I am sorry for a slight delay with my next post but all I meant to say with my silence was that my portfolio remained intact. OK, below are my thoughts as to what is left of October and November.
KC - as I mentioned many times before I was short coffee and this position took a serious hit after rains got delayed by 2-3 weeks in Brazil main coffee areas. However delayed does not mean cancelled. Today when coffee prices hover between 2.10 - 2.20 per pound I see it as a good opportunity to place short bets as rains will begin in a few days. Anyway, my short December calls have strike prices of 2.10 and 2.25 so even a slight delay will make me a winner. But in general I was indeed wrong expecting price declines into 1.60 area. I guess this price levels are not achievable in short to medium terms unless weather improves drastically. I plan to keep this short position open until options expiration in mid of November and will reevaluate the market then.
CC - another rollercoaster market. Supply and demand factors are being pressed by fear and panic of Ebola. I will remain bearish until expiration of my December calls in 3 weeks and reevaluate the situation then. So far I see more downward bias unless Ebola spreads into Ivory Coast and Ghana which has not happened yet and I hope this won't happen.
SB - sugar market is a question mark at the moment. I have had bearish bets on it since middle of August and I closed almost all of them. Now I am cautiously bearish - harvesting in Brazil is approaching the end and next step will be to see the development of next year's crop. We are approaching crossroads.
NG - I had a options strangle on natgas since mid-August and now I am bearish it again. Injections are quite healthy. Weather is supportive. We may see 3.60 in December futures within coming weeks.
C - insight of record crop corn is definitely in sell-mode. Market tried to reboot last days but I think it is a bull trap and we are yet to reach new lows as harvesting will continue in November. Export sales are healthy but far from striking levels and this makes me think that buyers expect better bargains.
HE - lean hogs tried to restart bull rally but that did not happen. I've been bearish hogs and I think I will add to this position.
S, SM, BO - I am still bearish on soy but I do not want to engage into selling of S directly. I'd rather be shorting SM and BO as they have not taken so much damage as S did.
CL, HO, RB - I was away from this trade for quite a while after I closed HO bullish bet. At that time I expected seasonal appreciation which did not happen because of political reasons. Now I believe that political pressure on oil will persist as States and Saudis want to punish Islamic State and Russia for their clumsy attempts to change World picture. I thought of 1980s scenario to happen again when oil dropped from 40 to 7 dollars and I think we are heading that direction. WTI lost 20+ dollars and I do not think this is a bottom - States and Saudis came very well prepared and IS and Russia are not. This could be an easy win for them if they drop the prices to low 70s or even under 70s. Among all the oil products to short I favor RB the most as demand for gasoline is not strong during winter.
This year I've given mostly sell recommendations and I am pleased to see that I've been right. Humphrey B. Neill said in his Letters of Contrary Opinion "Don't confuse brains with a bull market". I am glad to see I passed this first exam. Dow Jones Commodity Index lost 9% year to date, Goldman Sachs Commodity Index lost 13%. I do not want to disclose my results before the year end but I gained year to date.