Commodity Report
Grain Futures--- The grain futures this week were absolutely crushed this afternoon in Chicago with wheat down 30 cents in the July contract in a hectic trade right at the closing bell to settle right around 6.13 a bushel pushing July corn sharply lower as well closing down around 17 cents at 6.10 a bushel continuing an incredibly frustrating choppy market in the last couple of months. Soybean futures hit contract highs earlier the trading session in the July contract trading as high as 15.12 a bushel up around $.12 cents before plummeting in sympathy with the rest the grain markets to close around $.22 cents lower at 14.81 a bushel possibly forming a key reversal in price. As I've said in many blogs before corn and wheat have no bullish fundamental news behind them with record plantings and solid carryover levels and basically only rally when soybeans or soybean meal rally but when they selloff the wheat and corn get crushed just like what happened today. I am not convinced that soybean prices have topped out at this point because most commodity markets were lower across the board today so it does not surprise me that there was profit taking especially when the rest of the sector was absolutely hammered. Rough Rice futures finished lower for the fifth consecutive trading day down another $.15 to close around 14.65 in the July contract also falling in sympathy with the rest the grain markets. Soybean meal for the July contract which has hit contract highs basically every day for the last five trading sessions sold off on profit taking finishing down about 700 points to close at 429 a ton and still remains in a sharp uptrend
Energy Futures--- Energy futures this afternoon in New York traded lower throughout the trading session with crude oil closing down 80 cents to close around 105.37 a barrel while unleaded gasoline hit a 13 week low today closing down 150 points to settle at 3.08 a gallon and traded as low as 3.06 a gallon earlier the trading session on fears of lack of demand and oversupply coming into the market before the summer demand season. Unleaded gasoline prices may have gone up too quickly to fast in early spring due to tensions in the Middle East as well as renewed optimism of world economies producing growth and demand, however that is just not been the case and demand is quite low at this point and prices are still extremely high for the consumer. Heating oil futures for the June contract finished down 320 points to close around 3.1452 a gallon still stuck in a three-week sideways channel while natural gas futures woke up to reality today finishing down 12 points to close at 2.25 wiping out some of the gains posted earlier in the week. The only trend in the energy sector at this point is unleaded gasoline to the downside and you can still say the natural gas trend is still lower and that this was just a kickback in price, however both of those markets look like they're trending lower at least in the short term while heating oil in crude oil basically are just bouncing around in a sideways choppy pattern which I advise to avoid until it trend has developed.
Orange Juice Futures-- Orange juice futures this week traded as high as 148.00 on Monday morning only to continue a tremendous bear market down to 130.30 finishing lower by 250 points once again this afternoon in New York creating a fresh two year low with the next support all the way down the 120 €" to 125 which could happen in the next couple of days. The weekly ranges in orange juice futures have been very wide but it's always to the downside and has been pretty simple if you have been short this market because the down days are very powerful and the up days have been small gains and that is a sign of a giant bear market. Remember 2009 in February prices backed down to the 70.00 which was the low at the time and I don't believe we will head that low but at this time prices are in such a slide that it is very difficult to become bullish at these levels. An old expression in the commodity markets is you never want to catch a falling knife basically it states that picking a bottom is very dangerous especially when the commodity is in a free fall in prices such as orange juices with no chart structure at all.
Meat Futures--- The cattle markets this week continue to slide lower with the June live cattle finishing down 100 points once again right near contract lows of 112.5 in active trade in Chicago while feeder cattle for the August contract actually finished unchanged due to the fact that corn prices plummeted nearly $.20 a bushel which is supportive of feeder cattle prices which is the herd that you see on the farms which is effected because the cost to feed the animal rises so the farmers send the herd to slaughter sending prices lower. Lean hogs futures continue their unbelievable bearish trend finishing down another 155 points closing at a fresh contract low once again at 84.30 a pound and like I've been stated in previous blogs $.84 a pound is still a very high price for hogs historically speaking so prices could fall substantially further even from these so-called low levels. The commodity markets as a whole were all sharply lower today so it does not surprise me that the meats which have been in a big bear market continue to fall as traders are shaking their heads really wondering how low the price can actually go during the summer months. The trend is your friend in commodities and the strong bear trends in the meats look to me that they will continue to head lower at least in the short term remembering the fact that you don't know how high a commodity can actually go or how low prices can go before it bottoms or tops out.
