We’ve asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Grain Futures-- Grain futures were mixed this week in a volatile trade with soybeans higher again for the 5th straight day up 28 cents at 14.83 in early trade only then to sell off tremendously to finish lower by 24 cents for the session closing at 14.31 after hitting a new 5 month high this Friday all due to the fact that the Argentina soybean crop was reduced 5% this week down from 53 MMT all the way to 50 MMT sparking massive short covering and now the large speculators getting long this market to the upside. Last Friday soybeans for the July contract settled at 13.99 having one of its best weekly gains in quite some time while corn futures are still below their 20 & 100 day moving average in the March contract settling at 6.95 last Friday basically unchanged for the trading week in a sideways pattern with major support at the 8 month lows at 6.80 and as I’ve stated in many previous blogs I am bearish the corn and wheat market and the soybean market is extremely choppy with many false breakouts including today. Wheat futures for the March contract are trading below their 20 and 100 day moving averages settling last Friday at 7.32 at 8 month lows continuing their bearish grinding momentum and in my opinion I do believe we prices could head back down the 6.50 here in the next couple of weeks. This was a tough week for many of the commodities as fund liquidation pushed prices sharply lower, however with the reduction in the Argentina crop with funds coming back into this market because of the fact that China has been scooping up soybeans relentlessly and with a very small carryover at 125 million bushels going into spring so if there are any problems you’re going to see fireworks in my opinion to the upside in this market. The private estimate yesterday came out stated soybean crop can be as large of 3.405 billion bushels and the corn crop is estimated to be at 14.530 billion bushels if both of those come to fruition this will be a very large crop which would send prices lower in my opinion, however that is before any weather premium or any weather problems occurring because I remember last year the corn crop was estimated at 15 billion bushels and we ended up doing around 10.4 billion bushels so it is way too early to get accurate estimates but if the growing conditions are excellent those are the crop sizes to expect. TREND: LOWER IN WHEAT & CORN HIGHER IN SOYBEANS –CHART STRUCTURE: EXCELLENT
Currency Futures-- The Dollar index is having one of its strongest weeks in quite some time trading far above its 20 and 100 day moving average after settling last Friday 80.57 now currently trading at 81.58 hitting a six-month high with a triple bottom occurring in the last couple of months at 79 and now the Euro currency has now dropped over 550 points in the last 3 weeks trading far below its 20 and 100 day moving average currently trading at 1.3180 in the March contract hitting a 4 month low as problems in Europe are starting to come back as businesses are contracting for the 19th straight month. The Canadian dollar has been very weak in recent weeks trading below its 20 and 100 day moving average settling last Friday at 99.75 down for the last 5 trading days trading at 9774 hitting a 7 month low with the next major support at 9700 which might be tested next week as many of the currencies have fallen into bear markets at least here in the short term. The British Pound has been getting killed in recent weeks trading far below its 20 & 100 day moving average settling last Friday at 1.5482 and currently trading at 1.5280 down around 200 points for the week hitting a 2 year low in yesterday’s trade as investors are flocking to the U.S dollar. The Japanese Yen which I have talked about many times in previous blogs I’ve been extremely bearish, however at this point in time we are trading sideways still below its 100 day and 20 day moving average with 106 as major support stuck in a 3 week consolidation and as I’ve stated in many previous blogs consolidations have to be at least 8 weeks or more have any meaning but this does happen terrific chart structure allowing you to pick a direction and place a tight stop minimizing risk. The U.S dollar in my opinion is overextended of the upside because of the sequester on March 1st which is putting money into the U.S treasuries and dollar, however I’ve seen this story before and I do believe Congress will make a deal and then all of those gains in the dollar could be erased very quickly. TREND: LOWER –U.S DOLLAR—HIGHER CHART STRUCTURE: EXCELLENT
