Recently in livestock Category

If the dollar is moving south and the indices are moving north that is conducive for commodities to trend higher. Crude is above the trend line mentioned in yesterday's blog higher by over 3% in today's session. Not to mention a bullish engulfing candle on the daily chart so yes folks it looks like higher ground is in the future. Aggressive traders in futures should use $75.50 followed by $74.40 as support in August. A possible trade idea would be the October $80/85 call spread for $1700. Natural gas has lost ground for the last five days but $4.33 continues to support. Prices are starting to look over sold and we like purchasing 50 cent call spreads expecting a rebound in the coming weeks.

Indices domestically and abroad showed strength today rising 1.50-3% climbing to fresh highs. As of this post the S&P is above the 50 day MA and we've yet to get clients short. They are prepped and we expect to make a move this week or next; at the moment we are eyeing 75 point ES September put spreads and scaling short into futures for clients. We feel there is limited upside but an additional 3-4% is not out of the question.

We advised clients to take off more of their October sugar longs today thinking a correction may be in the immediate future. Sell a rally in cotton; we are selling above 77 for clients if given the opportunity. November lumber was higher by 3.20% today closing at $219; our target is $240-250. 30-yr bonds broke the 20 day MA trading down 0.70% as of this post. We're anticipating a trade down to the 40 day MA at 124′16 unless the equity rally is derailed. Continue to buy dips in December live cattle.

August gold traded up to but failed to close above the 50 day MA. On a settlement above $1218 we would be interested in gaining long exposure for clients. September silver was higher by 1.72% now approaching the 50 day MA. Most clients have bullish exposure either via September futures or December call spreads.

Corn was a loser again today; we see support in December at $3.77 followed by $3.70.
We suggest using the current pullback to be a buyer of December contracts. The dollar down equated to other currencies moving higher at least today. Clients are positioned to take advantage of a move to .9200 in the Swissie and 1.2300 in the Euro in the coming days to week.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

As long as indices tread water or move higher money should flow back into commodities and out of Treasuries and the US dollar. Crude followed thru today and now has the 20 day MA in its sights. As we said yesterday as long as equities move higher we think we could see Crude appreciate $3-5 relatively quickly. As of this post August is higher by $1.70. For the time being we would treat Crude as a range trade with resistance around $80 and support around $70. We advise position traders to remain long as long as August holds the $73.40 level. With an additional $3-4 move north in crude we should see the distillate move approximately 15 cents. August natural gas broke $4.50 today; futures traders should take off their longs at a loss. We continue to like buying clients October 50 cent call spreads but they may get clipped a little in premium in the coming sessions. That being said scale into the trade and do not try to outsmart the market.

Sideways congestion in indices was expected after yesterday. We're looking to be a seller from higher levels in the S&P. It is my opinion we will see upside surprises on earnings that will paint a false hope allowing our clients to get short closer to 1100 in the coming weeks. We worked out of some of our client's longs in October sugar today and hope to see a higher trade tomorrow and to work out of the remainder. Inside day in cotton today; clients need a trade at/or around 73 cents in December to get filled on their gtc profit orders. OJ was lower by 5.43% today. Another 7-10% decline and we may have an interest in buying November calls for clients. Aggressive traders can continue to short Treasuries with stops above the recent highs. As we said yesterday we're looking to lighten our clients exposure in currencies before stepping into September NOB spreads.

Trail stops up on your live cattle longs; we remain bullish but prices have appreciated nearly 4% in the last three weeks and nothing moves in a straight line. Buyers were able to support silver again today with September closing flat on the day but remaining above the 100 day MA. We suggest longs in September futures and purchasing December call spreads. In our opinion gold could go either way; we would use a settlement above $1216 or below $1173 to signal the direction of the next leg. September copper failed to get above the 50 day MA today; a level that served as resistance last week as well. We would expect a trade above $3.06 to lead to a probe of $3.20-3.25. We are satisfied with the performance in grains of late but the problem is we're anticipating a setback to add to longs for clients and to remove previously placed hedges.

Tomorrow morning's USDA supply and demand report could deliver the set back we've anticipated. Use setbacks in agriculture to be a buyer. The Loonie continues to work higher and we suggest buying dips. The Swissie which some clients are currently short continues to stubbornly inch higher. We still anticipate a trade back to .9200 but if we do not roll over soon we will cut losses. As expected the BoE left rates at 0.50% and the ECB at 1.0%.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Very suitable fireworks in the markets as we celebrate our Independence. Be safe we will be back Tuesday...enjoy your long weekend. We feel oil could have another 3-4% downside at the most before we get a bounce higher. As we voiced in recent posts we expect the $70 level to act as solid support in August. If next weeks trade finds buyers we should have some bullish plays in September or October futures and options.

