We’ve asked Michael Seery of SEERYFUTURES.COM an IB of Peregrine Financial Group 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.
Grain Futures—The grain market sold off today with soybeans in the November contract selling off more than 20 cents to close around 15.06 a bushel blamed on profit taking as well as improving weather in the Midwest with temperatures dropping into the low 80s for the next 7 days. Corn futures dropped 16 cents a bushel also on improving crop conditions as well as traders taking profits ahead of the weekend. Wheat futures were down 24 cents reversing much of yesterday’s gains while oat futures sold off 4 cents to close around 3.60 a bushel right near new highs. I remain very bullish the grain sector because of the fact that the crops are in deep trouble if the hot and dry pattern continues in the next couple of weeks causing supply concerns in soybeans which already have a historically low carryover. Rumors are circulating that China is scrambling to load up on soybeans because they fear a shortage also causing prices to move higher. July 11th is the first crop production report which is next Wednesday which will give the market some fresh fundamental news to dictate short term prices.
Currency Futures--- The Euro currency this week has been absolutely crushed finishing down nearly 400 points for the trading week currently at 1.2300 which is hitting a fresh four week low and only about 20 points away from fresh contract low reversing all of last Fridays enthusiasm on the EU agreement. The U.S dollar is hitting a three week high today climbing higher for the second straight trading session currently at 83.30 looking to break through contract highs of 84 which could happen next week especially if any problems arise in Europe which seems to happen about every three weeks or so. The British Pound this week finished down about 200 points to close right around 155 right at major support and still about 300 points away from contract lows and is acting stronger than the Euro currency due to the fact that the British Pound is not part of the Euro. The Canadian dollar was unchanged for the trading week currently trading around 98.20 continuing its uptrend in recent weeks looking at possibly head back it major resistance of around 99 – 100 which could happen in the next couple of weeks. As I've stated in many previous blogs I am very bearish the Euro currency and I am bullish the U.S currency due to the fact that I think Europe is in a whole lot of trouble and all of these agreements are a bunch of nonsense in my opinion all they do is prolong the inevitable which is going to have to be a breakup of the Euro currency down the road sometime forcing investors to seek a flight to quality to either U.S treasuries or the U.S dollar. Today released the monthly unemployment report which came out stating that the economy added 80,000 jobs keeping unemployment rate at 8.2% which was considered bearish therefore selling off the stock market and the currencies around the world causing the U.S dollar to rally along with U.S treasuries.
Energy Futures--- The energy futures this week has a wild ride with crude oil finishing the week basically unchanged however this Friday afternoon trading sharply lower by $2.80 a barrel currently trading at 84.70 in the September contract on a pessimistic U.S jobs report this morning stating that the unemployment rate was 8.2% while the economy only added 80,000 jobs which was deemed unimpressive by the market selling off stocks and currencies around the world causing many commodities to selloff including the energy sector. Crude oil has had a wild ride since last Friday being up seven dollars on the EU agreement and then earlier in the week up three dollars before reversing to finish unchanged at this point and I really do not have an opinion in the crude oil market because there really is no trend at this point so I still advise traders to sit on the sideline and wait for a possible trend to develop and in my opinion it looks like the trend will be to the upside especially if Iran starts up with their nonsense again. Unleaded gasoline futures for the week were up 1000 points hitting a four week high however today trading lower by about 400 points but having a significant rally from contract lows which were just hit earlier last week while heating oil futures are down 500 points for the day they did finish basically unchanged for the week right near a four week high looking to continue their bullish momentum on problems in the Middle East and the fact that the European situation might have improved therefore sending some optimism about demand in the energy sector. Natural gas futures have really had a nice run up in the last four weeks trading higher for four consecutive days before today blamed on profit-taking down about six points at 2.88 however earlier in the session ended the week traded as high as 3.06 which is up over 45% from contract lows that were just hit four weeks ago all due to hot weather in the Midwest causing great demand for air-conditioning. The energy sector in my opinion seem to bottom out last week right before the EU agreement and I do believe we will chop around for a little while especially if the Euro currency continues to move lower and that is what is putting pressure on the energy sector due to the fact that crude oil is priced in U.S dollars therefore when the currency rises generally the energy sector sells off and that is exactly what is happening today with the possibility of new contract lows in the Euro currency either later in the trading session or early in the week.
Precious Metal Futures-- The precious metals today are finishing the week off on a very sour note due to the fact of a poor monthly unemployment number which came out at 7:30 this morning adding only 80,000 new jobs which was disappointing to the market sending the U.S dollar sharply higher against the Euro currency causing all of the precious metals to trade sharply lower in today's trading session while gold for the week did finish down about $25 after the large run up on last Fridays EU agreement sending gold higher by nearly $50 and continuing its incredibly choppy trade over the last couple of months with major support around 1,550 settling today around 1,579 an ounce. Silver futures for the September contract trading right around $27 an ounce down around $.40 for the week still stuck in a sideways channel between $28 and $26 looking to find a trend however at this point I still advise to stay away from silver and gold due to the fact that they are choppy markets with no trend and wait for a breakout to develop before entering. Copper futures for the week finished down around 800 points after hitting a fresh six week high last Friday on renewed economic outlooks across the world currently trading in the September contract at 341.50 a pound and trading is highs 355 earlier in the week. I believe that the precious metals are bottoming at these levels , however I would still wait for a break out to the upside, but at this point keep an eye on the metals if the Euro currency can ever stabilize especially with QE3 possibly coming down in the next two months prices could be attractive at these levels.
