Posts Tagged ‘commodity’

Once each week, usually on Friday evenings, we update our personal weekly commodity trading charts and review them for changes in “net long” or, “net short” holdings between the big commercial commodity traders, large speculators, and the usually uninformed public. This is our professional analysis of “the bigger picture” and current dynamics for each market which provide a spyglass view of the BIG commercial traders and what they are currently doing to influence the futures markets.

As you may already know, insider trading with stocks on Wall Street is very illegal. However, in the commodity trading industry, large/commercial traders MUST report their positions EACH WEEK to the CFTC regulatory body, hence, we monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts we’ve identified, serve to forewarn us of the next possible bigger move.

Here are the commodity markets which illustrate the bigger picture changing for them:

UP Trending Futures Markets:  Coffee (New this week.)

DOWN Trending Futures Markets:  Gold and Feeder Cattle & Sugar (New this week.)

To see “An Insider’s View of the Next Big Market Move,” find your way to http://AGFuturesTrading.com | Contact Us and fill in the form on the right-hand side. What are you waiting for…? It’s FREE!

The sugar cane production is said to be surging in the world’s largest producing country (Brazil) and second-largest exporter of sugar (Thailand).  News of this revelation has caused sugar futures to extend lows last seen in 2010.

Thailand’s gov’t agency, the Office of Cane & Sugar Board, says they are processing two more metric tons of sugar than a year ago.  In Brazil, sugar-industry group Unica reports 31.5M tons of sugar being milled during the latter part of April compared with 9.4M tons processed a year earlier!
            
“Traders remain bearish on sugar supplies, especially from Brazil, but the demand is said to be strong from North Africa and the Middle East as buyers get stocks in hand for Ramadan in July,” said Mason Ching, Automated Trading Manager, Global Futures Exchange & Trading Company in Encino, CA, regarding the current sugar futures situation.

The technical trend for sugar futures remains down, but the action at these levels have been too volatile for me to participate.  I need some significant pull-back, or a pause in volatility to get me back in sugar futures.

Wheat futures support fell out from beneath on the outlook global wheat production will be the most abundant in history for the fiscal year beginning next month.  As of yesterday’s close, wheat futures are down 10% for the year, but overall trending sideways.

Last week the USDA stated in a report global wheat harvested will amount to just over 701M metric tons – an all out record.  They also predicted the US will be the biggest wheat exporter next year.
            
“When you look at some of the production estimates coming out of the major growing regions it’s hard to come to any other conclusion than we will likely see a large wheat crop this year,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current wheat futures situation.

Wheat futures technical trend has been up since late March, but clearly trending sideways since.  I am looking for wheat futures trend to technically resume down, and then get onboard the “short” train.

Signs of increasing demand for US pork supplies have given hog futures a big boost today.  Hog futures have been choppy these past two months, and now pork prices are testing recent resistance levels.

Yesterday, USDA data reflected pork prices rising almost 1% to 90.7 cents per pound – the highest since last summer.  So far this year, pork prices are up a reported 10% as meatpackers show an increase of hogs entering slaughter by 1% than this time last year.
            
“Tighter pork supplies are expected to continue through May and into June, lending support to hog futures.  Last year’s drought caused breeding problems resulting in fewer hogs available, while demand remains strong,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current hog futures situation.

The technical trend for hog futures is up, but has been choppy over the last two months.  In order for me to enter long hog futures, I’m going to need a pull-back in price, or a lower-risk entry.  Patience is key.

I thought it best to exit soybean futures & soymeal futures MOC today, before tomorrow’s USDA crop report. Been long all week… Hogs have been a disappointment.

There will be no commodity futures commentary for the week of May 6th through 10th.  Traveling.

Once each week, usually on Friday evenings, we update our personal weekly commodity trading charts and review them for changes in “net long” or, “net short” holdings between the big commercial commodity traders, large speculators, and the usually uninformed public. This is our professional analysis of “the bigger picture” and current dynamics for each market which provide a spyglass view of the BIG commercial traders and what they are currently doing to influence the futures markets.

As you may already know, insider trading with stocks on Wall Street is very illegal. However, in the commodity trading industry, large/commercial traders MUST report their positions EACH WEEK to the CFTC regulatory body, hence, we monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts we’ve identified, serve to forewarn us of the next possible bigger move.

Here are the commodity markets which illustrate the bigger picture changing for them:

UP Trending Futures Markets:  (N/A

DOWN Trending Futures Markets:  Gold, Copper, Soy Oil & Sugar (New this week.)

To see “An Insider’s View of the Next Big Market Move,” find your way to http://AGFuturesTrading.com | Contact Us and fill in the form on the right-hand side. What are you waiting for…? It’s FREE!

Oklahoma seems to bearing the brunt of the extended winter weather.  Freezing temperatures expected tonight threaten that state’s wheat production which is already expected to be 45% less (85.5M bushels) than last year’s totals of nearly 155M bushels.

Wheat crops this year are taking a double-whammy in damage first by drought not seen since the 1930′s, and now freezing temperatures since the plants have sprouted from winter dormancy recently.  Hard-red winter varieties of wheat used to make “bread” is mostly grown in Oklahoma.
            
“The crop tours are showing signs of a damaged (wheat) crop.  The short term direction is up.  If weather gets worse, (wheat futures) may go a lot higher,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current wheat futures situation.

Normally this time of year wheat futures are in down-trends into their harvest lows in early-mid summer.  This year there is a wheat futures counter-trend “up” in progress, but I’m skeptical of it.  I need more time for a clearer picture to unfold.

There is a current outlook surfacing that US beef supplies will not be able to keep up with demand.  Cattle futures may already be responding to this view as it seems to be finding support at these levels.

The USDA has reported just yesterday that wholesale beef is the highest its been in almost seven weeks, and that domestic beef production is expected to drop 4% this year.  This is after the US cattle-herd sunk to a 61-year low at the beginning of the year – according to the USDA.
            
“Seasonable temperatures will bring about higher consumer demand for beef. Cattle supplies are well below average, and this is going to keep (beef) prices well supported as we go through the summer grilling season,” said Kevin Craney, a senior commodities broker at RJO Futures in Chicago, in a recent e-mail exchange, regarding the current cattle futures situation.  Craney added, “Look for higher (beef) prices as we get closer to summer.”

The trend for cattle futures has just turned up recently according to my work.  We are currently long cattle futures in anticipation of this new trend continuing to emerge.

Even as sugar futures finds lower lows in its down-trend, sugar futures are managing to grind out higher pull-backs just before May Sugar futures expires.  May Sugar futures had been trading at a 0.06c discount under July Sugar futures during the latter part of last week, but the discount has turned into a penny premium as of recent.

Others in the industry are claiming sugar futures to be grinding higher in sympathy with rising grain prices.  Just yesterday corn futures managed to close LIMIT UP.            

“News of strong (sugar) production potential from Unica in Brazil kept the selling pressure on (sugar futures).  Also, in my opinion, traders will remain bearish on supplies, especially from Brazil, and this has hurt New York (sugar) prices,” said Mason Ching, Automated Trading Manager, Global Futures Exchange & Trading Company in Encino, CA in a recent e-mail exchange, regarding the current sugar futures situation.  Ching added, “This is in contrast to London where (sugar) prices are holding better than those in New York for now.”

Sugar futures technical trend remains down with no “bottoming” formation yet in sight.  I’m still looking for short selling signals in this market.