Soybeans:

May soybeans gained 3.25 cents on volume of 183,094 contracts. Open interest declined by 916 contracts, which in relation to volume is approximately 75% less than average. The May contract lost 5,224 of open interest. As this report is being compiled, May soybeans are trading 14.75 cents lower. The market remains on a short and intermediate term sell signal. Although soybeans look weak, we would not chase the market at current levels.

Soybean meal:

We are suspending further reports in soybean meal until we see a trading opportunity.

Soybean oil:

We are suspending further reports in soybean oil until we see a trading opportunity.

Corn:

May corn lost 1.75 cents on heavy volume of 407,374 contracts. Volume declined approximately 188,000 contracts from April 1 when corn lost 53 cents and open interest declined 16,499 contracts. On April 2, open interest declined by 26,574 contracts, which in relation to volume is approximately 155% above average, meaning that liquidation was extremely heavy. The May contract lost 30,342 of open interest. May corn made a new low for the move at $6.34, which is the lowest price for May corn since June 2012. There is no support for corn until it reaches $5.80-6.00. Maintain short call positions that we recommended on March 25, but do not implement short or long positions at this juncture. 

For the past 3 trading sessions, corn has fallen a total of 94.75 cents, and open interest has declined by a total of 26,929 contracts. The minor decline of open interest combined with a large number of speculative longs point to more selling ahead. The market looks extremely weak, and any rally will be met by major selling from longs with large losses. Therefore, it is likely that rallies will be shallow and short-lived until the bulk of speculative longs have liquidated. On March 28, May corn generated a short and intermediate term sell signal.

Wheat:

May wheat gained 6.75 cents on heavy volume of 175,340 contracts. Amazingly, volume in wheat increased by 22,000 contracts from April 1 when May wheat lost 23.75 cents and open interest increased by 1,694 contracts. Remarkably, the range on April 2 was 10 cents and the range on April 1 was 29.75 cents. In short there was approximately 15% more volume on April 2, even though the range was 65% less than on April 1. On April 2, total open interest declined by 6,939 contracts, which in relation to volume is approximately  50% above average. Wheat remains on a short and intermediate term sell signal, but we are seeing signs of independent strength.

Crude oil:

May WTI crude oil gained 12 cents on volume of 508,715 contracts. Open interest increased by 6,527, which in relation to volume is approximately 45% below average. May Brent crude declined 39 cents on volume of 659,719 contracts. Open interest increased by 4,881 contracts, which in relation to volume is approximately 65% below average.

For the past 7 trading sessions beginning on March 22 through April 2, open interest in WTI has increased 81,789 contracts and May crude oil has advanced $4.74. Brent crude oil advanced $3.72 in the same 7 day period. From March 22 through April 2, open interest in Brent crude has increased only 20,088 contracts. In short, open interest in WTI has increased approximately 4 x greater than Brent in the same 7 day period.

Although price and open interest action for WTI has been acting in a very bullish manner, we have told our readers that until Brent crude and either heating oil or gasoline generate a short-term buy signal, advances in WTI will tepid. Additionally, it will be vulnerable for a setback, which is overdue. Brent remains on a short and intermediate term sell signal and gasoline remains on a short-term sell signal and an intermediate term buy signal, while heating oil remains on a short and intermediate term sell signal. As this report is being compiled, May WTI is trading $2.04 lower and has made a new low for the move at $94.89. May Brent is trading $2.54 lower and has made a new low for the move at $107.78. Currently, WTI is trading at its 50 day moving average of $95.25, but a move to $93.80 appears likely.

Heating oil:

May heating oil gained 1.87 cents on volume of 129,411 contracts. Open interest increased by 3,600 contracts, which in relation to volume is average. On April 2, May heating oil touched 50 day moving average of $3.103, but was unable to hold the gains and closed at $3.089. Heating oil remains on a short and intermediate term sell signal, and as this report is being compiled, May heating oil is trading 5.83 cents lower. Stand aside.

Gasoline:

May gasoline lost 6.07 cents on heavy volume of 182,101 contracts. Open interest declined by 4,230, which in relation to volume is approximately 10% below average. As this report is being compiled, May gasoline is trading 9.15 cents lower. If gasoline breaks down to $2.90, there is no support until the $2.72 area. One factor that is powering gasoline sharply lower is the very high long to short ratio of managed money. For example, as of the latest report COT report, managed money is long gasoline by a ratio of 10.87:1, which is down from the previous week of 12.28:1 but up from the ratio of 2 weeks ago of 9.32:1. This compares to manage money being long WTI crude by a ratio of 5.66:1 and managed money being short heating oil by a ratio of 1.02:1.