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.
Stock Futures--- The S&P 500 is reacting negative late to the jobs report which came out this morning stating that we ended up adding 80,000 new jobs keeping unemployment rate of 8.2% sending the S&P futures down about 16 points for the trading session currently trading around 1345 after hitting an eight week high yesterday on optimism about the EU agreement and the possibility of stimulus around the world propping up commodity and stock prices recently. The Dow Jones futures contract is down 150 points for the week also hitting a fresh eight week high yesterday and rallying about 1000 points in the last four weeks and only about 400 points away from making contract highs which in my opinion would be a remarkable feat. NASDAQ futures are down only about 10 points for the week after yesterday hitting an eight week high and also rallied about 10% from the lows in just four weeks basically blamed on profit-taking today as well as the Euro currency making new contract lows against the U.S dollar and a pessimistic jobs report. That is the second jobs report in a row which is been pessimistic and I do believe that trend is going to continue and in my opinion the only reason the stock prices are this high is because of constant government intervention propping up prices going into the election. I do think volatility is going to get more volatile here as the summer continues but the real action will be in November when the election occurs and in my opinion if President Obama is reelected that would be a major negative to stock prices going forward.
Meat Futures--- Live cattle futures today are unchanged this Friday afternoon down about 100 points for the week possibly hitting a double bottom right around the 117 level on the daily charts looking to continue its grinding momentum to the upside while feeder cattle futures have been crushed in the last 3 to 4 weeks due to the fact that corn prices have absolutely skyrocketed which is a tremendous negative to feeder cattle prices due to the fact that the farmers will send their cattle to slaughter because the cost to feed them is too high and unprofitable therefore sending supplies to the market and that is exactly what is happening this week while feeder cattle just 4 weeks ago were trading right near the highs of 161 and currently are all the way down to around 146 a pound down over 500 points for the week, however today after hitting fresh contract lows rallied slightly on the close. Lean hog futures have been the one bright spots recently hitting a four-month high on Monday but finishing slightly lower for the week but continuing its bullish momentum due to the fact that the hogs are having low weights due to the extreme hot weather here in the Midwest pushing prices higher and in my opinion I think we are in a bull market in lean hogs and will continue to move higher during the summer months while I am very bearish the feeder cattle at this point because I do think the grain market is going sharply higher even from these levels because I have witnessed mass destruction of corn fields in the state of Michigan, Wisconsin, and Illinois and I believe on Wednesday's report they will cut production significantly therefore putting further pressure on feeder cattle prices here in the short term. I'm still advising people to sit on the sidelines in the live cattle market it may have possibly bottomed, however there is no trend at this point I would rather wait for a break out before entering to the upside.
Milk Futures--- Milk futures here in Chicago finished the week basically unchanged after hitting new highs once again in the August contract currently trading at 17.50 right at contract highs and a remarkable run in the last two months which is up about 20% from contract lows on concerns of production being cut due to the Midwestern drought. Milk prices may have bottomed on the weekly chart bottoming out right around the 15 level now with the next major resistance between 18 – 19 which could happen in the foreseeable future especially of the heat wave continues in the next couple of months. There is major support in the August contract right around 17.20 and then after that right around 17.00 and major resistance right at contract highs of 17.65 with next week's crop production report on Wednesday which should propel milk prices out of this tight trading range in the last two weeks.
Orange Juice Futures--- Orange juice futures today settled 280 points higher to close in the November contract at 126.75 right at fresh 8 week highs as traders are looking at many of the agricultural commodities wondering if a low has been placed in the last couple weeks especially in the soft commodities with cotton, coffee, orange juice, and sugar all rallying significantly from contract lows just two weeks ago. There is major support in orange juice futures for the November contract at 110 – 105 which is the contract low and I do believe in my opinion that the lows have been formed in in the orange juice market at this point and I do think prices are headed higher especially with hurricane season right upon us. Orange juice futures have plummeted in recent months coming from prices at nearly 200 all the way down to about 100 just a couple weeks ago before bottoming out now looking at turning the trend to the upside and if you're looking to get into the orange juice market the options and the volatility at this point are relatively low so take a look at some call premiums or look at trading the futures market remembering always to use a stop loss in case you are wrong on any given trade.
Coffee Futures--- Coffee futures this afternoon in New York tumbled 450 points to close around 176.00 a pound in the September contract but is still higher by about 500 points for the week continuing their bullish momentum and at one point hit a two-month high yesterday at 187 a pound before profit-taking took place sending prices back down to today's level also with a very bearish commodity and stock market today due to the fact of a pessimistic jobs outlook which sent the Euro currency down to a new 22 month low causing traders to sell off all hard assets. In my opinion I have been recommending buying coffee and I still believe coffee is going higher at these levels due to the fact that I believe many of the soft commodities have bottomed including sugar, orange juice, cotton, and coffee which I believe will be bull markets ahead of us in many of the commodities due to the fact that they QE3 will come down the pipeline especially if the stock market has any bumps in the road. Coffee prices have risen nearly 25% from contract lows in just three weeks which has been a great rally blamed on massive profit-taking after the long sharp declines in recent months where traders are taking profits and getting out of their short positions and now actually getting into long positions. Coffee volatility is very low even after the recent run-up I still suggest you look at call options risking what the premium cost therefore minimizing risk and being able to stay in the market for several months not having to worry about day-to-day fluctuations.
Michael Seery, President
Phone # (800) 615-7649
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