Weekly Futures Recap With Mike Seery

Crude Oil Futures

Crude oil futures in the July contract settled last Friday in New York at 66.32 a barrel while currently trading at 69.64, up over $3 for the trading week as prices are right at a 3 year high.

Currently, I am not involved, but I think higher prices are ahead, and if you are long a futures contract, I would continue to place the stop loss under the 2 week low of 73.63 as the proper exit strategy. However, the chart structure will improve daily; therefore, the monetary risk will be reduced.

The main reason for the rally that we have experienced in 2021 is because the Biden administration is against fossil fuels. They have canceled the Keystone Pipeline, coupled with the fact that they are not allowing drilling in certain parts of Alaska as this situation will not end anytime soon. I think there's a chance we will be at $100 oil in the coming months ahead.

Crude oil is trading for above its 20 and 100-day moving average, telling you that the trend is to the upside. Gasoline and heating oil are experiencing long-term bullish secular trends, and I see absolutely no reason to be short as this situation will become dire as time goes by as now we rely on hostile foreign governments for much of our energy supply.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Cocoa Futures

Cocoa futures in the July contract settled last Friday in New York at 2468 while currently trading at 2451 down slightly still stuck in a 3 month consolidation pattern looking to break out soon, in my opinion.

I have been recommending a bullish position from around the 2500 level over the last month as this trade has gone nowhere. If you're still involved, continue to place the stop loss at 2311 on a closing basis only as the proper exit strategy.

Cocoa prices are trading below their 20 and 100-day moving average as the trend is to the downside. This was a counter-trend recommendation and I still think if you take a look at the daily chart, a possible head and shoulders bottom pattern is developing at the current time.

I also have a bullish coffee recommendation out of the soft commodity sector as I do think the volatility and the bull market will start once again in cocoa soon. If you are not involved in this trade, the risk at today's price level is around $1,400 per contract plus slippage and commission while making sure that you only risk 2% of your account balance on any trade.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Coffee Futures

Coffee futures in the July contract settled last Friday in New York at 162.35 a pound while currently trading at 158.25, down about 400 points for the week while still maintaining a longer-term bullish trend.

I have been recommending a bullish position over the last couple of months from around the 126.00 level, and if you took that trade, continue to place the stop loss under the 10-day low at 147.45 on a closing basis only as the proper stop loss. If you look at the daily chart, the uptrend line remains remarkably intact, and if we are stopped out, that also would be breached as that is critical support at this time.

Major concerns about a drought in Brazil, which is the largest producer of coffee in the world, has pushed prices higher. However, rain has entered key coffee-growing regions putting pressure on prices. If you have been following my previous blogs, you understand I've been bullish coffee for quite some time, and I do believe the 200 level will be broken in 2021. I will not take a short position as trading with the path of least resistance is the most successful way to trade over time, so stay long.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Corn Futures

Corn futures in the July contract, which is considered the old crop and was grown last year, is experiencing unbelievable volatility over the last several months, settling last Friday in Chicago at 6.56 while currently trading at 6.77, up about $0.20 for the trading week.

I am not involved as the chart structure is terrible; therefore, the risk/reward is not in your favor. Last week prices traded near the $6 level only then to rally to the $7 level instantly as this market is extremely high at this time. I am advising farmer clients to sell some of their cash corn at these near record-high prices as weather conditions remain ideal in the Midwestern part of the United States, although we do need a little rain.

Corn prices are trading slightly above their 20-day but far above their 100-day moving average as the trend remains to the upside. I am not sure where this commodity is headed. Crude oil prices are right at the $70 level as that is a fundamental bullish factor for higher corn, but this market is all based on weather conditions. I think you look at other markets that are beginning to trend and have less volatility.

TREND: HIGHER - MIXED
CHART STRUCTURE: POOR
VOLATILITY: HIGH

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Sugar Futures

Sugar futures in the July contract is currently trading at 17.75 a pound after settling last week in New York at 17.36, up about 40 points, continuing its long-term and short-term bullish momentum. I think prices will continue to move higher, and if you have been following my previous blogs, I believe the 20 level will be breached as this commodity continues to follow the coattails of crude oil as that market looks to have no end in sight.

I also have bullish coffee and orange juice recommendations that continue to move higher as the commodity markets have taken a recent pause lately. Still, prices could move significantly higher throughout 2021. Fundamentally speaking, drought concerns in Brazil are a major bullish factor for sugar prices. The National Weather System (NWS) last Friday issued a water emergency alert for central Brazil.

The NWS said the rainfall deficit in Brazil is "severe" and that the future weather outlook shows most of Brazil's central region will receive little rain from June to August. Prices are trading for above their 20 and 100-day moving average, telling you that the trend is to the upside, and if prices break the May 12th high of 18.25, I think we could be off to the races, so play this to the upside.

TREND: HIGHER - MIXED
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE

Orange Juice Futures

Orange juice futures in the July contract is trading higher for the 7th consecutive session, up another 35 points at 121.60 after settling last Friday at 118.45, up about 300 points for the trading week as prices have now hit a 4 month high.

I recommend a bullish position from the 110.00 level and then add to it this week around the 120.00 level. If you took both of those trades, continue to place the stop loss at the 99 level as I will raise the stop loss in next week's trade; therefore, the monetary risk will be reduced.

Juice prices are trading above their 20 and 100-day moving average as the trend is getting stronger weekly as many commodity sectors were higher across the board today as the mentality was risk on today. I think the volatility has to expand to the upside. If we get any sniff of a hurricane in the next 6 weeks, you could see prices drop dramatically, so stay long as I will be looking at adding more contracts because the risk/reward remains in your favor.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Natural Gas Futures

Natural gas futures in the July contract is trading at 3.10 after settling at 2.95 last Friday in New York, looking to continue its bullish momentum, in my opinion. Hot temperatures are expected throughout much of the United States, supporting prices here in the short term. I'm currently sitting on the sidelines, waiting for a bullish trend to develop.

If you have been following my previous blogs, you understand that we were in a bullish position for quite some time getting stopped out last week, but I do not believe the 3.20 level will be the high in 2021 as I am just looking for a nice entry point to get long.

Natural gas prices are still trading above their 20 and 100-day moving average as this trend is strong to the upside as the entire energy sector remains in a long-term bullish secular trend with higher prices coming. The chart structure will start to improve next week; therefore, the monetary risk will be lowered. I think there could be significant room to run to the upside, especially if we experience a hot summer.

TREND: HIGHER - MIXED
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market allowing you to place a stop loss relatively close due to small moves thus reducing risk. Charts that have violent up and down swings are not considered to have solid chart structure as I like to place my stops at 10-day highs or 10-day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loss.

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Phone #: 630-408-3325
[email protected]

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.

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