In June I am interested in following commodities:
Soybeans - this one has been a leader of the year so far. Now this is coming to end. I was long soybeans since early 2012 but I closed position at around $1440. In June I am going to short Soybeans after nearest price spike.
Why: COT tells so - the level of confidence of commercials is nearly at 3 years low. Basically, this means that people who are in soy business tell us that their long exposure is at minimum level. I read it as the prices have reached the top and from that point we should only expect soybeans to go down. Another "Why" - harvesting in South America is on the way. No matter how good or bad it will be there are plenty of soybeans at the moment. I expect prices to be going south at least till September.
There is one precaution too - the harvest of soybeans has poor forecasts this year so do not go short too recklessly and too aggressive. Get out if see first signs of danger. But these won't happen until August-September in my opinion.
Soybean Meal - a younger "sister" of soybeans, soybean meal went the same direction as soybeans or even faster. Now the prices are going to turn down. Again like in soybeans case, the COT report shows that commercial traders cut their exposure to 3 year minimum - a bad sign for bulls. Another reasoning is harvesting - more soybeans in the inventory mean more meal to be produced. My suggestion is to short soybean meal in June.
Soybean Oil - you are probably expecting me to say "Go short". Not this time. I have been shorting soybean oil since May and I am about to close this position in the first half of the June. The reason for that is the same COT report - soybean oil started its fall long time ago and commercial traders are taking more and more of long side now. Time to quit shorts - these guys know better than us.
Cocoa - this is my favorite pick of the month. I initiated first longs in May, and I will be buying more in June before 15th. It is harvest time for cocoa, so it is cheap this month. Also, crop projections are not that bright this year so we may see further price strengthening. I am going to keep long position in cocoa at least till the end of July but I may reconsider if supply turns bad. Another thing to watch is political situation in Ghana and Ivory Coast - major cocoa producers have unstable political systems.
Coffee - at the moment I hold short position. I am not going to close it till end of July - early August. Reasoning for that is the same - harvesting is on the way and inventories are being replenished. You can open shorts after any price spike. There is a precaution too - Brazil crop (roughly 1/3 of World crop) is not going to be plentiful this year. That is why I am going to keep a humble position and get out with the first signs of danger. But again, I do not expect to see any problems before August.
Crude Oil - usually I stay away from this asset. There is too much politics around it. But this time I will be waiting for 17th of June to see what Greeks would say at elections and then I may open a long position and wait till all the fuss calms down. No matter what happens with Greece the oil will cost above $100 again. At the moment I hope to see it below $90. I won't be broken if not cause I don't like buying politics together with commodities.
Natural Gas - this asset has been depressed for last years. The lowers were at the level of $1.90 several weeks ago. At the moment we see NG went up to nearly $2.80 and slowly creeping down to $2.50 as of today. Seasonally NG drops in summer, especially in July and if the weather is calm. Last week we got news of mild temperatures during Memorial Day weekend and this caused prices to go down to today's levels of $2.50. I won't be surprised to see them down but I read this as "opportunity". I am bullish on NG. No, not just bullish - I am super bullish on it. The reason for this bullishness is hidden in the financial statements of natural gas producers. They cannot breakeven if the price is below $4. Go read them yourselves - even a simple extrapolation would prove me right. In other words - no matter what the prices will be back otherwise the business won't survive. The count of gas rigs is falling rapidly already - producers switch to other businesses. Also, I was observing last EIA weekly reports - new injections are not above forecasts anymore but lower. The supply-demand relationship is changing. Consider this. In any event - do not go too much long this month, wait for July.
This is my plan for coming June. I am neutral meats (cattle/hogs) because I do not feel the market. I don't know what direction prices will take - signals are mixed. I do not have plans about metals either because I read mixed signals. COT report tells to go long but overall economic picture tells that prices can sink further. I don't want to gamble I better stay aside - "Bet on sure things" © Gordon Gekko.