August soybeans advanced 23.75 cents on volume of 338,398 and total open interest increased by 4,554 contracts, which relative to volume is approximately 45% below average. The July and August 2017 contracts lost a total of 1,803 of open interest.
Yesterday, the August contract made a high of 10.29 1/2 and this has been taken out on July 11 with another new high of 10.32 1/2, the highest print since 10.56 made the week of March 6, 2017.
As we pointed out in previous notes, the market is overbought and we recommend a stand aside posture. As an additional note of caution, do not short soybeans because the growing season is ahead and anything can happen.
September corn advanced 9.50 cents on heavy volume 626,412 contracts. Total open interest increased by a massive 27,603 contracts, which relative to volume is approximately 75% above average, which means that huge numbers of new buyers were entering the market and driving prices to a new high for the move of 4.02 1/2. On July 11 the September contract has made another new print of 4.04 3/4, which is the highest price in over one year.
As this report is being compiled, the September contract is trading slightly lower, down 2.25 cents on light volume. Similar to soybeans, we advise a stand aside posture because the market is overbought and large numbers of short-sellers remain in corn.
August natural gas advanced 6.5 cents on volume of 394,658 contracts. Total open interest declined by 11,397 contracts, which relative to volume is average. The August contract accounted for a loss of 23,087 of open interest. As this report is being compiled on July 11, the August contract is rocketing higher, up 10.7 cents or +3.65%.
The August contract is close to generating a short term buy signal and this will occur if the daily low is above OIA’s key pivot point July 11 of 3.028. As we pointed out in previous notes, natural gas tends to bottom in the July-August time frame. After August, the market begins to rally into early fall. The real action begins in winter and if temperatures are unseasonably cold, there could be some major fireworks in natural gas. For now, stand aside.
September Chicago wheat gained 15.00 cents on volume of 165,076 contracts. Total open interest declined by 484 contracts, which relative to volume is approximately 85% below average. A total open interest decline on yesterday’s advance confirms that short-sellers were powering the market higher. The July and September contracts lost a total 7,049 which means there were insufficient open interest increases in the forward months to offset the decline in these 2 delivery months. As this report is being compiled on July 11, the September contract is trading close to unchanged on the day. We recommend a stand aside posture.
Nasdaq 100 E-mini:
The September Nasdaq 100 E-mini contract gained 38.25 points on lackluster volume of 241,698 contracts. Total open interest declined by 696 contracts, a minor decline, but it confirms that short-sellers were powering the market higher, not new buying. This follows the pattern of July 7 when the September contract gained 59.00 points on low volume of 267,011 contracts and total open interest declined by 5,651, which again confirmed that short-sellers were powering the market higher.
On June 16, the September Nasdaq 100 E-mini generated a short term sell signal. As this report is being compiled on July 11, the September contract is trading unchanged on the day after make a daily high of 5717.75, which is slightly above yesterday’s print of 5711.50. We recommend a stand aside posture.