Today in Commodities: Dollar Doom?

The US dollar was lower by 90 ticks today trading to its lowest level since 6/3. The story remains the dollar and yen move one way the other crosses move the opposite direction. We still like being long the Loonie. We may have reversed direction and may see higher ground in int’l currencies if dollar breaks below 79.00 in September. Short squeeze in stocks may have legs, be very careful! Treasuries collapsed, read the weekly commentary from Monday that forecasted this. Short Euro-dollars, either via put or short futures. This trade could be monumental.

Crude is higher by almost 4% today, it appears the trend is now up. $50-60.50 is the buy zone in August, expect a trade up to the 50 day at $65.40 soon. Natural gas got hit by 4% today. For all you naysayers, this is not a day trade; we are building long positions for clients expecting to see 60 cents to $1 appreciation in the next 2 months. Talk to me in late September and then say we’re wrong.

With the dollar lower and crude higher, corn still could not maintain higher levels. We advised clients to exit at even or a small loss. We will most likely try longs again very soon…stay tuned.

Gold was higher by $19, silver higher by 42 cents. We’ve been using the recent setback to gain long exposure for clients. Have you taken advantage of the most recent setback? We have clients positioned long gold and silver currently in futures and options.

If August lean hogs trade above 65.00 look for shorts to cover. Clients were stopped out of their short live cattle futures at a loss of $225/per futures today. We are out of oj, although prices were higher by an additional 5% today. On a 10-cent setback we will be buyers again for clients. Coffee gained 2 1/2 cents today, we suggest being long.

Comments

[PVizzle:]

I like your articles.

I'm short Euro/Swiss franc & short CAD/USD

I'm also extremely bullish on natural gas and oil.

I'm even more bullish on silver. Do you invest in the miners at all? I like SSRI & and I wouldn't buy the etfs.

Jul 15 08:04 PM

[chargers_ru...:]

I appreciate your contributions as always. Please keep up the good work.
I agree with you natural gas will go up by September.I also believe the "soft " dollar will contribute to renewed strength in the commodities markets.
I think they are a few aggie companies that act as a "canary in the coal mine " as far as the spx goes . I will monitor these companies watching for a possible fall correction.If we do see a major correction in the marketes in the fall I dont think natural gas will go up all that much if at all.
g/l - good trading to all.

Jul 15 08:07 PM

[Ryu Mei Co:]

On the contrary, US dollar is going to strengthen because of global recovery and demand expectation, and the commodities price may fall further due to fundamental demand/supply reason and of course strengthening of US dollar. Moreover, US dollar status as world reserve currency is unchallenged, and inflation is out of the picture in the short term. If Intel report earning is correct, then recovery is on the way, thus, US dollar is expected to strengthen in the short term.

Jul 15 08:54 PM

[Andrew Amrhein:]

Please provide a link to the Weekly Commentary about Treasuries, referred to above. Thanks.

Jul 15 10:11 PM

[zagrebzagreb:]

US Gov't sucking the lifeblood from the consumer and small business? Or don't you mean the debt we've gathered to pay for the years of incompetence?

Jul 15 11:13 PM

[Homer II:]

zabazabagerb... don't you mean the debt we are GATHERING WILL TAKE YEARS to pay due for the incompetance of THIS government?

This "administration" and "congress" will drive the US economy so deep into the ground with their utterly bankrupt policies, that it will take decades to even think about recovery. WE ARE DESTINED TO BECOME A THIRD WORLD NATION.

Jul 16 02:35 AM

[one eye:]

Doesn't matter does it? We are between a Rock and a Hard Place.

More Debt everywhere the "Eye" can see. The Media keeps shoving it onto the Front Page and more is forthcoming.

Don't you think this affects the consumer?

Jul 16 04:17 AM

[cameroni:]

Lot's of good advice but I would be cautious with the Loonie if only because Canadian trade is so dependent (85% or more) on US consumption and Oil may still be in for a rocky ride.

Without some serious consumption stateside the Loonie could still suffer and is expected to be hurt by the "delay effect" of the damaged US economy. With so many falsely concluding Canada is just a commodity currency play it is worth noting that country accounts for about one half of US trade and a significant amount of manufacturing takes place there in whole and in parts to support US industrial output. Reduced capacity in the US has a direct (though delayed) impact on production in Canada and therefore on GDP. Going long on the Loonie means being able to accept some damage to your investment as the lag-time in effects may be measured in periods greater than a year.

Just some thoughts before you hitch your star to the commodity currency of the North. Canada is about more than just oil.

Jul 16 05:56 AM

[Matthew Bra...:]

mbwealth.com/weeklycom...
Excerpt from commentary:
September 30-yr bonds gained 1’27 points last week trading to a 7 week high. Volatility has picked with wider trading ranges last week which generally happens at markets tops or bottoms. We would advise taking off all longs and expect a shift lower from here. Resistance comes in at 121’16 with support at 119’10. September 10-yr notes also gained last week, picking up 1’26.5 points. Like bonds, we expect yields to rise and prices to retreat. Resistance comes in at 119’10 with support at 117’10. Get short March 10’ Euro-dollars via futures or options. We expect last week’s high to serve as an interim top. You can buy an at-the-money put with over 8 months time currently for $600.



On Jul 15 10:11 PM Andrew Amrhein wrote:

> Please provide a link to the Weekly Commentary about Treasuries,
> referred to above. Thanks.

Jul 16 08:02 AM

[AndrewBaker:]

This is a dangerous market. I stayed in FAZ too long - we all make mistakes - because I didn't anticipate the ramping prior to results, and I'm staying put in the (forlorn maybe) hope that truth wil out before I'm squeezed out.

Gold and natural gas are my best bets for the medium term, plus agricultural grains/softs maybe on a longer term view.

Jul 16 08:15 AM

[Dave Dorgan:]

USD down makes sense. It may be the only solution left for the Tom & Ben show. If your bearish the USD and Euro, then I would assume you are bullish the yen(.?)

Jul 16 09:17 AM

[Maxe Paul:]

I will continue to be a naysayer on nat gas until proved otherwise, still bullish oil and bearish gas, nothings changed. Those who attended yesterdays nat gas party woke up with a splitting headache.

Jul 16 09:19 AM

[johnbee:]

Its fear that drives the $US up and less fear down again. That's the call.

Jul 16 10:16 AM