We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Gold Futures
Gold futures in the June contract are down $11 this Thursday afternoon in New York trading at 1,197 an ounce basically unchanged for the trading week as investors are awaiting tomorrow’s monthly appointment number which should send high volatility into this market as prices have rallied about $60 over the last three weeks as profit-taking ensued in today’s trading action. Gold futures are trading above their 20 day but still below their 100 day moving average telling you that the trend is mixed as I’m sitting on the sidelines waiting for better chart structure to develop as tomorrows trade should be very interesting. Estimates are around 244,000 new jobs added so any number higher than that will probably send gold prices sharply lower as that might in turn tell the Federal Reserve that interest rates might have to be raised sooner rather than later. The next major resistance in gold prices is at 1,220 as that’s the true breakout to the upside in my opinion, however the chart structure remains poor at the current time so wait for a tighter trading range to develop allowing you to place your stop loss minimizing risk as much as possible and try to stick with trades that are trending as this market remains very choppy so avoid gold at the current time.
TREND: MIXED
CHART STRUCTURE: POOR
Silver Futures
Silver futures in the May contract settled last Friday at 17.07 an ounce while currently trading at 16.85 on this holiday shortened week due to the Good Friday holiday tomorrow the markets will be closed finishing down around 20 cents for the trading week still hovering near a 6 week high. Silver futures are trading below their 20 and 100 day moving average as I have been sitting on the sidelines in this market as the chart structure is poor at the current time, however if you are bullish silver prices and think prices have bottomed my recommendation would be to buy at today’s price while placing your stop loss at the 10 day low which currently stands at 16.47 risking about $.40 or $400 per mini contract plus slippage and commission. Volatility in silver and the precious metals as a whole has come back as weakness in the S&P 500 is starting to put money back into the precious metals in the short-term as the U.S dollar has been consolidating their recent run-up as I still see choppiness ahead in silver as I’m waiting for a better chart pattern and tighter chart structure to develop therefore allowing you to place a tighter stop loss minimizing monetary risk.
TREND: HIGHER
CHART STRUCTURE: POOR
Crude Oil Futures
Crude oil futures in the May contract are down $1.00 this Thursday afternoon currently trading at 49.00 a barrel after closing last Friday at 40.87 basically unchanged for the trading week with very volatile trading sessions including yesterday when prices were up about $3 dollars as I’m still sitting on the sidelines in this market as the trend remains mixed and very choppy. Crude oil futures have been consolidating between $45 – $55 for the last three months after falling out of bed from around $90 a barrel to around $45 and that doesn’t surprise me as we could see sideways action for several more months to come so be patient and look at another market that’s currently trending. If you take a look at the daily chart there’s a possible double bottom being created around the $45 level and if you are bullish this market and think prices have bottomed I would probably take a shot at today’s price level while placing my stop loss below $45 risking around $4,000 per contract plus slippage and commission, however like I stated I’m currently waiting for a true breakout to occur. Traders are awaiting tomorrow’s monthly unemployment number, however markets will be closed so the reaction will happen on Sunday night and that will send high volatility into the market as expectations are 244,000 new jobs added as a stronger economy certainly creates stronger demand for gasoline and crude oil.
TREND: MIXED
CHART STRUCTURE: SOLID
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
Orange Juice Futures
Orange juice futures in the May contract settled last Friday at 127.70 while currently trading in this holiday shortened week at 123.30 down about 400 points for the trading week as I was stopped out in last week’s trade and I’m still shaking my head wondering what happened as I was been recommending a short position for several months but prices turned on a dime from around 105 level up to 130 as now I’m sitting on the sidelines as the chart structure is terrible. Reports had come out stating that the orange juice crop was the lowest in 47 years sending the shorts covering dramatically as markets can turn on a dime and that’s why must have an exit strategy, however I probably will not be trading orange juice for quite some time as the chart structure is terrible as the risk is way too high to be short or long so look at other markets at the current time as seasonally speaking orange juice futures are relatively quiet during the summer months due to the fact that a frost in Florida cannot occur until wintertime. Juice futures are trading above their 20 day but still below their 100 day moving average telling you that the trend is mixed as the next major resistance to continue its bullish momentum would have to be a close over 130 in my opinion.
