Today in Commodities: Quarterly Window Dressing

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 |  Includes: COW, DBA, ERO, GRU, JO, JYN, MOO, OIL, SGG, TLO, UDN, USO
by: Matthew Bradbard

2009 is 3/4 over -- how is your performance? You’ve had to pick your points in commodities, but for the most part wheat, coffee, OJ, commodity, futures, art, being long currencies against the US dollar and long metals have been the plays.

We’ve had success as well in the softs, i.e. sugar, OJ, and coffee. We feel the big swing today is window dressing with fund managers picking winners so they show exposure in the 3rd quarter… maybe we're wrong and it is just the fundamentals finally kicking in??

Oil was higher by 5% today on good volumes. We are positioned long with clients looking for $74 and perhaps $76 on this leg. Call spreads in March coffee and January OJ we feel are buys. Sugar is very impressive, we will look to get re-positioned long with clients again on intra-day setbacks.

The stock market action was peculiar, we still like being short as long as 1075 in the S&P and 9800 are not penetrated on rallies. We advised clients to take a smaller profit on their long in 30-yr bonds.

Impressive close in the grains, buying wheat, corn, or soybeans on setbacks is okay with me. There is no need to be in all as they tend to move together.

Gold and silver were higher and we are short silver with clients and on the sidelines in gold. We maintain that prices should move lower and will refrain from being sucked long with clients for now. If we change our minds we will tell you and cut losses on silver shorts.

A complete reversal in live cattle formed a bullish engulfing candle. McVean was a big buyer of calls as well as JP Morgan, we hear. Trust me, cattle traders want to be on the same side as MCVean (google him/ Charlie McVean). We are advising outright calls in December and February.

The US dollar leaked today, let's wait til’ tomorrow before taking any action. We remain short Euro-currency and long yen for clients, though on a trade near 113 in the yen we would advise booking profits.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.