Today in Commodities: Goldman Speaks, The Market Listens

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 |  Includes: AGF, BAL, CAFE, CORN, GAZ, GLD, MOO, NIB, OIL, SGG, SLV, SOYB, UDN, UUP
by: Matthew Bradbard

Goldman Sachs remains the 800 lb. gorilla so when they adjust price forecasts the market generally reacts. $96.25/96.50 has acted as solid support in Crude for the last three sessions as prices closed back above the 9 day MA today. We suggest scaling into longs looking for a 3-5% appreciation short term. We could see Goldman raising its Crude target higher also have an immediate impact…trade accordingly. As long as the 9 day MA holds on a closing basis in July natural gas at $4.30 we remain friendly. Those fortunate enough to realize the 25-30 cent move this week were advised to book at least partial profits. The stock market has lost ground the last three sessions but it has been a slow grind lower…from here we could see 1.5-2.5% but we are approaching over sold levels on the daily charts so do not rule out a bounce. We have no long or short exposure with clients currently.

The dollar lost .25% today and appears to be making an interim top. We have advised purchasing the European currencies and our favored play at these levels is the Pound. Lean hogs lost nearly 2.5% today dragging prices to a seven month low. There will be a time to buy but NOT yet. Live cattle are staring to find some buying interest as we continue to like scaling into longs in August and December with aggressive clients. Gold continued higher today reaching a three week high…buy dips as we could be heading for a test of the highs in late April 3.7% higher. Silver bounced off the 100 day MA gaining nearly 5% today and in our opinion on its way to $39/ounce. Cocoa finished well off its high but did manage a positive trade. Clients have been advised to gain bullish exposure in September contracts. Corn and wheat were the two agriculture commodities hit the hardest today with corn off by 2% and wheat nearly 3%. Aggressive traders could gain bearish exposure in the two aforementioned commodities but we will likely be looking to be a buyer from lower levels. We like the idea of buying a 3-5% break in new crop corn. 10-yr notes, 30-yr bonds and Euro-dollars were higher today but all failed to reach new highs so clients will continue to weather this trade. They are positioned bearishly on all three and losing money across the board…stay tuned.

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