TREND: MIXED
CHART STRUCTURE: SOLID
Cotton Futures
Cotton futures in the May contract are currently trading higher by 80 points this Thursday afternoon in New York currently at 63.40 basically unchanged for the trading week as traders reacted pretty neutral to the USDA crop report with plantings a little less than expected as this year’s crop will not be a record as now traders are focused on weather conditions in the southern part of the United States. Planting progress should increase rapidly here in the next couple of weeks as the volatility will increase even more during the summer months as historically speaking cotton prices are relatively low despite the fact of less acres this year, but prices have stayed lower due to the fact that we have ample supplies and China has massive reserves and are willing to sell onto the market if prices start to rally. Cotton prices can become one of the most volatile commodities in the summertime just like the grain market where prices can move 300 – 400 points on any given day so be careful as volatility is relatively low at this point but if a drought occurs you will see prices spike dramatically also very quickly. Cotton futures are trading above their 20 and 100 day moving average telling you that the trend in the short time is to the upside as prices look to be forming an ascending triangle on the daily chart but I’m still sitting on the sidelines waiting for better chart structure to develop.
TREND: HIGHER
CHART STRUCTURE: POOR
Live Cattle Futures
Cattle futures in the June contract settled last Friday at 152.97 while currently up 100 points at 153.25 up slightly for the trading week as I’m still highly recommending producers to look at the October 144/146 put options to try to protect your livelihood as I still think supply will come onto this market in next six months. Cattle futures are trading above their 20 and 100 day moving average still right near a 12 week high as I’m sitting on the sidelines as a speculator but advising clients or producers to be hedging as I think the 1000 point rally might be a little long in the tooth in my opinion as the commodity markets in general are discombobulated towards cattle prices and eventually the two will have to come together in my opinion. Cattle prices have gone sideways for the last 9 days as volatility has to come to a crawl but that won’t last for long as prices will break out of this tight trading range soon in my opinion; however I’m still personally sitting on the sidelines.
TREND: HIGHER
CHART STRUCTURE: POOR
Wheat Futures
Wheat futures in the May contract are up 7 cents this Thursday afternoon in Chicago currently trading at 5.35 a bushel with a possible breakout above 5.40 and if that level is breached my recommendation would be to buy while placing your stop loss below the 10 day low which will be around 5.00 risking $.40 or $2,000 as a possible head and shoulders bottom has been created. There are concerns about certain pockets of the Great Plains as weather conditions are to dry sending high volatility into this market despite the fact that the USDA crop report earlier in the week was slightly bearish sending prices down $.20 only to reverse sharply in the last couple of days as weather is now the main focus and certainly will keep high volatility in this market. Wheat prices have come from a high around 6.80 a bushel just 3 months ago bottoming out around 4.80 dropping almost $2 dollars so it would not surprise me if prices move higher especially when keys growing regions need rain in the next 7 to 10 days and you will see prices move higher if rain does not occur look with a breakout above 5.40 while maintaining the proper amount of contracts while risking 2% of your account balance on any given trade.
TREND: MIXED
CHART STRUCTURE: SOLID
Sugar Futures
Sugar futures in the May contract are sharply higher for the 2nd consecutive session currently trading at 12.72 a pound up another 40 points as I’ve been recommending a short position for several weeks as sugar prices traded as low as 11.93 a couple days back and has exploded since then on short coving. If you took my original trade place your stop loss at 12.92 which is only about 20 points away risking 20 points or $250 plus commission and slippage as the chart structure is outstanding at the current time. The soft commodity markets are higher across the board today as the commodity markets are starting to stabilize as traders await tomorrows monthly unemployment number as sugar will be closed but could react in Monday’s trade as the currency markets will certainly be affected by the jobs report so play by the rules and keep your stop at the proper level as were still hanging in there by the skin of our teeth. Sugar futures are still trading below their 20 and 100 day moving average telling you that the trend remains to the downside as several soft commodities have snapped back in recent weeks including orange juice which I was also short so if were stopped out then look at other markets that are starting to trend.
