Archive for the ‘Uncategorized’ Category

Sugar Futures Expert Expects No Quick Recovery

Sugar futures were hit with a glut following multi-year highs in 2011 and has since given back two-thirds from its high prices, but one expert says sugar prices may recover in the 2016-17 season. Sugar futures are down 12 points from yesterday’s close closing the day near 10.61 cents per pound at the Intercontinental Exchange.

The top sugar producing and exporting countries (such as India & Thailand) actually subsidize sugar growers and this fact could keep a lid on higher prices short-term – says the CEO of a Brazilian sugar company. He goes on to say that investment has been rather low in cash-strapped sugar mills and this fact alone could see lower volumes of sugar production which will support values to the product.

The technical trend for sugar is down with no bottom yet in sight. Pretty soon holiday demand for sugar should pick-up, but I don’t see any fundamental issues that would change the overall trend happening any time soon – enjoy the low consumer prices while we can.

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Soybean Futures Seasonal Trend Can Change With Planting Schedule

Soybean futures usually follow corn in planting each season, but a Midwestern field agronomist is touting a change in this long held view in an effort to produce higher yields than customary. Soybean futures are up .11 cents today, currently trading just above $9.53 per bushel at the Chicago Board of Trade.

The challenges to planting soybeans earlier than normal include labor logistics and equipment modifications, however an expert says certain key factors in understanding better results for plant “canopy closure” will provide soybean farmers better yields. She says for this to happen there must be an “increase in soybean nodes and pods per plant” which brings us back to the need for farmers to better understand canopy closure in their fields.

The trend for soybean futures is down and a relief rally appears to be emerging at this time. Soybean futures 18-day moving average is about .25 cents higher, so there may be higher prices near-term.

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Rally Extended for Corn & Wheat Futures

Both corn futures and wheat futures have extended their gains from Monday’s & Tuesday’s sharp rallies on the outlook of crop conditions in the Midwest. Corn futures are making new highs currently trading at $3.8425 per bushel, and wheat futures are near their highs at $5.3325 per bushel at the Chicago Board of Trade.

The pace of the winter-wheat harvest has traders concerned because, according to the USDA, only 19% of the crop was harvested as of Sunday – 31% is the five-year average for this time of year. With corn, the USDA has down-graded its crop-rating to 71% (from 73% a week earlier) with a good to excellent condition.

Corn & wheat futures trend is technically down at this time, but more “sideways” for at least the past two months. The corn futures & wheat markets must be traded with caution until a clearer trend picture unfolds.

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Natural Gas Futures Hover at Two-Week Lows

Natural gas futures are trading at this month’s mid-range and at two-week lows as trader’s eyes seem to be focused on short-term domestic weather in order to estimate demand for the fuel. Natural gas futures are down slightly today currently trading at $2.75 per BTU at New York’s Mercantile Exchange.

It might not only be weather concerning the natural gas trade, but speculation that power and utility plants may switch from clean coal to clean natural gas because of such low prices. Most consumers may not be aware that natural gas is used in about 25% of domestic electricity generation.

The trend for natural gas futures remains down with possible bottoming taking place. A sustained natural gas futures breakout about last month’s high near $3.20 per BTU could have this market in an uptrend – but low prices are great for the end-users.

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Two-Week High Can’t Hold for Copper Futures

Copper futures reacted to Chinese economic market data by selling-off after mostly in-line with market expectations after reaching a two-week high only yesterday. Copper futures settled down just over .70 cents today at $2.673 per pound at New York’s Commodity Exchange.

The Chinese government data revealed their industrial production rising by a rate of 6.1% (annualized) last month – just above a 6% increase, and following a 5.9% gain in April. This information comes after it has been learned that China’s economy grew at the slowest pace in six years in the first quarter.

Copper futures newly emerged down-trend has broke down to lower lows not seen since March & April. Next level of support comes in at the $2.56 level.

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Cattle Futures Just Off Highs of the Year

Feeder cattle futures have been hovering at these levels for the better part of this month, but are having difficulty following through above $2.20 per pound let alone come close to challenging last year’s highs. The August feeder cattle contract closed down 120 points at $2.17 per pound at the Chicago Mercantile Exchange.

Feeder cattle “asking” prices have been reported to range nearly $100 per hundred-weight depending on what part of the country you’re in, but at the CME they have only been fluctuating between $2-$3 dollars in the past five weeks. Cattle futures may have picked up in the number of slaughtered animals this week, but is still well behind the pace of this time last year.

The trend in cattle futures is up, albeit with little follow-through on higher highs three times this month. The cattle futures market has been teetering back and forth for the past two months and I’m sidelined from this market until a clearer picture emerges.

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Plantings Nearly Complete and Emerging Weigh on Wheat Futures

Wheat futures are testing last weeks lows one day after the release of the USDA crop production report and earlier reports of domestic spring wheat planting near completion. Wheat futures are currently down .08 cents today near $4.725 cents per bushel at the Chicago Board of Trade.

A total of six states where 99% of the 2014 spring wheat crop domestic crop was planted are now reporting near completion and well above their five-year average for plantings. The five-year average of 51% of the spring wheat crop planted is being surpassed and currently at “87%” as of May 10th reporting.

The trend for wheat futures continues to be down with the market currently testing the May 5th low. With no bullish news in sight, it will be interesting to see how wheat negotiates heavy support .12 cents lower.

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Natural Gas Futures Finding Support with Less Supply in Storage

Natural gas futures found support during trading Thursday when data showed domestic natural gas supplies falling more than expected last week. Natural gas futures for May delivery ended the day at $2.69 per BTU, up 94 points at the New York Mercantile Exchange.

In the week ending March 27th, the US Energy Information Administration reported natural gas in domestic storage declined by 18B cubic feet – when only a decline of 10B was “expected.” In the week prior it was reported a 12B cubic foot rise, and a year earlier at this time supplies fell by 71B cubic feet.

Natural gas futures trend is down with no clear bottom yet in sight. This report is not necessarily for natural gas futures traders, but users of the product in our everyday lives – great news here for the consumer!

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Natural Gas Futures Hovering Above Contract Low

Natural gas futures have been testing its three week low as the time window for demand ticks away. Investors and traders alike are patiently monitoring near-term weather forecasts to gauge the strength of demand for natural gas.

Natural gas futures reached a low earlier today of $2.649 per million British thermal units at New York’s Mercantile Exchange – a price not seen since making contract lows nearly three weeks ago. Speculators on the bearish side have the outlook that warmer weather in most of the country will keep a lid on later-winter demand. Peak season for domestic natural gas use is between November through March.

Natural gas futures trend is down, but at a crossroads. A natural gas futures breakout above $3.05 could bring prices back to the $3.40 range, while a break below $2.59 with follow-through could send it to uncharted territory (in my study).

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Grain Futures Find Multi-Month Support at Bargain Prices

Corn futures, soybean futures, and wheat futures have all found temporary support after rallying anywhere between .15c-.40c in today’s session at Chicago’s Board of Trade. Importers around the world had been on the sidelines as US grain supplies had been viewed as overpriced with a climbing dollar, but that all changed today.

The US grain markets were at four-month lows within the last two trading sessions – wheat futures finding lows not seen since early October, corn futures retracing back to November lows, and soybean futures also rallying from lows not seen since October. With soybeans, reported weakening demand from China, and ample South American supplies, have been a black cloud over the soybean market since late last year.

All grain futures trends are down with no bottom yet in sight. I am looking to sell short these grain markets, especially once they make a return back to their moving average I follow.

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