Daily Commodity Report 4-30-19

Daily Commodity Report 4-30-19
Daily Commodity Report 4-30-19

 

Coffee Futures—Coffee futures in the July contract is currently trading higher by 90 points at 93.55 a pound as prices are right near a 2 week high as it looks to me that a possible spike bottom may have been created on April 17th at 89.00 as I’m keeping a close eye on a bullish position.

Coffee prices are trading right at their 20 day but still below their 100 day moving average which stands at 103 as the chart structure is outstanding at the present time due to the fact that the volatility is historically low.

Coffee prices remain bearish as prices continually move lower on a weekly basis as I’m not convinced the bottom is at hand, but prices have stopped going lower as that is one silver lining if you are bullish.

I will be looking at a bullish position once prices hit a 4 week high which could possibly happen in next week’s trade as the Brazilian Real has strengthened against the U.S dollar as that is a fundamental reason why prices have stabilized.

Fundamentally speaking coffee remains bearish as worldwide supplies are large coupled with Ideal weather conditions in the 2 largest coffee growing regions in the world which include Brazil and Vietnam, however technically speaking this market looks interesting.

 

TREND: –LOWER–MIXED

CHART STRUCTURE: EXCELLENT

VOLATILITY: LOW

 

Orange Juice Futures—Orange juice is trading sharply lower this Tuesday in New York down another 500 points at 97.20 and now has traded lower 7 out of the last 8 sessions.I have written about orange juice for quite some time and I thought prices would crack the 100 level and then test 90 as I see no reason to be a buyer of this commodity at this time as the trend is strong while the technical and fundamental picture remain negative.

Juice prices are trading under their 20 and 100 moving average as the trend clearly is to the downside, however we are now experiencing oversold conditions as it would not surprise me if some type of price kickback could occur, but I still believe lower prices are ahead.

If you’re short a futures contract I would place the stop loss at the 2 week high standing at 112.00 as an exit strategy as I still think there’s more room to run to the downside as the soft commodities sector remains bearish.

Ideal weather conditions in the state of Florida continues to accelerate harvest coupled with the fack of burgeoning supplies that we haven’t seen in several years so stay short .

 

TREND: –LOWER

CHART STRUCTURE: POOR

VOLATILITY: AVERAGE

 

 

Soybean Futures—Soybean futures are trading lower for the 3rd consecutive session down another $0.06 at 8.55 a bushel as prices broke major support earlier in the week and as I have talked about in previous blogs I believe prices will test the $8.00 level relatively soon.

At the present time there is nothing bullish fundamentally or technology about soybeans as soybean meal also hit a contract low today as demand is exceptionally weak due to the fact that we do not have a trade agreement with China coupled with the fact of massive supplies of record proportions.

At the time I’m writing this article the state of Illinois is raining heavily as much of the Midwest even received snow over the weekend as I think that will start to delay some corn planting which could mean more acres for soybeans which is another bearish fundamental factor towards prices.

Soybean prices are trading far below their 20 and 100 day moving average as the trend clearly is to the downside, however at this present time just like what’s occurring in orange juice we are experiencing oversold conditions which could have some type of price pullback, but the trend is strong to the downside so stay short.

The planting progress report was released yesterday showing that 3% of the crop has already been planted as the majority of soybeans are planted in the month of May.

 

TREND: –LOWER

CHART STRUCTURE: POOR

VOLATILITY: AVERAGE

 

 

Corn Futures—Corn futures rallied off of session lows to finish unchanged at 3.81 a bushel as there are some concerns about the cold and wet weather that has entered the midwestern part of the United States possibly delaying planting.

The crop progress report was released yesterday afternoon and it showed 15% of the corn crop has been planted, however the state of Illinois is only 9% planted as the average for this time of year is 43%, but this will not hurt yields unless this situation continues until mid May as last year we were at the same level of planting and we almost produced  a near record bushel per acre.

At the present time I have a bearish bias in wheat and soybeans as the grain market remains on the defensive, however if this wet weather continues we will have to shift more acres into soybeans and less out of corn which would be a bullish fundamental factor.

If you think a spike bottom was created on April 25th around the 3.71 level I would buy a futures contract at today’s price as the risk would be around $500 per contract plus slippage and commission as the risk/reward would be in your favor as the volatility in corn will certainly expand as the growing season progresses.

TREND: –LOWER—MIXED

CHART STRUCTURE: EXCELLENT

VOLATILITY: INCREASING

 

 

S&P 500 Futures—The S&P 500 in the June contract finished lower for the 3rd consecutive session up another 5 points at 2947 despite the fact that Google reported earnings and finished down almost $100 coupled with the fact that there could be a civil war erupting in the country of Venezuela, however the S&P 500 still finished higher.

If you have been following any of my previous blogs you understand that I am bullish the equity market as we await  Apple Computers earnings after the bell which will certainly send shock waves into the market in tomorrow’s trading session.

If you are long a futures contract I would place the stop loss under the 2 week low which stands at 2889 as an exit strategy as I think we will crack the 3000 level in the coming days ahead as I see no reason to be short this market as the gravy train should continue for the rest of 2019.

The 10 year note rallied today on fears of the Venezuelan situation accelerating as the yield stands at 2.50% which is exceptionally low for such a robust economy as that is just adding more fuel to the fire so stay long.

TREND: –HIGHER

CHART STRUCTURE: EXCELLENT

VOLATILITY: LOW

 

What’s 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 2019 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 4.3 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 15 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 a different supply situation.

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 to contact Michael Seery (CTA—COMMODITY TRADING ADVISOR) at 1-630-408-3325 I will be more than happy to help you with your trading or visit www.seeryfutures.com

 

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