Today in Commodities: Gearing Up for NFP

Oil is still trying to making up its mind on where to go. We have no opinion or positions currently but will most likely have suggestions in the coming weeks. Natural gas looks to close at slightly better levels, we still like 75 cent January call spreads.

Fresh short entries in cocoa enjoyed sliding prices but unfortunately for December puts, too little too late. Sugar gave up 3.5% today; we bought yesterday for clients…not the best timing. We continue to think March will return to 25/26 cents. The trend line all year comes in around 22 cents, if this level gives way we may re-evaluate.

Whether I agree or not, stocks appear to be moving higher. We will explore selling from higher levels with clients. My gut tells me metals are due for a correction, that being said we exited clients' gold longs at a marginal profit today. We will stay with the silver as both metals should move in the same direction. On a correction we will buy back into gold, on a move higher we still are long silver.

A break in the clouds in the mid-west and grains were hit today. It is too bad we just missed our profit objective in corn and will now ride the position down. We think this leg lower will be short lived so recommend staying long. Soybeans were down almost 3% today, there could be another 40-60 cents in this leg. Live cattle were mixed today; continue to accumulate longs in February.

The entire Treasury complex moved higher today, we are bleeding a bit in the NOB spreads and short Euro-dollars but we will stay the course. The ECB and BoE kept rates at current levels; ECB at 1.0% and BoE at 0.50%. As previously stated we will be looking for short opportunities in the Cable and Euro.

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

Comments

[TonyNed:]

Oil is headed higher. I think we may have another few sessions of consolidation but the momentum is on the bottom half of the downward range with an imminent reversal upwards.

Nov 05 04:54 PM

[rick12345:]

Nice move on gold. As I keep telling people, take your profit while it's there and don't be so bloody greedy. Euro is at a pivotal point. If it breaks $1.49/$1.50 then it could well test previous records, however if the US economy continues to strengthen then a flight back into greenbacks is distinct possibility.
Copper is the one to watch in my view. If commodities decouple themselves from the USD then a breakout is possible. Watch the gold and silver price for signs of this.

Nov 05 06:33 PM

[Value Added:]

I agree with your long position on corn, and I think soybeans are also a good long, based on current harvest expectations. As for gold, who knows? If a few other central banks follow India's lead, it may move much higher, but that is conjecture.

Nov 06 08:41 AM