Bespoke's Commodity Snapshot (3/26/09)

Below we highlight our trading range charts of ten major commodities. The green shading represents two standard deviations above and below the commodity's 50-day moving average.

Judging by the charts, the majority of commodities have formed very nice bases over the past few months. Natural gas is the only commodity that continues to make new lows within a long-term downtrend. Oil is now at overbought levels, so a short-term pullback may be due. Metals are currently in nice uptrends, with platinum the most overbought of the bunch. Orange juice is at the top end of its trading range, while wheat is currently testing its multi-month lows.

Comments

[Conan the B...:]

The Charts do seem to be basing don't they?

No big overextensions either so pullbacks will not be drastic.

Platinum? why not Copper as well.

Mar 27 01:48 AM

[MarkitWacha:]

What these charts don't tell us is that we're close to the producer's cost on many of these commodities. That's providing the base. Producer's can't and won't offer their product at a loss. They'll stop producing first. For instance, the average cost to produce a barrel of oil is about $35. The cost to produce natural gas is about $4.

Barring deflation, there is only one direction for many of these to go--up. Gold / platinum / precious metals don't apply to this theory.


long: GSG, and applying leverage

Mar 28 01:15 PM

[logicalman:]

producers will at times sell at a loss...this is especially true when they need CASH for many reasons....of course they will not do this for long for obvious reasons..even if we are right on the direction,the wrong timing can cause a lot of pain!!!


On Mar 28 01:15 PM MarkitWacha wrote:

> What these charts don't tell us is that we're close to the producer's
> cost on many of these commodities. That's providing the base. Producer's
> can't and won't offer their product at a loss. They'll stop producing
> first. For instance, the average cost to produce a barrel of oil
> is about $35. The cost to produce natural gas is about $4.
>
> Barring deflation, there is only one direction for many of these
> to go--up. Gold / platinum / precious metals don't apply to this
> theory.
>
>
> long: GSG, and applying leverage

Mar 29 01:24 PM

[Rohan C. Pease:]

Wow platinum looks like a strong chart, so does copper. Base metals should break out, I would look at PCU around $15, 200MA is at $19, should break out to $22.75 after a close above $19. Also PCU has lagged FCX during the copper rally of 2009.

Mar 30 03:45 PM