Today in Commodities: The Commodity Train Is Leaving the Station

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Includes: BALB, GAZ, GLD, JJA, JO, NIB, SLV, UUP
by: Matthew Bradbard

Natural gas is higher for the fifth day in a row, having gained 16% in that time frame. We continue to buy clients October and November $1 call spreads. We are paying approximately $2000/per and have an objective of $4000-5000/per. The question is, can you afford to be in a trade with that type or risk:reward dynamic? On a move above $4 in September $4.70 should be obtained.

We have been preaching about a US dollar rally and have been getting a lot of heat. Nothing has changed, we still expect a rally from around these levels. In my experience some of my best trades in my career have been the ones with the most controversy. With most investors thinking the dollar will go down precipitously, I feel good about the trade because most investors are wrong. Sorry, not meant to be a jab, just the sad reality.

Silver and gold were higher on the day, sit in your current position as it may be a bumpy ride but a road that should lead to higher ground.

December corn is a buy, we bought $4 calls recently and clients were buyers of $3.80 calls today for just over $500. October live cattle were lower by 125 ticks today, good for your 86 puts. Cocoa was lower by over 4%, we have clients long 2500 puts.

After a limit down day yesterday, cotton was lower by another 97 ticks today. Put in your profit limit on the October 55 put at 200 points or $1000.

Clients long coffee gave back some premium today but we still remain confident this trade will work out.