Today in Commodities: Wednesday, July 1

Energies traded lower today once again. Our only exposure with clients is long natural gas via October call spreads. We will continue to hold, thinking the market will turn higher soon. It will take a close back above the 50 day moving average to turn the trend up: August at $4.06.

The US dollar was lower with all currencies benefiting. Our favorite play is long the Loonie, stops below today’s low .8576. Option play buy the September 85/90 call spread.

Get long December corn futures, stops below $3.60. We also advised clients to cut losses on their September put protection and to put in a stop-loss at $3.48 on their futures.

Gold and silver got back most of their losses from yesterday. Preferred play remains October $100 call spreads in gold and December $3 call spreads in silver.

Continue to buy November orange juice, potential hook reversal yesterday. Cotton was up the daily limit today. I guess it took a day to register that we have the smallest cotton crop since 1983. We will have some bullish plays to come.

Comments

[Larry House:]

Thanks for a good rundown. I know we have lots of corn in storage and a lot of acres planted, but from what I see here in the cornbelt where I live, there is a lot of subpar corn right now. Some fields had to be planted multiple times, and there is some corn no more than 18 inches high right now. When I was growing up, the measure of corn was "knee high by the 4th of July" if your corn was going to make. A lot of corn will not be there on the 4th. If conditions are not just right from now to September, the corn crop may not be as bumper as is expected. I think corn is a buy now.

Jul 01 04:10 PM

[icutradin:]

I believe you will find that the economy will be growing at a much better pace than you expect.

Jul 01 10:02 PM

[AndrewBaker:]

I'm with you on natural gas, corn (and other grains), and gold and silver. And the dollar will continue to suffer, so buying commodities is one way to insure against a falling dollar as well as gain from natural price appreciation.

Jul 02 08:36 AM

[jayminho:]

what i dont get is why the gold stocks dont go up..
its all clear, but all gold related stocks seem to be tanked.
anyway, i do agree with you on gold and everything :)
nice article.

Jul 02 09:55 AM

[Doomdog:]

The only thing that worries me on the nat gas is that everybody is in agreement that it has to go up. I just hope there is enough bear cases out there to offset our bullishness. Talk yesterday of "cracking the nat gas code" may be just what we need to wash out the weak players.

Jul 02 10:30 AM