Precious Metal Futures--- The precious metals sold off sharply this week with gold settling last Friday at 1, 610 in the April contract now currently trading at 1,572 down over $38 for the week finishing lower 6 out of the last 7 trading sessions hitting a 9 month low with major support at 1, 540 as traders are liquidating positions and buying the S&P 500 as investors are thinking that the good times are coming back in the stock market and problems around the world are ending. Silver futures are trading far below their 20 and 100 day moving average trading down for the 5th consecutive trading session settling last Friday at 30.35 down almost $2 an ounce hitting the 6 ½ month low with major support at $27 and it just looks like a major liquidation in the precious metals and I’m not sure of the reason at this point but we might find some information out next week with possibly a major fund forced to sell or maybe a government is liquidating some holdings as well but at this point I do not understand the reason. The U.S dollar has surged higher this week against the foreign currencies and that is one reason for the selloff in the precious metals including the copper market which closed last Friday at 3.73 hitting an 8 week low today currently trading at 3.54 a pound finishing lower once again this Friday afternoon all due to the fact that China is trying slowdown the housing market which creates less demand for copper but my opinion I’ve seen China do this many times in the past and it will be forgotten about soon and the fundamentals of a growing population and a strengthening housing market will increase demand in my opinion. Platinum futures which were the one of the strongest precious metals really got hammered this week settling last Friday at 1, 710 in the April contract now currently trading at 1, 606 down nearly $110 dollars for the week and at one point was down over $140 from the high at about 1, 740 and I believe platinum at this level is a relatively good buy because I believe the selloff is overdone and I do not believe that the highs in platinum are established at this point. Palladium futures have come back really nicely from a modest selloff in the March contract currently trading at 732 after settling last week at 736 an ounce only down 400 points for the week still looking at breaking the contract highs which were hit on 2/13 at 777 and we are still about 5% from those highs ,however we did hit a 3 week low as the selling off in the other precious metals put pressure on palladium prices ,however this market remains very strong and in my opinion the fact that the automobile industry is doing extremely well which is going to keep demand strong for some of these metals. TREND: LOWER CHART STRUCTURE: EXCELLENT
Energy Futures--- The energy markets were lower across the board this week in sympathy with a sharply lower commodity market with crude oil down nearly $5.00 a barrel at 93.10 in the April contract right weekly lows with a possible double top being created at 98.50 hitting a 4 week low also pushing gasoline prices in the April contract down 600 points this week currently trading at 3.26 and what has been a remarkable run to the upside blamed on profit taking because the precious metals are sharply lower causing traders to book profits from recent gains. Heating oil futures in the April contract are currently trading at 3.10 a gallon down 1100 points for the week reversing all of the month’s gains. Unleaded gasoline has hit a record price for this time of year and in California in some places is selling for over $5 a gallon so at one point I would have to think that demand will start to slow down at these high levels and I would still be advising traders to take profits in unleaded gas and book some profits because what can happen is exactly what is happening in the precious metals sector where prices are absolutely collapsing in just a matter of days and that can absolutely happen in the energy sector as well. The U.S dollar is higher once again hitting a 6 month high as the Canadian dollar, Japanese Yen, and the British Pound continue to hit contract lows despite the fact that the Federal Reserve continues to print money. I’m advising traders to sit on the sidelines in the energy sector but at this time I would not be going short this market because if there are any problems with Iran you will see a huge spike up to the upside but it looks to me that U.S dollar is headed higher and the fact that the metals and many of the other commodities are all continuing to hit contract lows leaves the energy sector very vulnerable to a major correction in my opinion. TREND: NEUTRAL –CHART STRUCTURE: EXCELLENT
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
Cocoa Futures- Cocoa futures are currently trading at 2142 in the May contract still trading far below its 20 and 100 day moving average hitting new lows in yesterday’s trade at 2102 which was also a 9 month low as many of the soft commodities continue their bearish trends in recent weeks. The next major support for cocoa is between 1900 – 2100 and the last time prices hit that level we had a tremendous spike up due to the fact that investors came in thinking prices were too cheap at that time, however only time will tell to see if the same thing will happen this time. Many of the soft commodities including sugar, coffee, and cocoa have all hit contract lows this week while many of the other commodity sectors were also sharply lower as investors are taking money off the table. The trend in cocoa is lower so I would still suggest shorting this market because it does have excellent chart structure allowing you to place tight stops minimizing your risk in case the trend does change, however I do believe that the commodity selloff eventually is going to end and the bull markets will reappear so if you’re longer-term investor some of these prices are getting very attractive