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I am writing this post on June 29, and due to news from Europe, there is a rally in commodities and currencies as well as equities. I think this rally across the board will be similar to previous rallies, which tend to be one day affairs with some possible follow through on Monday. The moves that occur on June 29 should be considered anomalous and not indicative of future activity.
On June 29, there will not be any new short or intermediate term buy or sell signals generated for commodities covered in this post.
August soybeans lost 9.75 cents on total volume of 221,347 contracts. Total open interest declined by 1,190 contracts and open interest in the July contract declined by 12,052 on volume of 37,453 contracts. During the past four trading sessions, open interest has declined by 9,796 contracts and soybeans have advanced by 19.25 cents. This is bearish open interest action in relation to price. During the past four trading sessions, soybeans have been trading at the upper end of their trading range, and although soybeans are sharply higher today, this condition may not last. As I have pointed out in previous posts, investors should be consulting with their investment advisor or broker about taking full or partial profits on long positions at current levels. As I write this on June 29, August soybeans are 20.25 cents higher, and the dollar index is sharply lower, which may give commodities an additional boost temporarily.
August soybean meal lost $2.40 on total volume of 75,542 contracts. Total open interest declined by 312 contracts and open interest in the July contract declined by 4,102 on volume of 14,806 contracts. For the ninth time since May 2, July soybean meal penetrated the $434 level, but was unable to close above it. Like soybeans, it appears that soybean meal may be in a temporary topping process. I suggest that investors speak with their investment advisor or broker regarding taking full or partial profits on long positions. As I write this on June 29, August soybean meal is $5.60 higher and the dollar is sharply lower, which is giving commodities a temporary shot the arm.
September corn lost 1.25 cents on relatively heavy total volume of 435,974 contracts. Total open interest declined by 25,110 contracts and open interest in the July contract declined by 25,374 on volume of 79,775 contracts. Despite a minor loss, the total open interest decline was huge and was the largest single day loss since before June 1. Granted the 28th was one day before first notice day, but there wasn't sufficient buying in the back months to overcome the open interest decline in the July contract. The market continues to be buffeted by weather concerns and as a consequence investors should be standing aside.
September wheat lost 5.25 cents on relatively heavy total volume of 147,071 contracts. Total open interest declined by 986 contracts and open interest in the July contract declined by 6,847 on volume of 26,852 contracts. The market is going to follow in the direction of corn and is undoubtedly being influenced by the bull trend in almost all commodities on June 29. The market is on a short and intermediate term buy signal, but in my view, investors should be standing aside.
August crude oil lost $2.52 on total volume of 569,745 contracts. Total open interest declined by 2,393 contracts. Considering the magnitude of the decline, volume was relatively light and the open interest decline was significantly below average. The market made a new low for the move at $77.28, which is the lowest price for crude oil since early October 2011. As I write this on June 29, August crude oil is $6.18 higher on the day. Stand aside.
August gasoline lost 2.16 cents on total volume of 152,364 contracts. Total open interest declined by 1,766 contracts. This was the seventh day in a row that open interest declined, and this brings the seven day decline to 35,754 contracts. During this time, August gasoline has declined by 6.86 cents. As I write this on June 29, August gasoline has advanced 12.03 cents. Stand aside.
September copper lost 2.50 cents on total volume of 69,779 contracts. Total open interest declined by 1,459 contracts. As I have indicated on many occasions, I want to see copper rally up to the $3.60 level before implementing bearish positions. As I write this on June 29, September copper is 17.85 cents higher and the current price is 3.5100. The speculative short interest has been growing for a number of weeks, and this rally may clear out the short specs. Stand aside.
August gold declined by $28.00 on total volume of 153,268 contracts. Open interest increased by 912 contracts. As I write this on June 29, August gold has advanced $52.40, and undoubtedly the sharply lower dollar and the robust commodity rally has contributed to the advance. Investors should consult with their investment advisor or broker regarding acquiring gold at lower prices for the long-term.
September silver lost 76.4 cents on heavy total volume of 91,528 contracts. Total open interest increased by 1,364 contracts. The market made a new low for the move at $26.105, and broke the low of $26.15 made on September 26 and December 27, 2011. As I write this on June 29, September silver is 1.279 higher on the day. Stand aside.
The September Euro lost 32 points on the on total volume of 278,832 contracts. Total open interest declined by 196 contracts. As I write this on June 29, the September Euro is 2.32 cents higher on the day. Stand aside.
S&P 500 E mini:
The September S&P 500 E mini lost 3.00 points on total volume of 2,293,166 contracts. Total open interest declined by 7,474 contracts. The decline of open interest was extremely modest in relation to the volume, and it appears that old longs and shorts were being replaced by new longs and shorts, which would explain the rally that occurred in the last two hours of trading after being much lower earlier in the day. As I write this on June 29, the September S&P 500 E mini is 28.25 points higher. Although it is possible this could be the start of another rally, I am skeptical until I get a short or intermediate term buy signal, which will not occur today. Investors should be speaking with their investment advisor or broker regarding the maintenance of put protection.