Today in Commodities: The Line in the Sand

Support remains the 100 day moving average… the line in the sand. Prices traded below the moving average on crude today intra-day but it appears we’ll close back above that level; $58.98 in August. Natural gas was down by 3% today, if you’re a day trader this trade is not for you but we maintain that buying October $1 call spreads is worthy of your attention. We continue to build this position on behalf of clients.

False rally in equities could carry for a few days, stay alert. Short Euro-dollar futures or options. We were buyers of March 10′ 99.00 puts and September 10′ 98.25 puts today for clients.The Loonie is a buy if we get a close over the 20 day moving average; see commentary from this morning.

Buy December $4 corn calls with both hands. CBOT wheat was higher by almost 5% today, most likely on short covering. This move should carry prices an additional 40 cents.

Silver tested and held the 200 day moving average today… the line in the sand. Buy December $3 call spreads or get long futures with stops below the 200 day moving average. See our commentary for trade recommendations in gold.

We advised clients to fade this rally in live cattle today, stops above today’s high. Orange juice continues its march higher, are you long yet? December coffee 15 cent call spreads are a buy. Sugar is on our radar but we have yet to commit client funds.

Comments

[whidbey:]

Nice summary. I appreciate your presentations which are both readable and often great advice. Thanks.

Jul 13 04:14 PM

[TonyNed:]

USO isn't quite where I would say it's perfectly set for a reversal but I think the perfect trade for tomorrow is the $33 strike call options. You can currently buy them at 45 cents provided they open flat. Pick your entry point tomorrow morning and I think you can get out early afternoon for a nice profit. I think APA is a great play on nat gas right now. Technically it looks like much of the downward risk has been taken out. I'm long July and August call options.

Jul 13 08:33 PM

[AndrewBaker:]

Gold, natural gas (longer term) and agricultural softs/grains are what I consider to be good to be long on at the moment, so it's good to see that someone else has similar feelings (subject to specifics of course|).

Jul 14 10:45 AM

[Old Trader:]

An interesting observation, Freya....something I'd not considered before, since I've not traded/invested in soft commodities, but common sense would indicate that you're correct.


On Jul 14 11:28 AM Freya wrote:

> All of the Asian countries are dependent on Rice. That's their main
> staple. Rough Rice has been my indicator for the direction in a sustained
> grain complex move.
>
> For the past few months, R. Rice has moved within a 5-6% trading
> range. It closed at the top yesterday. Its still there today.
>
> If it goes up from here, I will consider the entire complex ready
> to move upwards again. IMHO

Jul 14 05:48 PM

[one eye:]

Old Trader, since Commodity Investments can now be made via ETFs by everyone, I like to think of them as an Investor not as a trader. But one thing I've learned is to look at the peripheral plays, Bulk Shipping for instance.

Jul 14 06:07 PM

[Northstar10000:]

Don't buy silver until September, then load the boat. Heading for 10.00

Jul 14 09:14 PM

[Mono:]

keep watching rough rice. major position. been building for a while and great play coming


On Jul 14 11:28 AM Freya wrote:

> All of the Asian countries are dependent on Rice. That's their main
> staple. Rough Rice has been my indicator for the direction in a sustained
> grain complex move.
>
> For the past few months, R. Rice has moved within a 5-6% trading
> range. It closed at the top yesterday. Its still there today.
>
> If it goes up from here, I will consider the entire complex ready
> to move upwards again. IMHO

Jul 14 10:15 PM

[harammph:]

California is going up in flames in more ways than one. This is the Third year that a drought will impact the Food chain. I've seen a forecast of as much as a $1 Billion lost.

Keep up the good work Mono. She won't listen to us. Still gets her herself bunched up inside.

Jul 15 03:08 AM

[Mono:]

how i was for so long. i was the only one getting in front of myself.

she has great ideas. GREAT IDEAS. bottom line. abrasive sometimes but the bottom line is there.


On Jul 15 03:08 AM harammph wrote:

> California is going up in flames in more ways than one. This is the
> Third year that a drought will impact the Food chain. I've seen a
> forecast of as much as a $1 Billion lost.
>
> Keep up the good work Mono. She won't listen to us. Still gets her
> herself bunched up inside.

Jul 15 08:22 AM