In September I am interested in following commodities:
Wheat - overall I am bearish but there is one wildcard called Russia. Should they introduce export ban (which they ruled out yesterday again) the situation will change. Generally speaking the market factored into the price all the bad news already. The only uncertainty is related with Russia. I will be doing what I did last month - buying dips and selling rallies. But this time I am more bearish than a month ago.
Corn - same.
Soybeans - I continue holding short position. I still believe that the worst is over or nearly over, COT and history supports me. But there is lots of uncertainty related with China - today I read the news that they would be selling state reserves of beans, tomorrow they say that crops in Northern China are good and the day after they buy another huge lot from the US disregarding high prices. What's the reality?
Soybean Meal - same as S. Watching and waiting to go short.
Cocoa - all signals tell me to prepare for shorts. But latest rally keeps me hesitant. The crop in Ivory Coast is plentiful but the weather is humid and not sunny. This may cause black pod fungus disease. This is one way of thinking. Another story tells us that during coming weeks main crop needs rains to develop well. And there are rains nearly all the time. Which one is correct? I do not know. I need to watch market closer. Politically, I believe the situation is relatively calm but market tends to overreact when occasional outbreaks of violence take place. Country is filled with weaponry of all kinds and population is poor - no wonder there are gunshots here and there. But this is not a civil war.
Heating Oil - July-August rally was nice but we are in September. Turnaround may be just around the corner. Watching and waiting.
Coffee - it looks like market is testing highs and we may see rally any moment. I hold long position already I will not extend it anymore, exposure is at proper level no need to be greedy and overextend.
Lumber - I want to short LB again but first I want to see a bounce above $290.
Natural Gas - needless to say I am bullish. Rig count is 473 today compare to 505 a month ago. Injections are in line with predictions; September may bring us rumors of colder winter thanks to El Nino. And again and again - read the statements of NG producers and try to come to their breakeven price. You should get $4-4.50 not current $2.80. My point that this price is not sustainable remains intact.
Now to question marks:
FC, LC, LH - meat sector is a question mark. There is uncertainty due to drought, higher slaughter numbers and costs of feed. It maybe that one should think of longs. But it is not the right time to make conclusions. Not yet.
OJ, CT, SB - all three are at positions when COT is nearly ready to be perfectly bullish. But the word "nearly" should be taken away from the equation.
Rice - rice is not perfectly bullish yet. But it well may become. High grain prices may pull rice prices up as well. There is no clear situation with rice in India, Thailand and Vietnam. We shall see.
Platinum - COT is bearish. Maybe I will open shorts in a week-two. I do not like the whole metal sector now so going short maybe a right option.
Metals are getting some steam but I do not trust this market at the moment. And again I have nothing to say about oil. Too much politics. The elections in the US are getting closer and economical issues are not on the agenda. Bernanke's words about QE3 become more concrete but not concrete enough. Yesterday I read that costs of EU-made products come down which is a good sign. Also, Greece has started to make some progress. The path will be long and painful, still there are high chances they won't manage the pace and surrender. Let us not be fooled by today's good news. "It wasn't raining when Noah built the ark" © Warren Buffet.