Soybeans:

July soybeans gained 27.75 cents on light volume of 210,651 contracts. Total open interest declined by 2,671 contracts, which relative to volume is approximately 45% less than average. The May contract accounted for loss of 18,908 of open interest. The size of the advance and the tepid volume along with declining total open interest is a sign of a technically weak market. On April 30, July soybeans made a high of  $14.23 3/4. Soybeans remain on a short and intermediate term sell signal.

Corn:

July corn advanced the 40 cent limit on heavy volume of 478,671 contracts. Volume was the highest since April 1 when corn traded 595,940 contracts and corn prices declined by 53 cents while open interest declined 16,499 contracts. On April 29, open interest declined by 32,338 contracts, which relative to volume is approximately 160% above average, meaning there was extremely heavy liquidation despite the limit move. The May contract accounted for loss of 34,565 of open interest, which means there were few players willing to make new commitments in the July 2013 forward months. This is bearish open interest action relative to the price advance. Corn remains on a short and intermediate term sell signal. Stand aside.

Wheat:

July wheat gained 24 cents on heavy volume of 133,979 contracts. Open interest declined by 7,435 contracts, which relative to volume is approximately 120% above average meaning that liquidation was very heavy on the advance. The May contract accounted for loss of 13,007 of open interest. As this report is being compiled on April 30, July wheat has broken out to a new high for the move at $7.34 1/4. It is possible that July wheat will generate a short-term buy signal on May 1. On April 29, July wheat closed above its 50 day moving average of $7.11 1/2 in the July contract for the first time since early December. Upside targets for wheat are 7.42 1/2, 7.69 3/4 and 7.82 3/8. If clients are short wheat, we recommend they cover their positions immediately

Live Cattle:

June cattle closed 5 points lower on volume of 38,232 contracts. Open interest declined by 2,715 contracts, which relative to volume is approximately 185% above average. The April contract accounted for loss of 1,735 of open interest. We are waiting for confirmation of a short-term buy signal. Stand aside.

Crude Oil:

June WTI crude gained $1.50 on very light volume of 466,236 contracts. Open interest increased only 1,730 contracts, which relative to volume is approximately 85% less than average. From the time the rally began in earnest on April 24 through April 29, crude oil advanced $5.32 while open interest increased 26,129 contracts. This is an abysmal increase of open interest relative to the volume of the past 4 trading sessions. It is interesting to note that volume on April 29 was 567 contracts fewer than April 26 when the market had a much smaller range and crude oil declined 64 cents. Additionally, crude oil made a new high for the move at $94.69 on April 29, which is the highest price for crude since April 11 when crude made a high of $94.96. On April 10, crude closed at 94.97. While crude oil remains on a short and intermediate term sell signal, we think it is possible that crude could have a final thrust higher, the catalyst of which could be the EIA report released on May 1. Stand aside for now.

Natural gas:

June natural gas gained 16.9 cents on light volume of 298,408 contracts. Open interest increased by 13,072 contracts, which relative to volume is approximately 65% above average. The reason that open interest was significantly above average is because volume was abysmal. On April 29, volume tapered off dramatically when natural gas had its biggest advance since April 18 when natural gas advanced 18.7 cents on volume of 666,421 contracts and open interest increased by 23,346. The action on April 18 and 29 is analogous because on April 18 natural gas made a new high for the move of $4.429 as it did on April 29 (4.395). We advise caution on the long side at current levels. Natural gas remains on a short and intermediate term buy signal.

Copper:

July copper gained 4.10 cents on volume of 62,816 contracts. Volume shrank by half compared to April 26 when volume traded was 122,005 contracts and July copper lost 5.65 cents while open interest declined 4,677 contracts. On April 29, open interest increased 560 contracts, which relative to volume is approximately 50% below average. Copper continues to trade weakly, and remains on a short and intermediate term sell signal. It appears that the high made on April 26 of $3.2890 will act as resistance.

Gold:

June gold gained $13.80 on very light volume of 144,813 contracts. Open interest increased by 5,956 contracts, which relative to volume is approximately 55% above average. Though we have seen dollar weakness for the past 3 trading sessions including April 30, gold has been unable to gain momentum for a move significantly higher. Gold remains on a short and intermediate term sell signal. Stand aside.

Silver:

July silver gained 37.8 cents on volume of 75,461 contracts. Open interest declined by 1,846 contracts, which relative to volume is  average. Silver remains on a short and intermediate term sell signal. Stand aside.

Australian dollar:

The June Australian dollar gained 75 points on light volume of 75,523 contracts. Volume was the lowest since April 2 when 73,703 contracts were traded and the June Australian dollar closed at 1.0387. On April 29, open interest declined by 355 contracts, which relative to volume is approximately 75% less than average. This is very bearish open interest action relative to the price advance. As a matter of fact, the last time the Australian dollar rallied nearly as strongly as it did on April 29 occurred on April 16 when it rallied 62 points on volume of 152,924 contracts.

In short, the rally on April 29 exceeded that of April 16 yet volume was half what it was on April 16. In yesterday’s report, we said we would wait to see what the open interest stats showed us for trading on April 29. We now know they were very negative, and the shrinkage of volume is another bearish factor. Since the Australian dollar bottomed out on April 23 through April 29, open interest has declined by 4,823 contracts, while the Australian dollar over 1 cents. This is bearish open interest action relative to the price advance. A more conservative way to trade the Australian dollar would be to write out of the money calls because there is not a reasonable stop-loss point. The Australian dollar remains on a short and intermediate term sell signal.

Euro:

The June euro gained 68 points on light volume of 209,656 contracts. Open interest increased by 3,710 contracts, which relative to volume is approximately 25% less than average, but a fairly significant increase in light of previous advances when open interest declined. As this report has been compiled on April 30, the June euro is trading 60 points higher and has made a new high for the move at 1.3191, which is the highest for the euro since April 17 when it made a high of 1.3205. It is possible that the euro may generate a short-term buy signal on May 1.

From the report of April 26: “The June dollar index remains on a short-term sell signal, but an intermediate term buy signal. This suggests continued strength in the euro. Additionally, the June British pound generated a short-term buy signal on April 5, and it is likely to generate an intermediate term buy signal any day now.”

S&P 500 E mini:

The June S&P 500 E mini gained 11.75 points on extremely light volume of 1,244,882 contracts. Volume was the lightest since April 1 when 1,136,712 contracts were traded and the E mini lost 6.75 points while open interest increased 28,856 contracts. Additionally, the last time the E mini traded as high as it did on April 29 occurred on April 11 when it made a high of 1593.00 on volume of 3,066,533 contracts. In short, volume on April 29 was 60% less than April 11 when the E mini traded at the same level. The number of stocks trading above their 50 day moving average on April 29 was 1,570 which is up from 1,472 on April 26. In short, as the market is moving higher, many stocks are not following suit. We continue to advise put protection, especially if clients are long stocks.