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July soybeans closed 4 3/4 cents higher on light volume of 147,774 contracts. Total open interest declined by 298 contracts. Open interest in the July contract declined by 3,742 contracts on volume of 81,906 contracts, which in relation to volume is a fairly heavy decline. The market remains on an intermediate term buy signal and a short-term sell signal. Stand aside.
July soybean meal closed $3.20 higher on light volume of 54,015 contracts. Open interest increased by 977 contracts on volume of 37,323 contracts. Open interest in the July contract declined by 148 contracts. The market remains on an intermediate term buy signal and a short-term sell signal. Stand aside.
July corn closed 16 cents lower on volume of 312,771 contracts. Open interest increased on the decline by 2,951 contracts. Remarkably, open interest in the July contract only declined 8 contracts on volume of 177,673 contracts. The open interest increase was primarily in the September contract. Considering the magnitude of the decline in the July contract, and the unchanged open interest confirms in my mind that speculators who were long at higher levels have been blown out. The unchanged open interest in the July contract on May 29 signifies that old longs and shorts were being replaced by new longs and shorts. Another interesting aspect of trading on the 29th was that the July-December 2012 spread narrowed to 45 cents premium to July. This is the narrowest the spread has been since July 6, 2011 when the spread closed at 36 cents. The September-December 2011 spread (the July contract was off the board) then rocketed to $1.26 3/4 on August 30, 2011 when September corn topped out at $7.94. The fact that the spread is narrowing down to levels seen last year is another indication the downside appears to be limited. The market remains on a short and intermediate term sell signal. Stand aside.
July wheat closed 23 1/4 cents lower on volume of 121,017 contracts. Total open interest declined by 986 contracts. Open interest in the July contract declined by 4,795 contracts on volume of 81,727 contracts, which is heavy liquidation in relation to the volume. As I pointed out in yesterday’s post, open interest increased with price on the 28th and the latest COT report showed that speculators got net long. The market proceeded to blowout the longs, just as it had blown out the shorts in the previous week. It is important to note that on the wheat continuation chart, the 50 day moving average is $6.35, 150 day $6.30, and the 200 day moving average is $6.42, which is where the market should find support. For the market to generate an intermediate term sell signal, the market’s daily high has to be below $6.44 1/4. Stand aside.
July crude oil lost 10 cents on volume of 452,296 contracts. Open interest increased by 466 contracts. Crude oil generated a short-term sell signal on March 29, 2012, and generated an intermediate term sell signal on May 7, 2012. As I write this on May 30, July crude oil is $2.94 lower. Stand aside.
July gasoline gained 18 ticks on volume of 138,411 contracts. Open interest declined by 4,031 contracts, which is the eighth day in a row that open interest has declined in gasoline. In yesterday’s post I indicated that there was support at the $2.80 level going back to early January. Additionally, I thought that the decline in gasoline prices might be stabilizing. I was certainly wrong about that because as I write this on May 30, July gasoline is down 6.83 cents, which is a new low for the move. On April 17, gasoline generated a short-term sell signal and generated in intermediate term sell signal on May 15. Stand aside.
July copper closed 1.40 cents higher on huge volume of 110,132 contracts. Open interest declined by 1,572 contracts. At one point copper was 6.05 cents higher on the day, but closed at $3.4620, which was not far from the low the day of $3.4485. Due to the massively oversold condition of the market, I have been suggesting that speculators wait for a 15-20 cent rally before implementing bearish positions. The market is far weaker than I thought despite being bearish on the metal as evidenced by the report in the April 15, 2012 Weekend Wrap. Speculators should continue to wait for a rally up to the $3.64-$3.68 level. Stand aside.
June gold closed $20.20 lower on extremely heavy volume of 484,721 contracts, which is undoubtedly at the very high end of historical volume. Open interest declined by 15,692 contracts, which can be attributed to nearing the first notice day for the June contract. During the past three sessions total open interest has declined by 21,690 contracts. As I write this on May 30, August gold is $18.60 higher after having made a low of $1532.10. As I have mentioned before, speculators who would like to embark upon a plan to acquire gold for the long term at lower prices should consult with their investment advisor or broker.
July silver lost 59.5 cents on heavier than normal volume of 63,807 contracts. Open interest declined by 1,420 contracts. Stand aside.
The June Euro lost 29 points on extremely heavy volume of 410,853 contracts. Open interest increased by 11,692 contracts. The open interest increase was above average, but not extreme considering the heavy volume. As I write this on May 30, the June Euro is 1.04 cents lower. Stand aside.
S&P 500 E mini:
The June S&P 500 E mini gained 18.50 points on volume of 2,249,967 contracts. Volume on the advance was unimpressive and was only 67,817 contracts higher than May 24 when the S&P 500 E mini closed up 6.75 points. Open interest increased on the advance by 17,279 contracts, which is a modest increase in relation to the volume. As I write this on May 30, the S&P 500 E mini is 19.25 points lower. Long put protection should be maintained.