Today in Commodities: Like Watching Paint Dry

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 |  Includes: BAL, COW, DBA, FXC, GLD, GRU, MOO, SGG, SLV, SPY, UNG
by: Matthew Bradbard

There was no significant movement today as I found myself staring at screens waiting for something to materialize. A wise man once said, “sometimes you can make money by doing nothing.”

Trade was muted in May oil futures today; resistance just above $83 with support seen at $78.80 followed by $77.50. Natural gas pushed higher by 1.50% as of this post. We are still suggesting a light long position in May futures and purchasing 50 cent call spreads in June; the $4.25/4.75 is approximately $1700 today.

Indices are at new highs today; fresh shorts should have been stopped out at a small loss when the S&P traded above 1166.

Sugar lost 7% today, putting the total loss in the last 7 weeks near 50%. Stay away until a bottom is formed, we do not suggest picking a bottom! Cotton gained marginally on the day but as we’ve said, as long as May stays below 84.00 we are keeping clients short. OJ continues to lose ground as prices have come off just over a dime from their highs one week ago. We think there is additional downside and will keep you posted when we make a move for clients; will be closer to $1.30.

Grains were hit on reports of some drier weather in the forecast in the Mid-west. Talking to farmers who trade with us, I feel today was an overreaction and a few days of warm temperatures will not allow farmers into their fields for planting. We still like buying corn as the last few days' action has taken prices to where we view solid support; $3.70 in July and $3.85 in December. Both lean hogs and live cattle closed below their 9 day MAs. We feel both pigs and cows are a sell-rallies market. June live cattle should find their way back near 90 cents and April lean hogs under 70 cents.

We expect April gold to wander between $1115 and $1090 in the coming sessions. Our negative bias remains and we do anticipate lower action, but in case we are wrong we have chosen the sidelines. May silver closed just below the 20 day MA at $17/ounce. The trend line has been able to hold the last 2 sessions but we still expect that level to be penetrated. We see rallies capped near $17.25 with support at $16.50 followed by $15.90.

Inside day in the Loonie today…still looking for a trade closer to .9500; lower trade in metals and energies mostly likely needed to see this.

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