Inside day in natural gas wiped out most of the previous days gains. Aggressive trades could have used today's setback to buy as we will stay long with clients as long as $4.50 supports in August. Our featured play is call spreads in October with clients. From here we expect indices to bounce; we view this as a tradable bottom but nothing more. On a bounce to 1060-1070 in the S&P we will be shopping bearish plays for clients. October sugar was higher by 2.58% today's closing at a six week high. On a run above 17 cents we see resistance at 17.45 followed by 18.35. If lucky enough to see that we advised clients to exit ALL remaining longs. On a settlement below 16 cents early next week our upside objectives would need to be reduced. December cotton closed lower all five sessions this week; our 74 cent objective is getting closer.

Aggressive traders that are ok trading illiquid markets could lightly buy November lumber as an interim low is likely in. Though volumes were light yesterday could prove to be an interim top in Treasuries; on confirmation next week clients will be looking at NOB spreads (short 30-yr bonds/long 10-yr notes). Continue to accumulate longs in December live cattle.

It was encouraging today in the metals to see little down side follow thru. Gold was slightly higher but unable to close above the 50 day MA. We will let the dust settle before making any calls. Trade lower was rejected in silver with prices closing just above the 100 day MA; in September at $17.83. We suggest buying silver as prices have come down 7.5% this week. Use set backs in corn, wheat and soybeans to be a buyer as we think the lows are in. Our favorite remains corn as we suggested clients to buy December next week on any retracement. As for currencies we have three ideas, long the Loonie, short the Yen and short the Swissie. For specifics do not hesitate to contact us.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

A supportive inventory report aided energy prices today with Crude oil and the distillates putting in another positive showing. We feel prices are overdue for a setback so we advise tightening up stops and lightening up on longs. On a pullback we would not expect much more than $3-5. At that point we would be a buyer again for clients. With natural gas prices unable to push thru $5.20 this could be day one of the pullback we had anticipated. A 38.2% Fibonacci retracement would also fill the gap from Friday we mentioned yesterday. We will be looking to be a buyer of September for clients if prices come off an additional 4-6%. We expect another 20-30 points higher in the S&P but think the 50 day MA at 1140 could be a significant hurdle.

If October sugar trades above 16.50 in the balance of this week we will be working out of most of our clients remaining longs. Risk to reward we still like the idea of short exposure in December cotton with tight stops or put options. September 30-yr bonds will close below the 20 day MA for the second day in a row but we've expected more of a breakdown. It may take the last gasp of air from sock traders to break Treasuries. Clients remain in bearish positions expecting 120/121 in September 30-yr bonds. Continue to work long December live cattle via futures and options. We suggest light exposure ahead of Friday's Cattle on feed report and then we will be adding to positions next week as long as we get no curve-balls on the report.

Sideways congestion in gold and silver as metal traders are trying to figure where from here? If we see new highs in gold and buying does not come into the market we will be offsetting those positions in the next few sessions. Stay tuned and we will let you know the outcome if we make a move for clients. Most clients have bullish exposure to silver but are growing impatient of the non-action. Those carrying large positions long corn we advised to establish some hedges or to lighten up on their longs taking some money of the table. We think there is more upside but we could get a setback in the short term.

We pulled back the order on the wheat we mentioned in recent commentaries; buying CBOT wheat and selling KCBOT wheat. Not because we do not like the trade...we do. We need to exit other positions before feeling comfortable gaining more exposure for clients. Traders could have been filled at our suggested limit today (25 cent premium to KCBOT). We suggest risking 8-10 cents looking to make 20 plus cents on the spread. Clients remain long the Euro expecting 1.2600, short the Yen expecting a trade below 1.08 and we put on a trade in the Loonie for some clients today. We think the upside should be capped at .9850 and could see prices give back after the 4.25% appreciation in the last week. Clients went short futures and sold puts against their position with an initial target of .9600.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Based on the late action we should see indices lead us higher next week. After an 8% rally in the previous four sessions Crude gave back some of its gain today closing down just over $1. The 9 day MA did hold and as long as that level supports we think higher ground ahead. That level is $73.25 in July and on a breach we would move to the sidelines. The distillates should continue to look for guidance from Crude oil. Natural gas gained just over 3% today but closes slightly lower on the week. We have advised clients to buy 20-40 cent dips. On that they would likely be buyers of September futures and September call spreads.

