Futures Prices Continue To Push Higher

Rough Rice Futures

Rice futures in the July contract is down 10 cents this Friday afternoon in Chicago, currently trading at 13.23, wanting to break out to the upside, in my opinion.

I'm not involved, however, I will be recommending a bullish position if prices close above 13.60 while then placing the stop-loss under the February 16th low of 13.06 as the risk is around $1,200 per contract plus slippage and commission. The grain market across the board remains very strong as we are hitting multi-year highs. I think rice will start to join the party as the volatility will certainly come back, especially as we enter the summer months. Historically speaking, rice can experience tremendous price swings. The risk/reward is in your favor to take a bullish position.

I believe prices are bottoming out around the 13 level, so keep a close eye on this market as we could be home soon. Prices are trading above their 20 and 100-day moving average, telling you that the trend is to the upside. I think the downside is very limited. If you have been following my previous blogs, you understand that all of my trade recommendations are to the upside as quantitative easing should continue to push prices higher.

TREND: MIXED - HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVWERAGE

Coffee Futures

Coffee futures in the May contract broke a four-day winning streak ending lower by around 155 points at 133.15 a pound as prices hit a four-week high this week as a long-term bottom looks to have been established, in my opinion. I have been recommending a bullish position over the last month from around the 126 level. If you took that trade, continue to place the stop loss at the 106 area as an exit strategy. However, in next week's trade, I will raise the stop-loss; therefore, the monetary risk will be reduced.

Coffee prices are now trading above their 20 and 100-day moving average with the next major level of resistance between 135 / 140, and I think that will be broken in the coming days ahead. Fundamentally speaking, a decline in Brazil's coffee exports and excessive dryness in Brazil continues to support gains in coffee. Cafe on Tuesday reported that Brazil's March total coffee exports (green, roasted, and soluble) fell -1.6% y/y to 3,438,538 bags. Somar Meteorologia reported that rain last week in Minas Gerais, Brazil's largest arabica growing region, measured 4.7 mm, or only 22% of the historical average.

Coffee prices also have support from supply concerns after Citigroup said last Tuesday that arabica coffee would have a "sizable" deficit of -7.5 mln bags for the 2021/22 crop cycle. Coffee prices also have support due to dry conditions in Brazil.

I also have bullish recommendations in cotton and orange juice while watching sugar continue to climb higher. I believe sugar prices historically look very cheap, and I see no reason to short any of the soft commodities, so stay long.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Orange Juice Futures

Orange juice futures in the May contract is currently trading higher by 70 points at 114.70 as prices are right near a four-week high.

If you have been following my previous blogs, you understand that I have been recommending a bullish position from the 110 level. If you took that trade, continue to place the stop at 99 as an exit strategy as I believe a long-term bottom has taken place.

I have bullish recommendations in coffee and cotton as I think the soft commodities continue to climb higher throughout 2021 as I see no reason to be short at this time. The next major level of resistance stands around the 120 level. If that is broken, I think there could be significant room to run to the upside as the volatility remains very low despite today's nearly 3% gain. Juice prices are now trading above their 20-day but still below their 100-day moving average, which stands at the 117 level as that could be touched in the coming days ahead. I think the entire soft commodity sector will continue to march higher weekly.

TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Natural Gas Futures

Natural gas futures in the June contract is currently trading higher by 2 points or 1.50% at 2.76. If prices close at this level, I will be recommending a bullish position while then placing the stop-loss under the December 28th low of 2.41 as the risk would be around $3,300 per large contract or $800 per mini contract plus slippage and commission.

If you look at the monthly chart, it looks like natural gas prices bottomed as prices are now trading above their 20 and 100-day moving average. The trend has turned as the entire commodity sector has caught fire over the last week. If you have been following my previous blogs, you understand that I've been making a lot of counter-trend recommendations as I thought prices became too cheap.

The volatility certainly will start to increase as we enter the summer months as prices bottomed out around the 2.55 level as I still think we could trade up to the most recent high, which was hit on February 18th at the 3.08 area in the coming weeks ahead so be a buyer. Make sure when you invest in the commodity markets that you risk 2% of your account balance on any given trade as the proper money management technique.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

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Cotton Futures

Cotton futures in the May contract settled last Friday in New York at 82.40 while currently trading at 84.16, up about 175 points for the trading week, continuing its bullish momentum as prices are now trading at a three week high.

