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Soybeans:
July soybeans closed 8.25 cents higher on volume of 239,234 contracts. Total open interest declined by 953 contracts and open interest in the July contract declined by 17,662 contracts on volume of 88,328. The old crop July versus the new crop November bull spread narrowed by 17 cents. In contrast to soybean meal, the buying in the forward months was not enough to offset the decline of open interest in the July contract. As I write this on June 19, July soybeans are 54.50 cents higher. Although soybeans continue to be on an intermediate term buy signal, they have yet to generate a short-term buy signal. Stand aside.
Soybean meal:
July soybean meal closed $2.80 higher on heavy volume of 111,158 contracts. Open interest increased by 3,221 contracts and open interest in the July contract declined by 10,635 on volume of 45,840 contracts. The open interest increase was above average and contrasts sharply with the volume and open interest action in soybeans. Despite the hefty decline of open interest in the July contract, there was enough buying in the forward months to offset that and generate a positive open interest number. The old crop July versus new crop December bull spread narrowed by $11.60. Soybean meal is on a short and intermediate term buy signal. As I write this on June 19, July soybean meal is $15.20 higher. Consult your investment advisor or broker regarding timing and entry points for long positions.
Corn:
July corn closed 20 cents higher on relatively heavy volume of 384,895 contracts. Total open interest declined by 14,334 contracts and open interest in the July contract declined by 21,858 on volume of 136,335 contracts. The decline of total open interest was fairly massive in relation to volume. Open interest has declined for eight consecutive days, which brings the total to 53,759 contracts. During this period, corn advanced by 13.25 cents. On a year-to-date basis corn has declined by 61.75 cents, or 9.34%. Although the massive decline in open interest during a period of slightly rising prices is bearish, the old crop situation is tight and potentially very bullish. Stand aside.
Wheat:
July wheat advanced 20.75 cents on lighter than normal volume of 123,881 contracts. Open interest declined by 3,558 contracts and open interest in the July contract declined by 6,839 on volume of 54,147 contracts. The managed money crowd is net short, and in my view on the wrong side. The market remains on a short and intermediate term sell signal. Stand aside.
Crude oil:
August crude oil lost 73 cents on volume of 569,987 contracts. Open interest declined by 7,712 contracts. The market has been trading in the sideways pattern since June 4 and from that date through June 18, open interest has increased by 20,678 contracts while the price of crude oil declined by 25 cents. The question at this juncture is whether crude is consolidating for another leg lower, or is building a base for an eventual move higher. Stand aside.
Gasoline:
August gasoline lost 3.92 cents on light volume of 118,146 contracts. Open interest declined by 798 contracts. This market, like crude oil, does not seem to have the ability to mount a sustained rally, despite the summer driving season. Stand aside.
Copper:
July copper closed fractionally higher, but was essentially unchanged on heavy volume of 91,089 contracts. Open interest declined by 3,689 contracts. The market had a trading range of 11.00 cents versus the 21 day average true range of 8.18 cents. The market made a high at 3.4775, but was unable to hold the highs. I want to see the market rally to the $3.60 level before implementing bearish positions. Stand aside.
Gold:
August gold closed $1.10 lower on light volume of 128,317 contracts. Open interest declined by 440 contracts. I would like to see the volume increase as price increase, but so far volume and open interest continues to increase modestly on advances. Despite this, the market has a firm undertone and readers should be consulting with their investment advisor or broker regarding accumulating gold for the long-term.
Silver:
July silver closed 6.9 cents lower on light volume of 41,288 contracts. Open interest declined by 342 contracts. For more information on my views of silver, please see the June 10 and June 17 Weekend Wrap.
Euro:
The September Euro closed 56 points lower on volume of 315,809 contracts. Open interest increased by 4,939 contracts. The market had a significantly larger trading range of 1.92 cents than the 21 day average true range of 1.13 cents. Also the market made a new high for the move at 1.2759, which was the highest price since May 22. As I have said on many occasions, the market is loaded with speculative shorts, which makes it extremely dangerous to anyone short the market. There is no reason to be involved in the Euro at this juncture. Stand aside.
S&P 500 E mini:
The S&P 500 E mini closed 3.50 points higher on volume of 2,076,310 contracts. Open interest declined by 751,051 contracts, and this is the result of the June contract going off the board. The market looks like it wants to go higher, despite the problems from Europe. In the June 17 Weekend Wrap, I said that VIX, also known as the fear index, was indicating that investors were not concerned about a major market decline. Also, I mentioned the indicators that I follow are pointing to rally, perhaps a sizable one. In the past couple of posts, I have suggested that readers consult their investment advisor or broker regarding the maintenance or liquidation of long put protection. Whatever the size of the rally, I expect that it too will fade, and that the problems in Europe will reassert themselves.