Cocoa Futures-- Cocoa futures this morning bucked the trend closing higher by nearly 20 points to close at 2340 with an incredibly crazy trading week with Monday and Tuesday's trading session having 150 point ranges due to unrest in the Ivory Coast growing regions. Cocoa started the week at 2309 and traded as low as 2144 before rallying sharply off those lows on 2 separate days to close right near the higher end of the recent trading range 2340. I really do not have an opinion about Cocoa prices at this time however the soft commodity markets are very bearish and have been in tremendous bear markets in the last six months or so and I still have to believe that Cocoa prices will probably catch up and start heading lower with the rest of the soft commodities such as orange juice, coffee, sugar, and cotton
Cotton Futures€"Cotton futures started the week in the December contract at 87.90 a bale and has traded as low as 85.40 a bale in a pretty lack luster trading week basically grinding lower in price almost on a daily basis. Cotton futures this morning continued their bearish trend closing down around 70 points in the December contract which is considered the new crop which we harvested this fall settling right near 86.20 which is a closing contract low also marking four month lows. As I've stated in previous blogs the soft commodities on a big bear market is very difficult to see any substantial rally in the coming weeks however summer months are ahead and we have been unusually warm and dry throughout many parts of the United States and if a weather market does develop such as drought prices will turn on a dime and go up quickly. I do believe that cotton price declines at these levels are limited and I don't see a whole lot more downside, however I do see 80 cents as a possibility in the coming weeks but I think you're starting to squeeze blood out of turnip at these levels
Sugar Futures-- Sugar futures for the July contract this week have plummeted hitting a 1 year low today finishing down another 42 points to close at 20.53 a pound and had traded as high as 21.21 on Monday morning but prices continue to grind lower and it was one year ago today in early 2011 when sugar prices hit a low of 20.40 and if we break that level you are looking to go down into 18 €" 19 range in sugar prices pretty quickly in my opinion. The softs commodities have been in bear markets with sugar, cot
Energy Futures--- Energy futures this afternoon in New York traded lower throughout the trading session with crude oil closing down 80 cents to close around 105.37 a barrel while unleaded gasoline hit a 13 week low today closing down 150 points to settle at 3.08 a gallon and traded as low as 3.06 a gallon earlier the trading session on fears of lack of demand and oversupply coming into the market before the summer demand season. Unleaded gasoline prices may have gone up too quickly to fast in early spring due to tensions in the Middle East as well as renewed optimism of world economies producing growth and demand, however that is just not been the case and demand is quite low at this point and prices are still extremely high for the consumer. Heating oil futures for the June contract finished down 320 points to close around 3.1452 a gallon still stuck in a three-week sideways channel while natural gas futures woke up to reality today finishing down 12 points to close at 2.25 wiping out some of the gains posted earlier in the week. The only trend in the energy sector at this point is unleaded gasoline to the downside and you can still say the natural gas trend is still lower and that this was just a kickback in price, however both of those markets look like they're trending lower at least in the short term while heating oil in crude oil basically are just bouncing around in a sideways choppy pattern which I advise to avoid until it trend has developed.
Orange Juice Futures-- Orange juice futures this week traded as high as 148.00 on Monday morning only to continue a tremendous bear market down to 130.30 finishing lower by 250 points once again this afternoon in New York creating a fresh two year low with the next support all the way down the 120 €" to 125 which could happen in the next couple of days. The weekly ranges in orange juice futures have been very wide but it's always to the downside and has been pretty simple if you have been short this market because the down days are very powerful and the up days have been small gains and that is a sign of a giant bear market. Remember 2009 in February prices backed down to the 70.00 which was the low at the time and I don't believe we will head that low but at this time prices are in such a slide that it is very difficult to become bullish at these levels. An old expression in the commodity markets is you never want to catch a falling knife basically it states that picking a bottom is very dangerous especially when the commodity is in a free fall in prices such as orange juices with no chart structure at all.
Meat Futures--- The cattle markets this week continue to slide lower with the June live cattle finishing down 100 points once again right near contract lows of 112.5 in active trade in Chicago while feeder cattle for the August contract actually finished unchanged due to the fact that corn prices plummeted nearly $.20 a bushel which is supportive of feeder cattle prices which is the herd that you see on the farms which is effected because the cost to feed the animal rises so the farmers send the herd to slaughter sending prices lower. Lean hogs futures continue their unbelievable bearish trend finishing down another 155 points closing at a fresh contract low once again at 84.30 a pound and like I've been stated in previous blogs $.84 a pound is still a very high price for hogs historically speaking so prices could fall substantially further even from these so-called low levels. The commodity markets as a whole were all sharply lower today so it does not surprise me that the meats which have been in a big bear market continue to fall as traders are shaking their heads really wondering how low the price can actually go during the summer months. The trend is your friend in commodities and the strong bear trends in the meats look to me that they will continue to head lower at least in the short term remembering the fact that you don't know how high a commodity can actually go or how low prices can go before it bottoms or tops out.
Cocoa Futures-- Cocoa futures this morning bucked the trend closing higher by nearly 20 points to close at 2340 with an incredibly crazy trading week with Monday and Tuesday's trading session having 150 point ranges due to unrest in the Ivory Coast growing regions. Cocoa started the week at 2309 and traded as low as 2144 before rallying sharply off those lows on 2 separate days to close right near the higher end of the recent trading range 2340. I really do not have an opinion about Cocoa prices at this time however the soft commodity markets are very bearish and have been in tremendous bear markets in the last six months or so and I still have to believe that Cocoa prices will probably catch up and start heading lower with the rest of the soft commodities such as orange juice, coffee, sugar, and cotton
Cotton Futures€"Cotton futures started the week in the December contract at 87.90 a bale and has traded as low as 85.40 a bale in a pretty lack luster trading week basically grinding lower in price almost on a daily basis. Cotton futures this morning continued their bearish trend closing down around 70 points in the December contract which is considered the new crop which we harvested this fall settling right near 86.20 which is a closing contract low also marking four month lows. As I've stated in previous blogs the soft commodities on a big bear market is very difficult to see any substantial rally in the coming weeks however summer months are ahead and we have been unusually warm and dry throughout many parts of the United States and if a weather market does develop such as drought prices will turn on a dime and go up quickly. I do believe that cotton price declines at these levels are limited and I don't see a whole lot more downside, however I do see 80 cents as a possibility in the coming weeks but I think you're starting to squeeze blood out of turnip at these levels
Sugar Futures-- Sugar futures for the July contract this week have plummeted hitting a 1 year low today finishing down another 42 points to close at 20.53 a pound and had traded as high as 21.21 on Monday morning but prices continue to grind lower and it was one year ago today in early 2011 when sugar prices hit a low of 20.40 and if we break that level you are looking to go down into 18 €" 19 range in sugar prices pretty quickly in my opinion. The softs commodities have been in bear markets with sugar, cot
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