What did Santa bring us? Hopefully the bag would be full of goodies. In January I am interested in following commodities:
Soy Oil - again and again I bet on it. BO is a scarce commodity in Q12013 due to:
(a) poor US crop,
(b) delays in Argentina soy planting
(c) low production volumes in Brazil (soy oil production is not popular there)
My call is sell high and buy low but the trend in the medium term is bullish. Let's see what WASDE tells us in a week time and let's watch weekly export sales.
Oil - despite high inventory levels, January is a period when oil price begins to heat up - new year, new optimism and preparations for summer driving season. All of these make me optimistic. Currently I have no position (closed on New Year rally) but I expect market to loosen a bit and jump in again.
Copper - same story as CL. Let's play "catch the bottom" game.
Heating Oil - my stance on HO is unchanged - short it in the medium term. But... there is always "but" - watch weather developments. It is true that in April the price should be lower than it is today but it is also true that severe colds in the North East will push prices higher. And do not forget another thing - HO prices is heavily correlated with CL price. Trade carefully.
Natural Gas - dancing on the razor's edge if you ask me. Losing a lot, gaining a lot... Watch the weather in Texas, Lousiana, California, North East, read weekly storage reports and rig counts. At current levels of 3.20-3.30 prices are lucrative but trade very carefully. Remember that the bottom of last year was in April at 1.90 level.
Moving to question marks:
PL and PA - they look interesting from historical performance point of view but COT data is at bearish levels so I prefer to wait and think.
Live Cattle - if prices drop a bit I will go long as seasonally speaking this would be wise.
Coffee - at these low price level, bullish COT and positive historical experience KC maybe a buy. But let's see how funds react first. I do not want to buy before they start covering shorts.
Lumber - I lost much on it so I do not want to jump in yet no matter what COT tells us. If building permits and home starts be negative then I be bearish too.
"Let us never negotiate out of fear. But let us never fear to negotiate." (c) John F. Kennedy. I chose his phrase for last paragraph. American pulliticians have proven us once again that they have no common sense. The comedy that we witnessed on New Year's eve was unbelievable. They "resolved" Fiscal Cliff issue. They spent months turning away from reality and did not want to admit that they had to do it or worse. Looking at this farce makes me think that democracy is a plague to society when politicians mix up personal with public. Be careful trading as a new big mess is just around the corner and no one really cares.