in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Sugar Futures-- Sugar futures in the May contract hit new 2 1/2 year lows earlier this week settling last Friday at 17.94 currently trading at 18.17 up 27 points in a quiet trade today still trading below its 20 day moving average which stands at 18.33 which could be broken on any given day propelling buy stops to be activated if that level is broken pushing prices higher while the 100 day moving average is still quite a distance away standing at 19.26 a pound. Sugar has been basically trading at 4 week channel between 18 – 19 looking for a break out, however with this week’s sell off among many of the commodity markets I believe sugar actually performed pretty solidly possibly looking at a bottom here in the next couple of weeks with many of the other commodity markets. The next major support sugar is around 17.50 and there still is a possibly of retesting the 2010 lows around 15.50 and in my opinion I do not believe prices will head back down to that level but you never know and the trend right now is lower but I would be looking at purchasing sugar if you’re lucky enough to get down at the 2010 level. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Orange Juice Futures-- Orange juice futures came back sharply after Tuesdays 500 point decline currently trading at 129.25 after settling last Friday at 131 still right near a 6 week high and an impressive week in my opinion due to the fact that many of the commodity markets were absolutely hammered to the downside but orange juice prices rallied and finished basically unchanged for the trading week. As I’ve talked about many previous blogs I do believe orange juice prices have bottomed at the 110 level and I think we could head back up and retest the highs of 145 in the next month or so due to the fact that demand is picking up for this product and all the fundamental bearish news such as an excellent harvest has already been digested by the market which generally does keep a lid on prices but I believe prices can move higher in the short term. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cotton Futures--- Cotton futures continue their bullish run higher trading far above their 20 and 100 day moving average in the May contract settling last Friday at 82.79 currently trading at 83.10 right near a 10 month high all due to the fact that less acreage will be planted this spring pushing prices considerably higher from the low which happened on 11 – 9 – 2012 and in my opinion I do not believe you will see prices that low for a long period of time. The USDA estimated that the 2013 acreage would be 9.8 million acres which is much larger than the NCC survey, but still well below the 12.32 planted last year which is propelling prices higher while there is a lot of demand especially from China which is also keeping prices near recent highs and with less acreage in a smaller crop prices should be relatively high the spring and summer especially if there are any weather problems in the cotton belt. Remember in the year 2010 cotton prices traded as high as 170 so prices have been cut in half from those levels so in my opinion there is still room to run to the upside especially if there are any weather problems or planting problems this spring. I like the cotton chart on a daily basis due to the fact that it has a really tight trading range allowing you to place stop losses in case you are wrong minimizing your risk if you are wrong on the trade and I do see cotton continuing its bullish grinding market here in the short term as we look forward to the next USDA report which comes out this Friday. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Coffee Futures-- Coffee futures traded higher this Friday afternoon after hitting contract lows once again this week but finishing higher after settling last Friday at 140.75 currently trading at 143.95 in the May contract with its 20 day moving average just an eyelash away at 145.50 and if that level is breached I would have to think there would be buy stops that could propel this market to the 150 level very quickly. The commodity markets were hammered this week but coffee rebounded off contract lows and actually is going to finish positive which could be a nice solid technical indicator that the lows at least in the short term might be established while allowing traders to use tight stops if they are bullish or bearish due to the fact that coffee does have outstanding chart structure and low volatility allowing you to place stops if you are short the market without risking a lot of money because you can place a tight stop. There is a large harvest coming out of Central America and Brazil looks to have a record crop, however as I’ve stated in many previous blogs we are going into the frost season and if you look back at prior years the market tends to start placing a weather premium into this market around April which is still a decent distance away but you have to think if you’re a longer-term investor in my opinion coffee prices are cheap at these levels. TREND: LOWER –CHART STRUCTURE: EXCELLENT
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor.
Michael Seery, President
Seery Futures
Twitter–@seeryfutures
Phone # (800) 615-7649
Terrific, thank you,great report