It has been a challenge sitting on our hands but we suggest selling a rally in indices only if we get it. On the S&P we see upside resistance at 1100, 1125 and then 1145. The higher price one sells at obviously the better. October sugar touched 16 cents today; our first target gaining 6.7% this week. On a further appreciation next week we will be advising clients to lighten up on their longs. Cotton was unable to break above resistance; we would suggest fading this rally via December futures with tight stops or purchasing December puts. We will likely explore bullish positions in November OJ next week for clients...stay tuned.

Coffee was higher by 6% on expiration, a large allocation by a fund and weather concerns. Unfortunately we missed this one*$? All clients' profits in their NOB spreads were given back today. We still like the idea of being short Treasuries and those not yet in the trade can join us at a better price. Our target in September 30-yr bonds remains 120/121. Sloppy week in live cattle with prices were range bound and in our estimation finding support at these level. We suggest gaining long exposure in December live cattle.

The 20 day MA held today with gold finishing slightly higher on the week after posting a record high. As long as the trend line at $1215 in August gold holds stay long. July silver will end the week just below the 50 day MA higher by 4.5% on the week but much of that came on Monday. We have most client's long futures and options thinking $19/ounce shortly. Agriculture was higher across the board; corn and oats settling near their weekly highs. Oats may not make the headlines but prices have advanced 20% in the last two weeks. Continue to buy corn as we think we've turned a corner. Much like the USDA report back in January put a top in Agriculture we think the USDA report this week may have put in a bottom. Clients are positioned long the Aussie looking for .8540 and then .8680. Others are short the Yen looking for a trade below 1.08.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Oil gained virtually 4% today and is $4 off its lows yesterday. As soon as we get thru the 9 day MA we expect to see more buying; that level is just above today's high. From here we see a grind higher to $76/barrel. That being said we expect heating oil and RBOB to trade higher. Our first objectives would be $2.06 in heating oil and $2.10 in RBOB. Natural gas traded but failed to close above the 9 day MA. Clients trailed stops and were stopped out at a profit today. We will continue to buy near $4 for clients and trade the range.

We would hope to see a larger rally in equities to institute shorts for clients in the ES once again. We expect to see buyers emerge between 1050-1060; if that level holds we would expect bulls to be able to push prices to 1125-1150 and we will re-establish shorts for clients. Inside day in October sugar but as long as the 15 cent level holds we like having clients long via futures or options. We've yet to make a move but we've started to price out bullish strategies in September coffee...stay tuned. 30-yr bonds traded below 124′00 for the first time this week but failed to close below that level. Clients are positioned short thinking a trade to 121-122′00 is in the immediate future.

We continue to advise clients to buy puts and to short futures in June and September 2011 Euro-dollars. August lean hogs gained 1% today lifting prices to the down sloping trend line. Clients may need to adjust their profit order to a lower objective...stay tuned. Gold is back above $1200/ounce gaining for the third consecutive session. Clients have yet to gain exposure but we are likely to see a new high in the coming weeks. We will likely have some bullish plays in the coming sessions. The only reason we've failed to get in with clients is most of our clients are long silver and we feel both metals should yield the same result in the short run. Today silver gained 2.10% vs. gold at 1.10%. We're expecting silver to trade above $19 in the coming weeks and will remain long with clients as long as $17.40 supports.

Aggressive traders could buy November soybeans and December soy meal with stops below the recent lows. Our favored Ag play is long exposure in corn as most of you know. Risk to reward two viable plays we see in currencies is long the Loonie and Pound. Our targets are .9650 and 1.4750 respectively.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

The markets have relaxed but as investors you must not. Their will be wild gyrations in the weeks to come so start thinking long and hard how you want to be positioned. At the moment $69 appears to be the line in the sand on front month Crude oil; July as of this post is at $70.20. Aggressive traders could buy futures with stops below the recent lows. We prefer to be buyers of August and September $5 bull call spreads for our clients. On the August contract we expect to see a trade over $78/barrel in the coming weeks. We have started to advise clients looking to capitalize on movements in the distillates to get long; if our analysis is correct in Crude we should see a bounce 20-25 cents in heating oil and 15-20 cents in RBOB. As for natural gas it is not high on our list but traders wishing for exposure should continue to trade the 40-50 cent range.

