June and July are history now and it is time to draw the line and count gains and losses.
Wheat and Corn kicked the hell out of me when they rallied. I did not have huge positions but I took some pain - corn stocks figures and non-stop rains in corn I-states were grim for bears so I decided not to try my luck and booked losses. At the same time wheat was a follower, its fundamentals were not that hampered, in fact they remained bearish and its uptrend was nothing but overexaggerated reaction on corn and soybeans bullish figures. So I kept bearish wheat position and closed it after uptrend finished and booked profit.
Soy Oil - I short it and enjoy the downtrend in it.
Coffee - pretty much the same as soy oil.
Among the bets I did not announce back when I planned my strategy for June and July are sugar, gasoline, and hogs.
Sugar - I am short sugar cause world production figures come very impressive so stocks won't be depleted anytime soon.
Gasoline - this summer US gasoline production hits new records - over 10,000 thou barrels per day. This is a blast - refineries work like it is no tomorrow and hurry to refine all the oil in the World. This was bearish factor number 1 - supply explodes through the roof. Bearish factor number 2 came after analysis of crack spreads. It appears that present situation is very much acceptable for refiners as gasoline spreads are very sexy. So what does this mean to us, speculators? In Jan-Feb all crack spreads (HO, RB, 3-2-1 spreads) were very poor and it translated into bullish rally - all commercial (drillers and refiners) users did not want to tolerate falling prices anymore and joined forces and changed the direction of the market. Today situation is different - oil is much cheaper in relative terms than gasoline meaning that refiners' profits are safe and they can accept the case of falling oil prices. So gasoline prices have more room to fall.
Hogs - I am bullish hogs. Yes, that's right - there is finally a bullish bet in the dark kingdom of bears. Here is the reason - hog prices fell 50% from last year and 20% from 2 years ago. Last year industry was hit by PEDv, prices exploded but once PEDv epidemics was over - stocks recovery gave us a huge bearish rally. But the situation now is more like it was 2 years ago with major difference - prices are much, much lower today than in 2013. Besides, cattle prices are way too high now. This is another example of broken market balance. And balances always tend to be restored - nature of things.
This is it for June and July. I will post my thoughts about future month or two in near time.