initiate bearish positions in Chicago wheat rather than Kansas City wheat, but Chicago needs to rally before we will recommend bearish positions. Stand aside.

Cotton:

July cotton gained 12 points on volume of 26,616 contracts. Total open interest declined by 710 contracts, which relative to volume is average. The July contract lost 1,562 of open interest. As this report is being compiled on June 2, July cotton is trading 10 points lower on the day and has made a high of 86.71, which is below 86.94, the high made on May 29.

From the May 29 report:

“On May 12th, July cotton generated a short-term sell signal and on May 23 generated an intermediate term sell signal.Cotton has not had a decent countertrend rally, which would have enabled more clients to initiate bearish positions. However, for those of you who initiated bearish positions per the May 13 report, these have become significantly profitable. In the report of May 21, OIA advised clients to lower their exit point to the May 22 high of 90.66. Additionally, on May 23, OIA recommended liquidating partial positions, or alternatively buy calls against bearish positions because a major countertrend rally is likely before the bottom is in.”

Coffee:

July coffee lost 4.45 cents on total volume of 27,461 contracts. Volume increased from the 25,489 contracts traded on May 29 when July coffee advanced 5.80 cents and total open interest increased by 284 contracts. On May 30, total open interest declined by 1,009 contracts, which relative to volume is approximately 45% above average meaning that liquidation was fairly heavy on the decline. As this report is being compiled on June 2, July coffee is trading 3.05 cents lower and has made a low of 1.7350, which is above the low for the move of 1.7080 made on May 28. It appears likely that July coffee will generate an intermediate term sell signal, and for this to occur the daily high must be below OIA’s key pivot point of 1.7730.

Live cattle:

August live cattle lost 57.5 points on volume of 37,250 contracts. Total open interest increased by 748 contracts, which relative to volume is approximately 20% below average. The June contract lost 1,842 of open interest, which makes the total open interest increase potentially bearish. However, as this report is being compiled on June 2, August cattle is trading 50 points higher and has made a daily high of 1.39250, which is below the May 30 high of 1.39750.On May 29 OIA recommended a bull call spreads in cattle, and this position should continue to be held.

WTI crude oil:

July WTI crude oil lost 87 cents on volume of 340,765 contracts. Total open interest increased by 4,389 contracts, which relative to volume is approximately 45% below average. As this report is being compiled on June 2, July WTI is trading 27 cents lower and has made a new low for the move at 102.10. We recommend that crude oil be avoided on the long or short side. Please review the June 1 Weekend Wrap for more details.

Natural gas:

July natural gas lost 1.7 cents on volume of 223,024 contracts. Total open interest increased by 3,125 contracts, which relative to volume is approximately 40% less than average. As this report is being compiled on June 2, July natural gas is trading 3.4 cents higher and has made a daily high of $4.620, which takes out the May 30 high of 4.592.The open interest action on price advances and declines continues to be bearish and natural gas remains on a short and intermediate term sell signal. However, as we have pointed out numerous times before, the spread action is unquestionably bullish, and it appears that natural gas may generate a short-term sell signal shortly.

Gold:

August gold lost $11.10 on light volume of 145,733 contracts. Total open interest increased by 3,303 contracts, which relative to volume is approximately 10% below average, however an open interest increase on a price decline to new lows for the move is bearish. As this report is being compiled on June 2, August gold is trading $1.50 lower on the day, and has made a new low of $1241.10, which is slightly below Friday’s low of 1242.20. August gold remains on a short and intermediate term sell signal. Stand aside.

Platinum:

July platinum lost $7.40 on volume of 12,318 contracts. Total open interest increased by 302 contracts, which relative to volume is average.We encourage clients to review our comments on platinum in the June 1 Weekend Wrap. In addition to the massive long position held by managed money, since July platinum topped out on May 22 at $1497.80, through May 30, total open interest has increased by 476 contracts, which is bearish open interest action relative to the price decline of $40.40 from May 23 through May 30. As we said in the June 1 report, it appears the bearish situation in gold and silver is spilling over into platinum, and platinum will generate a short-term sell signal within the next day or two.

British pound:

The June British pound advanced 43 pips on volume of 84,567 contracts. Total open interest increased by 3,325 contracts, which relative to volume is approximately 55% above average meaning that new longs were entering the market in significant numbers and driving prices higher. However, as this report is being compiled on June 2, the June pound is trading 16 pips lower on the day. On May 29, the June pound generated a short-term sell signal, and we were looking for another day’s rally before recommending the initiation of bearish positions. Keep in mind the European Central Bank will be meeting on June 5 and this will have a major impact on the euro, and some spillover impact on the pound. We recommend a stand aside posture until the release of the results of the meeting on June 5.

S&P 500 E mini: We are suspending coverage on the E mini until such time as we see a trading opportunity, or a change in signal(s). We continue to recommend downside protection for clients who hold long equity positions.