Continue to sell rallies in the indices; our downside targets are 1050 and ultimately 1000 in the S&P, 9600 in the Dow and 1710 in the NASDAQ. This could be a bumpy ride and we may see a rally back to the 100 day MA before the next leg lower. This comes in at 1135 in the S&P, 10545 in the Dow and 1895 in the NASDAQ. Cocoa closed above the 9 day MA today for the first time in two weeks; expect bullish trade recommendations in the days to come. Another 2-4% correction in sugar and we will start getting clients long October 10′ and March 11′ contracts. We likely will be sellers of cotton this week for clients so stay tuned. OJ closed lower today for the first time in eight sessions; could this be the beginning of the correction we've been calling for?

We're pricing out bearish play in Treasuries with futures and options but as of yet we've yet to price out a viable play. Based on the last two sessions we want to be selling rallies for clients but have yet to decide on a futures or options strategy...stay tuned. The short end of the curve remains a sell as we're advising clients to buy long dated puts or to sell futures. It appears the market is starting to price in higher interest rates. We will be looking to unwind the remainder of client's short August lean hogs on a drop of 1.50-2.50%.

Gold traded higher for the first time in eight sessions gaining virtually $20/ounce on the session. We see light support at $1170 in June but have yet to establish any positions for clients until we get further proof that the recent 6.5% correction has run its course. July silver was higher by 1.90% on the day but has yet to take out previous support which is now acting as resistance at $18/ounce. Needles to say we've advised clients to start working lightly long again via July futures or September $1.50-$2.00 call spreads. In Agriculture we suggest longs in September and December corn, November soybeans and December soy meal; for specifics contact us. The US dollar and Euro will likely set the tone this week as other crosses look for guidance. At the moment clients only exposure is longs in the Pound via July options.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.

Monday or Tuesday expect regulators to change the rules to the game. This should cause more volatility in my opinion as opposed to less but time will tell.

Crude and the distillates fell hard today as expected and prices hit our $72 price objective. Though it may be a few days premature clients were advised to start buying Crude today. We have yet to commit on futures but on signs of stabilization we will probe longs in July for clients next week. Today clients were buyers of $5 call spreads in August. We expect in the coming weeks to see this contract back in the mid $80's. The charts are ugly but sometimes you have to close your eyes and buy. Inside day in natural gas but prices managed to keep their head above water. Some clients still hold longs others took a profit yesterday when prices failed to get above $4.40. We are mildly bullish but need to see a settlement above $4.40 soon to remain in longs with clients.

Clients were looking for weakness into the weekend and the indices delivered cutting thru the 100 day MA and as of this post prices are near their lows down 2-3%. We expect more downside and have convinced most clients to hold there June ES puts anticipating 1075 next week. Sugar was down 3.6% today and is back below the 9 day MA. Hopefully not a false breakout but pay close attention to the action early next week. Clients are positioned long but will be forced to cut loses if we do not see a trade higher next week. We got partial fills for some clients to exiting their OJ longs. Continue to scale out of longs as we think a setback is on the horizon. Coffee lost 2% today; still we would like to see a trade closer to $1.30 before exploring longs for clients.

Treasuries remain in our opinion a sell rallies market but days like today remind me of the risk as prices were up over 1%. This trade may take a few weeks to develop so be patient. Live cattle broke down today but we failed to make a move as it happened so quickly. Prices broke the 20 day MA for the first time in several weeks so we think there could be more downside. A 50% Fibonacci retracement on the move from December would drag prices in August back closer to 89/90 cents. Lean hogs also broke down today closing below the 20 day MA. This is the confirmation we've been waiting for. Clients still hold August shorts and should be able to capitalize on a move under 81 cents.

Copper lost 4% today closing below the 200 day MA. Believe it or not clients that were long put options exited today at a small loss even with prices collapsing. This is the reason why we have no interest in trading copper options again on behalf of clients. Indecision in the gold and silver market today with wild trading ranges; June gold $32 and July silver 76 cents. We expect both to break lower but do not take this as a short recommendation we have just lightened up or exited longs for clients. Those not willing to leave positions were advised to tighten up stops.

Agriculture was hit today with prices on grains falling 1-2.50%. Clients will be buying this dip in corn via September options and December futures. Outside of that the only trade we like is long KCBOT wheat against short CBOT wheat. Clients exited their Loonie shorts from yesterday at a nice profit. Next week we will continue to sell rallies in the Loonie and Pound for clients. The US dollar ended the week strong gaining over 1% today. In our opinion this is near a trend change; look for more specifics in our commentary next week.

Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.