TREND: LOWER
CHART STRUCTURE: EXCELLENT
Coffee Futures
Coffee futures in the May contract are currently trading up 300 points at 137.80 a pound basically finishing unchanged for the trading week as volatility remains high despite the fact that prices remain in an extremely tight trading range over the last four weeks between 130 – 145 as a breakout is looming in my opinion as I’m currently sitting on the sidelines waiting for something to develop. If you have been following my previous blogs I have very few recommendations at the current time as many of the commodity markets are consolidating in the sideways pattern just like the coffee market as a breakout will not occur until prices break above 145 or below 130 as we start to enter the frost season in Brazil which can occur in May and June like it did in 1994 sending prices from 60 all the way up to around 260 in a matter of weeks. In my opinion coffee prices are on the verge of a bottoming pattern and we might go sideways for quite some time so keep a close eye on this market as this sleeping giant will wake up once again. Coffee prices traded as high as 230 just 6 months ago dropping dramatically as excellent weather conditions persisted throughout the growing year in Brazil but that has already been priced into the market as volatility certainly will increase.
TREND: MIXED
CHART STRUCTURE: EXCELLENT
Corn Futures
Corn futures are higher for the 2nd consecutive trading session currently trading in the December contract at 4.11 a bushel after selling off $.18 in Tuesday’s trade after the USDA announced the perspective planting report with the national corn acreage at 89.2 million down 1.8 million from last year but above the pre estimate report sending prices spiraling producing a crop that could be around 13.500 billion bushels but is still 600 million less than 2014. I’m currently sitting on the sidelines in corn as prices have been very choppy in recent weeks as volatility certainly has entered the grain market as planting in the southern part of the United States is way behind schedule especially in the state of Louisiana as price swings will happen on a daily basis as prices still remain in a tight trading range over the last three months between $3.95 – $4.20 so a breakout is going to happen soon in one direction or another so keep a close eye on the corn market. Even though planting intentions came out lower than last year really nobody knows what the actual planted acres will be as price fluctuations can change planting intentions in the next 4 to 6 weeks as soybeans are planted later than corn as soybean planting takes place in the month May in many parts of the Midwest.
TREND: HIGHER
CHART STRUCTURE: POOR
What is the difference between old crop & new crop in the agricultural commodities?
When analysts and traders talk about agricultural commodities such as soybeans & corn the one thing they generally mention is old crop versus new crop and that might confuse some beginners on what exactly is the difference. I will keep it simple because the only difference between old crop and new crop is that old crop in soybeans is any month other than November as an example is March or May and all months that were grown last year while the new crop is the November soybeans and will be harvested this October of 2015 and will be grown this summer. That’s why sometimes there is a price difference between the old crop and the new crop because of the fact that this year’s harvest in soybeans could be as high as 4.2 billion bushels pushing prices lower in the November contract as old crop and new crop can also have different carryover levels or supply levels. Old crop corn is any month other than the December contract while the new crop is only the December contract which will be grown this summer and harvested in October and sometimes there’s a price difference between old crop and new crop as well because as we will be harvesting around 13.5 billion bushels in October which is the reason why the December corn can be lower than the May corn because that was old crop which was harvested last October also having different supply situations. Many of the agricultural commodities are affected by old crop & new crop including the grains, meats, coffee, and cotton so if you need help understanding which month you should be trading feel free to give me a call at any time & I will be more than happy to make sure that you are trading the correct month.
If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com
SEERY FUTURES ACCEPTS CANADIAN COMMODITY ACCOUNTS
There is a substantial risk of loss in futures, futures option and forex trading. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Trading futures and options is Not appropriate for every investor. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts.
Michael Seery, President
Seery Futures
http://ift.tt/1fGCqDc
Twitter–@seeryfutures
Phone #: (800) 615-7649
mseery@seeryfutures.com
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