5 Soybeans:

August soybeans lost 8.25 cents on volume of 130,109 contracts. The open interest declined by 5,728 contracts, which relative to volume is approximately 75% above average meaning that liquidation was fairly heavy on the decline. However, this is positive open interest action relative to the price decline. The August contract lost 2,488 of open interest, and first notice day is at the end of July. As this report is being compiled on July 19, soybeans are trading 19.25 cents higher and have made a new high for the move at $14.92 3/4. Soybeans remain on a short and intermediate term buy signal.

Soybean meal:

August soybean meal gained $1.30 on volume of 84,796 contracts. Total open interest declined by 4,295 contracts, which relative to volume is approximately 100% above average, meaning that liquidation was fairly heavy on the modest price advance. The August contract, which will enter first notice day at the end of the month lost 3,675 of open interest. As this report is being compiled on July 19, soybean meal is trading $11.60 higher and has made a new high for the move at $484.70. Soybean meal remains on a short and intermediate term buy signal.

Corn:

September corn gained 2.50 cents on volume of 212,489 contracts. Open interest increased by 6,919 contracts, which relative to volume is approximately 30% above average. As this report is being compiled, September corn is trading 2.50 cents higher. Corn remains on a short and intermediate term sell signal.

Wheat:

September wheat lost 4.50 cents on volume of 81,925 contracts. Open interest declined by 710 contracts, which relative to volume is approximately 50% less than average. As this report is being compiled on July 19, wheat is trading 7.75 cents higher. Wheat remains on a short and intermediate term sell signal.

Cotton:

December cotton gained 1.18 cents on volume of 14,870 contracts. Open interest increased by a massive 1,863 contracts, which relative to volume is approximately 285% above average, meaning that new longs and shorts were entering the market at extraordinarily high levels and longs were clearly in control. As this report is being compiled on July 19, December cotton is trading 1.02 cents higher and has made a high of 86.39, which is its highest price since July 11 when December cotton reached 87.11. Cotton remains on a short and intermediate term sell signal.

Live cattle:

October live cattle advanced 1.05 cents on volume of 49,628 contracts. Total open interest increased by 1,861 contracts, which relative to volume is approximately 50% above average, meaning that new longs were entering the market fairly aggressively and pushing prices higher. Making this more impressive was the fact that August lost 3,119 of open interest. As this report is being compiled on July 19, October cattle is trading 40 points lower. Clients were stopped out at 1.25400 on July 17, and should be on the sidelines waiting for an opportunity to re-establish longs. Cattle remains on a short and intermediate term buy signal.

Crude oil:

September crude oil advanced $1.46 on volume of 715,326 contracts. Total open interest increased by 4,480 contracts, which relative to volume is approximately 60% less than average. Although, the total open interest increase was unimpressive, the August contract lost 20,862. On July 18, the spread between WTI and Brent continued to narrow, and as this report is being compiled on July 19, WTI is trading at a slight premium to Brent. This is the first time in 3 years that this has occurred. We continue to think the $109.72 high made in the August Brent contract on July 16 will provide resistance for a move higher. WTI remains on a short and intermediate term buy signal.

Brent crude oil:

September Brent crude oil gained 9 cents on volume of 505,249 contracts. Open interest increased by 3,771 contracts, which relative to volume is approximately 65% less than average. Brent remains on a short and intermediate term buy signal.

Heating oil:

September heating oil gained 2.95 cents on fairly heavy volume of 167,963 contracts. Volume on July 18 took out the volume high of 164,463 contracts made on July 12 when heating oil advanced 3.44 cents and total open interest increased by 7,801 contracts. On July 18, total open interest declined by 3,356 contracts, which relative to volume is approximately 20% less than average. The August contract accounted for loss of 5,043 of open interest. Heating oil made a new high for the move at $3.1113, which is its highest price since February 2013. As this report is being compiled on July 19, heating oil is trading 1.95 cents lower.

Gasoline:

September gasoline advanced 0.68 cents on volume of 143,264 contracts. Total open interest increased 6,276 contracts, which relative to volume is approximately 65% above average, meaning that new longs and shorts were aggressively entering the market, but were unable to move gasoline prices beyond a fractionally higher close. Gasoline remains on a short and intermediate term buy signal.

Natural gas:

August natural gas advanced 18.3 cents on very heavy volume of 469,170 contracts. Volume on July 18 was slightly above June 13 volume of 468,877 contracts when August natural gas closed at $3.837. On July 18, total open interest increased by 10,808 contracts, which relative to volume is average. Making the total open interest increase more impressive was the fact that the August contract lost 6,506 of open interest. In short, from a price, volume and open interest standpoint, natural gas had one of its best days of the past 2 months. Obviously, one day does not make a change in trend, but it is highly likely we have seen the lows in natural gas for the time being. The low for the move in the August contract occurred on June 28 when it reached $3.526 and $3.835 on July 18 was the highest since August natural gas reached 3.842 on June 24. Natural gas remains on a short and intermediate term sell signal.

Euro:

The September euro lost 10 points on volume of 172,759 contracts. Open interest declined by 533 contracts, which relative to volume is approximately 85% below average. The euro remains on a short and intermediate term sell signal.

S&P 500 E mini:

The S&P 500 E mini advanced 5.00 points on volume of 1,358,727 contracts. Open interest increased by 29,945 contracts, which relative to volume is approximately 5% below average. This is the best open interest increase since the rally began on June 25. Unfortunately, for longs, the hefty open interest increase is coming at a time when the E mini reached a new high for the move at 1688.00. We do not believe in taking tops or bottoms, but the risk to anyone being in the market is on the downside, and the upside is not worth it. We continue to suggest long put protection, especially for those who hold long equity positions. As an alternative, writing calls that are significantly out of the money appears to be a fairly low risk proposition at current levels.