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July soybeans closed 36.75 cents higher on slightly above average volume of 222,480 contracts. Volume was light considering the magnitude of the advance and as a comparison, the average daily volume for May was 207,099 contracts and year to date average daily volume is 209,261 contracts. Total open interest increased by 6,655 contracts and open interest in the July contract declined by 2,066 contracts on volume of 102,726 contracts. The total open interest increase was healthy, however, I would’ve much preferred to see the volume increase significantly on the advance. As I write this on June 7, July soybeans are up by 30 cents, however a short-term buy signal will not be generated on June 7. The market remains on an intermediate term buy signal, but in order to establish bullish positions, the short term buy signal must be generated as well.
July soybean meal closed $14.60 higher on volume of 71,829 contracts. Volume was above the average daily volume for May of 67,329, but was slightly less than the average daily volume on a year-to-date basis of 72,456 contracts. Total open interest increased by 2,675 contracts and open interest in the July contract declined by a slight 145 contracts on volume of 43,824. Based upon volume and open interest, soybean meal outperformed soybeans. Additionally, on a purely price basis, soybean meal advanced 3.65% on June 6 versus a 2.72% advance for soybeans. There is no question that a buy signal will be generated in soybean meal before soybeans. For a short-term buy signal to be generated, the low of the day must be above $421.40. The market remains on an intermediate term buy signal, and once a short-term buy signal is generated, bullish positions can be implemented.
July corn closed 18.75 cents higher on volume of 278,294 contracts. Considering the magnitude of the advance, volume was rather tepid and as a point of comparison, the average daily volume for the month of May was 280,114 contracts and on a year-to-date basis, the average daily volume was 320,976 contracts. Total open interest increased by 4,611 contracts and open interest in the July contract declined by 11,766 contracts on volume of 129,366. Buying in the back months offset the open interest decline in the July contract. Regardless, the low volume and relatively low increase of open interest in relation to volume indicates a lack of enthusiasm on the part of market participants. The July-December 2012 bull spread widened by another 7 cents on June 6. This is bullish spread action and indicates healthy demand for corn in the near term. As I write this on June 7, July corn is up by 11.25 cents. The market remains on a short and intermediate term sell signal. Stand aside.
July wheat closed 11.00 cents higher on volume of 140,220 contracts. Compared to corn, soybeans, soybean meal, wheat had the healthiest volume on the advance and traded above the average daily volume for May of 121,395 contracts and the average daily volume on a year-to-date basis of 112,096 contracts. Also, wheat had a heavy increase in open interest at 6,323 contracts, which means that longs and shorts feel very strongly about the direction of wheat prices. However its performance was worse than corn at +1.79% versus corn increasing by 3.30% on June 6. The market generated an intermediate term sell signal on June 4. I believe the market will run into resistance around the $6.60 level. Stand aside.
July crude oil gained 73 cents on relatively heavy volume of 647,809 contracts. Open interest increased by 4,497 contracts. The open interest increase in relation to volume was low, which indicates a lack of enthusiasm on the part of market participants to take positions. The market couldn’t hold its gains and closed over dollar from the high for the day. Stand aside.
July gasoline gained .56 cents on volume of 161,328 contracts. Open interest increased by 4,999 contracts. Since making its low of $3.2380 on June 4, the market rallied to a high of 2.7263 on June 6. However, the market couldn’t hold the high and closed at $2.6903, which was 3.60 cents off a high. During June 4-June 6, open interest increased by 15,212 contracts. While the open interest increases during the past three trading sessions have been very healthy in relation to volume, gasoline only closed 1.96 cents higher from June 4 to June 6. Stand aside.
July copper closed 9.00 cents higher on relatively heavy volume of 85,005 contracts. Open interest declined on the advance by 4,747 contracts, which in relation to volume was a very heavy decline. The market continues to act in a bearish fashion, and as I have said before, I would like to see the market rally to the $3.64 area before implementing bearish positions. Stand aside.
August gold closed $17.30 higher on volume of 194,243 contracts. Open interest increased by 3,111 contracts. Although the market closed at a new high for the move, and closed above above the 50 day moving average of $1622.84, the open interest increase was below average, which indicates a reluctance by speculators to take positions at ever higher prices. The last time gold closed above its 50 day moving average was on March 12, 2012. The market made a new high for the move at $1642.40, and closed at $1634.20, which was the highest price and highest close since May 7. Gold generated a short-term buy signal on June 6 because the low of the day was above the key short-term pivot point of $1612.70. As I said in yesterday’s post, the market has to close above the key pivot points of $1628.10, $1641.50 and $1653.40 before an intermediate term buy signal can be generated. As I write this on June 7, August gold is down $45.10. Before bullish positions can be implemented, both short and intermediate term buy signals must be generated. Investors and speculators should be consulting their investment advisor or broker before implementing a plan to accumulate gold.
July silver gained $1.08 on heavy volume of 77,683 contracts. Volume was the highest since at least May 1 and broke the high of 73,772 contracts traded on June 1. Open interest increased by a massive 4,508, which in relation to volume is an extremely heavy increase. This action indicates that longs and shorts feel very strongly about the direction of silver. Silver is going to have to perform much better before long positions can be implemented. As I write this on June 7, July silver is down 93.3 cents. The market remains on a short and intermediate term sell signal. Stand aside.
The June Euro gained 1 cent on heavy volume of 390,486 contracts. Open interest increased by a minuscule 1,916 contracts, which is an unimpressive number, and shows a lack of enthusiasm to take postions by market participants. I have been warning readers to avoid bearish positions because the market is overloaded with speculative shorts. Stand aside.
S&P 500 E mini:
The June S&P 500 E mini closed 30.50 points higher on very heavy volume of 3,074,965 contracts. Open interest increased by a minuscule 21,980 contracts which in relation to the volume shows a lack of enthusiasm to take positions by market participants. Maintain long put protection.