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Soybeans:

July soybeans advanced 2.50 cents on volume of 212,968 contracts. Total open interest declined by 446 contracts, which is dramatically below average. The May contract lost 11,227 of open interest, which means there were sufficient open interest increases in the forward months to reduce total open interest to a negligible number.

We consider the open interest action relative to price to the bullish. As this report is being compiled on April 20, July soybeans are trading 10.25 cents higher and have made a daily high of 9.83. Remarkably, July soybeans are getting close to generating a short-term buy signal, and this will occur if the daily low is above OIA’s key pivot point for April 20 of 9.83.

Soybean meal: This will be our last report on soybean meal until we announce a signal change or see a trading opportunity.

July soybean meal advanced $2.50 on volume of 78,363 contracts. Total open interest declined by 2,404 contracts, which relative to volume is approximately 10% above average. The May contract lost 7,743 of open interest. As this report is being compiled on April 20, July soybean meal is trading 3.70 higher on the day.

Soybean Oil:

July soybean oil lost 24 points on volume of 90,845 contracts. Total open interest declined by 4,235 contracts, which relative to volume is approximately 75% above average meaning that liquidation was extremely heavy on the modest decline. The May contract lost 7,642 of open interest. As this report is being compiled on April 20, July soybean oil is trading 26 points higher. On April 16, July soybean oil generated a short-term buy signal, but remains on the intermediate term sell signal. We have no recommendation.

Live cattle:

June live cattle lost the 3.00 cents daily limit on total volume of 45,516 contracts. Total open interest increased by 65 contracts. However, the April contract lost 990 of open interest, June -798, which makes the total open interest increase more impressive (bearish).

On April 13, June live cattle generated a short-term sell signal, and is getting close to generating an intermediate term sell signal.This will occur if the daily high is below OIA’s key pivot point for April 20 of 1.46020.The problem with live cattle is that there is a large contingent of speculative longs who will exert an enormous amount of selling pressure as prices continue to move lower. As this report is being compiled on April 20, June live cattle is trading 3.20 cents lower on expanded limits.Please review the April 19 Weekend Wrap on live cattle.

Cotton:

July cotton lost 1.29 cents on volume of 37,971 contracts. Total open interest declined by 4,117 contracts, which relative to volume is approximately 320% above average meaning that liquidation was extremely heavy on the decline. The May contract accounted for loss of 5,359 of open interest. As this report is being compiled on April 20, July cotton ┬áis trading 29 points lower and has made a daily high 63.79, which is 5 points above OIA’s key pivot point for April 20 the generation of a sell signal. The daily high must be below the pivot point for a sell signal to be generated. Stand aside.

WTI crude oil:

June WTI crude oil lost 79 cents on volume of 790,785 contracts. Total open interest declined by 8,215 contracts, which relative to volume is approximately 50% below average. The May contract lost 26,881 of open interest. As this report is being compiled on April 20, June W TI is trading 62 cents higher and has made a daily high of 58.63, which takes out Friday’s high of 58.34, but not the April 16 high of 58.82.

There is a fair amount of resistance at the $60 level, and during the week of December 15 through December 22, 2014 the June contract was not able to trade significantly above $60,00 and this will be the next challenge for the market. On April 7, WTI generated a short-term buy signal and an intermediate term buy signal on April 14 We have no recommendation except: Do not try to pick a top in the market

Brent crude oil:

June Brent crude oil lost 53 cents on light volume of 591,384 contracts. Total open interest increased by a massive 28,742 contracts, which relative to volume is approximately 75% above average meeting that aggressive new short-sellers were entering the market in large numbers and driving prices lower (62.95). As this report is being compiled on April 20, June Brent is trading 17 cents higher and has made a daily high of 64.40, which is below Friday’s high of 64.50 and the April 16 high of 64.95. On April 15, June Brent crude oil generated a short and intermediate term buy signal, but the performance since then has been dismal, especially compared to WTI. Do not try to pick a top in the market.

British pound: On April 17, the June British pound generated a short-term buy signal, but remains on intermediate term sell signal.

The June British pound gained 3 pips on volume of 97,437 contracts. Total open interest declined by 3,459 contracts, which relative to volume is approximately 40% above average meaning that liquidation was heavy on the fractional gain.The pound made a new high for the move at 1.5048, which is the highest print since 1.5145 made on March 18. As this report is being compiled on April 20, the June pound is trading 56 pips lower, which is to be expected after the generation of a buy signal. In the April 19 weekend report, we told clients they should expect a 1 to 3 day correction before the pound resumes its uptrend.

Australian dollar: On April 17, the June Australian dollar generated a short term buy signal, but remains on intermediate term sell signal.

The June Australian dollar lost 34 pips on volume of 103,493 contracts. Total open interest declined by 2,051 contracts, which relative to volume is approximately 20% below average. As this report is being compiled on April 20, the June Australian dollar is trading 56 pips lower, which is to be expected after the generation of a buy signal. In yesterday’s report (April 19), we cautioned that the June Australian dollar would correct from 1-3 days before resuming its uptrend.

Sugar #11: On April 17, July sugar generated a short-term buy signal, but remains on an intermediate term sell signal.

July sugar lost 13 points on volume of 131,532 contracts. Total open interest declined by 5,724 contracts, which relative to volume is approximately 70% above average meaning that liquidation was heavy on the modest decline. The May contract accounted for loss of 14,721 of open interest, which means there were sufficient open interest increases in the forward months to reduce total open interest by half of the May contract.

As this report is being compiled on April 20, July sugar has closed sharply lower, down 51 points. As clients know, after the generation of the buy signal, the market has a tendency to pull back from 1-3 days. However, the fundamentals for sugar are not very good and we recommend a stand aside posture.

Coffee:

July coffee lost 10 ticks on volume of 31,886 contracts. Total open interest declined by 4,177 contracts, which relative to volume is approximately 420% above average meaning liquidation was off the charts heavy, and this was due to the large open interest decline in the May contract of 7,658.

As this report is being compiled on April 20, July coffee is trading 40 ticks higher. The market has been going to a period of consolidation after making its low for the move on March 3 and a subsequent attempt to test that low on March 18. We think coffee will work its way higher in the weeks ahead, but it may be a slow grind due to the repair process that usually occurs after a large multi-month decline. July coffee remains on a short-term buy signal, but an intermediate-term sell signal.