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July soybeans closed 19 3/4 cents lower on fairly light volume of 230,575 contracts. The market made a new low at $13.51, which was the lowest price for July soybeans since March 13, 2012 when soybeans reached a low of $13.38 3/4. Open interest declined by a meager 858 contracts on May 23 and open interest in the July contract declined by 1,662 contracts on volume of 124,246 contracts. Since May 17, total soybean open interest has declined by 11,431 contracts and during the same timeframe, open interest in the July contract has declined by 15,371 contracts. From May 17 through May 23, July soybeans declined by 75 1/2 cents, and the light open interest decline indicates that the market is in fairly strong hands. Another positive is that the market continues to decline on very light volume and this has been the pattern of late.
July soybean meal lost 80 cents on volume of 78,222 contracts. The market reached a new low for the move at $397.30, which was the lowest price since April 20, 2012 when meal reached a low of $395.10. July meal took out the low made on May 14 of $398.40. Volume declined from the previous day by approximately approximately 7000 contracts. Also, the range on May 23 was $9.70, which was significantly less than the range on May 22 of $15.00. Total open interest declined by 1,483 contracts and the open interest in the July contract declined by 1,416 contracts. Since May 17 through May 23 total open interest has declined by 5,893 contracts and July soybean meal has lost $22.00.
Since May 1 when the soybean and soybean meal decline began, soybeans has lost 9.50% and soybean meal has lost 6.82%. On a year-to-date basis, soybeans gained 11.04% and soybean meal gained 27.21%. The continued outperformance by soybean meal versus soybeans gives credence to my thesis that the demand for soybean meal will lead beans higher. On May 23 soybeans and soybean meal generated a short-term sell signal. Both markets remain on an intermediate term buy signal. Do not short either of these markets. Stand aside for now.
July wheat lost 20 cents on volume of 139,523 contracts. Open interest increased 5,320 contracts. The market continues to behave in a very bearish fashion despite the lofty prices. My only concern about taking a bearish position is that weather will determine the direction of wheat. This can work for you or against you, but it is not the way to trade a market. Do not enter long or short positions. Stand aside.
July corn gained 6 1/2 cents on volume of 271,314 contracts. Open interest declined by 5,860 contracts and the open interest in the July contract declined by 9,941 contracts on volume of
165,565 contracts. Relative to volume, the open interest decline in the July contract was massive and significantly greater than the total open interest decline relative to volume. The reason this is important is because a large portion of speculative open interest is in the July contract. Stand aside.
July crude oil lost $1.95 on volume of 504,334 contracts. Open interest increased by 3124 contracts. The last time crude oil declined and open interest increased was on May 15. Stand aside.
July gasoline lost 5.77 cents on very heavy volume of 200,451 contracts. Open interest declined by 4,469 contracts. The market made a new low for the move at $2.7926, which was the lowest price for July gasoline since January 3, 2012. Stand aside.
July copper closed 9.10 cents lower on volume of 77,875 contracts. Open interest increased by 1,882 contracts. The market made a new low for the move at $3.3865 which was the lowest price for copper going back to late December 2011/early January 2012. The market has collapsed on continued evidence the Chinese economy is slowing. I pointed out in yesterday’s post, that speculators should wait for a 15-20 cent rally before implementing bearish positions.
June gold closed $28.20 lower on very heavy volume of 318,805 contracts. Open interest increased on the decline by 5,975 contracts. Speak with your investment advisor or broker before embarking upon a campaign to accumulate gold at lower prices.
July silver lost 66 cents on heavier than normal volume of 64,399 contracts. Open interest increased by 458 contracts. Volume was the highest since May 16 when silver traded 66,029 contracts. Stand aside.
The June Euro closed 1.46 cents lower on extremely heavy volume of 398,939 contracts. Open interest increased by 6,541 contracts. The market penetrated the 1.2600 level and closed below it for the first time since the fourth quarter of 2010. I have been suggesting a stand aside position because one never knows what the European Central Bank may decide to do. The market is loaded with speculative shorts, which makes it vulnerable to a very sharp short covering rally in the event of a surprise out of Euroland. The next target on the downside is 1.2200. Stand aside.
S&P 500 E mini:
The June S&P 500 E mini gained 1.00 points on heavy volume of 2,570,570 contracts. Open interest increased by 39,363 contracts. Maintain long put protection.