Today in Commodities: G8 Impact?

Could the sell-off in the dollar and the ensuing rally in commodities today be attributed to the G-8? The dollar and yen were lower as all other currencies rallied, perhaps the fear trade? So many questions; let's try to get some answers.

Treasuries were lower, you know the deal by now…short Euro-dollars.

Crude oil was marginally higher as it appears the 100 day moving average at $58.67 should act as support, at least for now. We remain content on the sidelines with clients. Natural gas remains on our hit list as we still like the October $1 call spreads.

We’re advising clients to buy December corn, we feel the market has priced in ideal growing conditions and feel that is not likely. Too hot, too wet, too cold, who knows, but not ideal! November soybeans may have bottomed as they were higher by 2.5% today. We will be exploring ways to get clients long… stay tuned.

Silver and gold were positive today, let's try this again… as long as prices stay above yesterday's lows, stay long. On August gold $904.80, and on September silver $12.74. Talking to traders the 200 day moving averages may come into play so do not rush to get long. The 200 day averages are at $883 and $12.45 respectively.

Clients were filled on October live cattle put spreads today. Who said lean hogs would trade higher?…we did. Are you long? Some of our clients are.

Orange juice got back what it lost yesterday. On a new high we will be advising clients to lighten up. Coffee is a buy - if you aren’t interested in trading, perhaps help with demand; I hear McDonald's (MCD) new coffee is good.

Comments

[TonyNed:]

I went long Nat Gas via Apache (APA) this morning. Technically it has been oversold in terms of stochastics and yesterday it went oversold on the RSI. I believe that currently there is much more upside potential than downside which in my opinion is extremely minimal.

I like to use PBR as a vehicle for trading oil and right now it's at a grey area technically meaning there looks like an equal possibility up versus down. The RSI reads bearishly and the stochastics read that any bounce will only mean there is further to fall before a meaningful rally in PBR will be underway. I moved out of my short position very luckily at the bottom yesterday morning. PBR was up today but it doesn't mean that it's bouncing yet. I'm just sitting by and waiting on this one.

Jul 09 09:02 PM

[AndrewBaker:]

Natural gas has a lot going for it as it is in abundant supply, including plenty in the US, is being used much more in new buildings, can fuel cars, has a 1:6 energy ratio to oil where the price differential is around 1:20, is considered a green fuel and therefore politically very popular, and the downside on price is far more limited than the upside potential.

Go long now, and hold. IMHO the rewards will come and be very worthwhile.

Disclosure: I'm long natural gas.

Jul 10 08:19 AM

[Maxe Paul:]

The preachings of a devout bottom picker. Amen!


On Jul 10 08:19 AM AndrewBaker wrote:

> Natural gas has a lot going for it as it is in abundant supply, including
> plenty in the US, is being used much more in new buildings, can fuel
> cars, has a 1:6 energy ratio to oil where the price differential
> is around 1:20, is considered a green fuel and therefore politically
> very popular, and the downside on price is far more limited than
> the upside potential.
>
> Go long now, and hold. IMHO the rewards will come and be very worthwhile.
>
>
> Disclosure: I'm long natural gas.

Jul 10 10:53 AM