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-- The grain market closed higher today with November soybeans up 25 cents to finish on the highs of the trading session at 13.30 a bushel all due to a sharply weaker U.S dollar this week with planting problems as well. Corn futures for the December contract were higher by 11 cents currently trading at 5.59 a bushel after filling the gap at 5.40 yesterday which I stated I thought prices would come back down and fill that important price level but corn still remains choppy. I am bearish the new crop soybeans & corn because I do think this weather is good for crop conditions in the long run with the weather improving in the Midwest with warmer temperatures and no rain in the forecast for several days. What a difference a year makes as last year we were basically 95° almost every single day while this year is extremely wet and cold which could push prices lower in my opinion. Traders are waiting for this Wednesday’s USDA crop production report which will definitely dictate short-term price action and the next major report after that is the Planted Acreage Report which will be on June 28th which will show the final acres planted and at that point in time you’re already in late June and should have an idea of how the corn crop is performing and remember generally the highs in the grain market seasonality wise is around the July 4th & at this point I still believe there is a very good chance of that happening again. Wheat futures are still stuck in a 12 week sideways channel at 6.96 down 2 cents for the trading session still looking to develop a trend and remember the longer you consolidate when the break out does occur the more powerful the move can come. TREND: MIXED –CHART STRUCTURE: TERRIBLE
Cotton Futures--- Cotton futures are trading slightly higher this Friday afternoon still trading above their 20 and 100 day moving average after settling last Friday right near 3 month lows & as I was advising traders to be short the cotton market, however prices turned higher & rallied over 300 points this week due to the fact that the U.S dollar was sharply lower causing many commodities to rally and at this point there really is no trend in cotton so I’m advising traders to sit on the sidelines and wait for a bullish or bearish trend to develop. Some private forecaster’s came out this week raising carryover levels to extremely high levels historically, however it had no effect on prices this week as many agricultural markets have rallied due to the fact that the U.S dollar hit a 5 week low and is down over 300 points in the last 2 weeks which is a substantial move despite the fact that Europe is still a mess and China is slowing down which is hurting demand at this point in time. In my opinion I’m still bearish cotton prices but when the market goes against you must have a stop loss minimizing your monetary loss and that is exactly what happened this week ,however if prices start to break down again I would look to get short if a close under 82.00 happens. TREND: NEUTRAL –CHART STRUCTURE: EXCELLENT
Coffee Futures-- Coffee futures were down 250 points this Friday afternoon settling at 126.00 trading below their 20 and 100 day moving average as their downtrend continues hitting a fresh 3 year low basically settling unchanged for the trading week as a large crop in Brazil seems to almost be a certainty at this point in time as good weather and no frost forecast in the near future. Many of the soft commodities have been right near recent lows lately while coffee and sugar have been mirroring each other to the downside both near 3 year lows with excellent chart structure developing. Coffee prices I still believe are headed slightly lower from today’s price levels ,however if you’re a long-term investor coffee is getting very cheap especially with economies around the world improving which should improve demand for coffee after this large harvest is complete in the next couple of months in Brazil. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Cocoa Futures-- Cocoa futures rallied for the 5th consecutive trading session and I was advising traders last Friday when prices settled at 2191 to remain short this market with a stop right around 2350 and that was executed this week basically breaking even on that trade, however disappointing when you see 5 straight up days when you are short as prices have hit a 4 week high but there really is no trend at this point with the next resistance at 2437 which happened on May 3rd. I’m advising traders to sit on the sideline in the cocoa market due to the fact that the short term trend was down but now we are in no man’s land with excellent weather still proceeding in West Africa so wait for a breakout to the up or downside. The U.S dollar had a major impact on cocoa prices as tremendous dollar weakness this week pushed many commodities higher including cocoa but it will be interesting to see if the weakness in the dollar continues in the long run. TREND: MIXED –CHART STRUCTURE: EXCELLENT