Natural gas:

May natural gas lost 4.6 cents on light volume of 353,748 contracts. Open interest increased by 4,178 contracts, which in relation to volume is approximately 55% less than average.

For the past 11 trading sessions beginning on March 18, open interest has increased 142,913 contracts while natural gas has advanced 7.5 cents. The massive open interest increase compared to the relatively small advance should concern anyone long the market. Heavy selling is capping prices and the shorts are in control. Speculators have rushed into the long side, which makes the market vulnerable to a significant pullback. For clients who are long futures or options, we have suggested they write out of the money calls. We recommend that sell stops be placed at $3.885. Natural gas remains on a short and intermediate term buy signal.

Copper:

May copper advanced .0040 cent on volume of 63,432 contracts. Open interest increased by 254 contracts, which is minuscule and dramatically below average. As this report is being compiled, copper is trading 4.95 cents lower, and has made a new low for the move at $3.3280. The copper market appears to be in free fall, and we suggest that it would be unwise to chase the market. A rally could occur at any time 

Gold:

June gold lost $25.00 on volume of 178,168 contracts. Open interest increased by 10,064 contracts, which in relation to volume is approximately 120% above average, meaning that new shorts were entering aggressively and driving prices lower. As this report is being compiled, gold is trading $22.70 lower and has made a new low for the move at $1549.70. Stand aside.

 Platinum:

July platinum lost $24.60 on volume of 8054 contracts. Open interest declined 332 contracts, which in relation to volume is approximately 50% above average. As this report is being compiled, July platinum is trading $38.60 lower and is made a new low for the move at $1534.00. Platinum remains on a short and intermediate term sell signal. Stand aside.

Silver:

May silver lost 69.6 cents on heavy volume of 71,548 contracts. Volume was the highest since February 27 when 82,860 contracts were traded and May silver closed at $28.985. On April 2, open interest increased by 646 contracts, which in relation to volume is approximately 50% less than average. As this report is being compiled, May silver is trading 37.8  cents lower and has made a new low for the move at $26.670. Silver remains on a short and intermediate term sell signal. Stand aside. 

Australian dollar:

The Australian dollar gained 21 points on volume of 73,703 contracts. Open interest increased by 2,076 contracts, which in relation to volume is average. The market had a very shallow setbacks on March 27 and 28, and has moved higher since then and made a new high for the move on April 3 of 1.0438. The Australian dollar is correcting against the Japanese yen, and we want to see this correction run its course before recommending new bullish positions in the Australian dollar.

Euro:

The June euro lost 34 points on very light volume of 217,546 contracts. Open interest increased by a massive 11,110 contracts, which in relation to volume is approximately 100% above average. On March 27, open interest increased by 15,496 contracts on volume of 289,611 contracts. Relative to volume the open interest increased was approximately 115% above average. The market looks weak, but a surprise rally could be on the horizon. Managed money is massively short the euro at this juncture.

S&P 500 E mini:

The S&P 500 E mini gained 8.50 points on volume of 1,612,061 contracts. Open interest increased by 11,999 contracts, which in relation to volume is approximately 75% below average. Surprisingly, the number of stocks trading above their 50 day moving average on the New York Stock Exchange fell to 1465 from 1496 on April 1. We have been tracking this metric for our readers in order to point out the internal weakness of the market. The fact that the number of stocks trading above their 50 day moving average fell to the lowest level since late February while the E mini made a new high and a new closing high underscores the vulnerability of the market. Another factor to consider: since the Russell 2000 made its high on March 15 through April 2, it has declined 1.91%. Compare this to the S&P 500 advancing 0.61%, DJIA +1.02%, NASDAQ 100+0.76% in the same time frame. In short, the market is giving indications that it is struggling at current levels. As this report is being compiled, the S&P 500 E mini is trading 13.50 points lower and has made a low of 1546.25, which is the lowest since March 27 of 1545.75. We continue to advocate writing calls that are significantly out of the money, and/or writing calls that are significantly out of the money combined with buying calls that are further out of the money.