I have been recommending a bullish position over the last month or so from around the 79.00 level as this was a counter-trend recommendation. I thought prices were overdone to the downside while placing the stop loss at 66.00 as an exit strategy. I will continue to keep that stop at that level in the short term.

Cotton prices are now trading above their 20 and 100-day moving average as the trend has turned to the upside. I still believe that 95 will not be the contract high in 2021. The entire commodity sector has caught fire across the board, rallying significantly this week as there is too much money economically speaking as it has to be placed somewhere.

I also have bullish recommendations in orange juice and coffee, and I continue to talk about sugar prices being historically cheap. I think there's no reason to be short that commodity, so stay long the softs. I still think there is significant room to run for cotton prices.

TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Cocoa Futures

Cocoa futures in the July contract is trading higher for the 6th consecutive session after settling last Friday in New York at 2387 while currently trading at 2466, up about 80 points for the trading week as prices are right at a three week high.

Prices are trading above their 20-day moving average but slightly below their 100-day, which stands at the 2500 level, which could be broken in next week's trade. I think prices have finally bottomed out and look to move higher. The chart structure is solid, but I will wait for it to improve, which will take a little more time. However, I will not take a short position as I think the downside is limited. If you look at the monthly chart, the 2350 level has been held on multiple occasions, so look to be a buyer in the coming days.

The soft commodity markets continue to rally as I have many recommendations in that sector. I think cocoa will start to join the party soon as the quantitative easing that has taken place in the United States should continue to push prices higher throughout 2021. Cocoa, historically speaking, can be one of the most volatile commodities. I think that situation will come to fruition soon, so make sure you place the proper amount of contracts when you do get involved.

TREND: MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Mexican Peso Futures

The Mexican Peso in the June contract settled last Friday at 4928 while currently trading at 4990 up about 60 points for the trading week, continuing its bullish momentum as prices are right near a three-month high.

I have been recommending a bullish position over the last several weeks from around the 4955 level. If you took that trade, continue to place the stop-loss at 4575 as an exit strategy. However, the chart structure will improve next week; therefore, the monetary risk will be reduced as the stop loss will be raised significantly.

The Peso is trading above its 20 and 100-day moving average as the trend remains to the upside, with the next major level of resistance standing around the 51 area. I still think there could be significant room to run to the upside.

Oil prices continue to remain above the $60 level as the Mexican economy is based on how high or low oil prices go. That is experiencing a bullish trend with many other commodities presently. If you missed the trade, wait for some type of sell-off before entering, therefore lowering the monetary risk.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Silver Meal Futures

Silver futures in the May contract is trading higher for the 4th consecutive session, up another $0.15 at 26.11 an ounce after settling last Friday in New York at 25.25 up nearly $0.90 for the trading week as prices have now hit a four week high.

Silver is trading above its 20 and 100-day moving average as it looks like a possible double bottom may have occurred around the 24 level. I am currently not involved, and I'm kicking myself as I was originally recommending a counter-trend trade at the $24 level, but I chickened out and moved on.

I see absolutely no reason to be short silver or any commodity at present. I still think the $30 level will be breached sometime throughout 2021 as quantitative easing continues to push prices higher weekly. Volatility remains high as that situation could become more violent in the coming weeks ahead, especially as the price escalates to the upside. If you are long a futures contract, stay long.

The U.S. dollar has hit a one-month low, and I think it may have topped out in the short term. That is a fundamental bullish factor for higher silver prices as the entire sector remains bullish, especially if you look at platinum, palladium, and copper.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market allowing you to place a stop loss relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure as I like to place my stops at 10-day highs or 10-day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loss.

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
[email protected]

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. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.

One thought on “Futures Prices Continue To Push Higher

  1. To really appreciate commodities, you need a set of long term commodity charts which goes back at least 20 years before and after 1973 - when the Saudis raised the price of oil from 3 dollars a barrel to 30 dollars a barrel overnight, and cut the US off entirely!

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