Sugar Futures-- Sugar futures in New York finished quiet today down only a couple points at 16.45 a pound still trading far below its 20 and 100 day moving average with outstanding chart structure to the downside as prices continue to grind lower hitting a new 3 year low after settling last Friday at 16.55 basically unchanged with very little volatility in the past week. The 2 interesting things about sugar prices is the fact that crude oil prices continue to rally to the upside which generally lends some support to sugar also with a tremendously weak dollar in the past couple of weeks which should help support sugar prices but they continue to go lower which tells you there is a tremendous supply coming out of Brazil and it looks to me as I’ve stated in dozens of previous blogs that we are headed down to the July 2010 level of 14.50 a pound all due to the fact of excessive supplies and waning demand despite what the U.S dollar and crude oil do in the short term. TREND: LOWER –CHART STRUCTURE: EXCELLENT
Livestock Futures--- Livestock futures in Chicago are mixed today with lean hogs in the July contract trading higher for the 3rd straight trading session and I’ve talked about in many previous blogs stating a bullish position hitting another 4 month high up 40 points currently trading at 96.30 continuing its bullish momentum on the fact of increasing demand with a very bullish technical trading pattern as well. I have been bullish the lean hogs and I do think there’s a possibility that it can go as high as 100 in the next couple weeks remembering the fact that Smithfield Foods which is the largest pork producer was bought out by a Chinese firm which is increasing speculation that demand for pork will increase to China in the coming months and years. Live cattle futures for the August contract are still trading below their 20 and 100 day moving average trading down 60 points at 119.45 still in a very tight 3 week trading range and also right near the contract low which happened on May 20th at 117.82 and if you’re looking to buy this market that is where I would place my sell stop in case the trend does continue to the downside. The commodity markets generally were higher today due to the fact that the U.S dollar was absolutely hammered to the downside by 120 points lower which is a huge move which caused many of the commodity markets to shoot up and if that trend continues it will also be a positive influence in the livestock sector. Feeder cattle futures which are basically mirroring live cattle in the August contract are lower by 80 points today at 143.85 still trading below its 20 and 100 day moving average right near contract lows of 140 and like I’ve stated in previous blogs if you’re looking to get long this market I would place a stop below the contract low which is risking around $1700 per contract. I’m still sitting on the sidelines in the feeder cattle and live cattle markets but I’m still advising traders to be long the July hogs because they have excellent chart structure allowing you to place a tight stop minimizing your risk in case the trend changes. TREND: LOWER IN CATTLE—HIGHER IN HOGS –CHART STRUCTURE: EXCELLENT
Energy Futures-- The energy market rallied across the board this week as the EIA stated this week that crude supplies were down sharply this week by 6.3 million barrels compared to last week but still at a 10 year high and all-time highs for this time of year as prices are very resilient climbing about $4 from this week’s low settling near 96.00 up $1.25 for the day still stuck in a sideways pattern with no trend in sight. The U.S dollar was down sharply this week hitting a 4 week low which helped prop up energy prices in the last several days, however it is a battle between the bulls and bears due to the fact that we do have huge supplies but there’s always a premium put in the crude oil prices due to the fact of problems in the mid-East. Crude oil futures for the July contract are trading above its 20 and 100 day moving average as chart structure is starting to improve for a real breakout does not occur until we cross $98 a barrel. Heating oil futures for the July contract are right after 20 day moving average but below their 100 day moving average & still looks bearish on the daily chart in my opinion if you’re looking to get short this market I would place a stop right near 8 week high of 2.95 a gallon risking around $2,000 per contract as the heating oil contract is very large with a lot of risk. Unleaded gasoline futures which I’ve talked about in many previous blogs I still am more bullish this commodity then heating oil in crude oil and the fact that were entering demand season and the July contract is now trading above its 20 day but below its 100 day moving average at 2.87 a gallon with major support at 270 – 275 and in my opinion I don’t believe those levels will be broken here in the short term but the real breakout is about 2.90 that level is breached look for a possible retest of the $3 level. Many of the commodity markets have been choppy in recent weeks as well as the U.S dollar so there are very few trends at this point in time, however I do believe that a trend in the energy sector will develop in the next 4 to 6 weeks so sit on the sidelines and be patient because sometimes when trading commodities patience is the key as well as always managing your risk. TREND: HIGHER –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
