Futures Performance Looks To Be Mixed

Sugar Futures

Sugar futures in the May contract finished slightly higher this Friday afternoon in New York, up 12 points at 15.30 a pound as prices are hovering right near a 2 week high. I'm keeping a very close eye on this market as I'm looking at a bullish position on any type of weakness as I believe the risk/reward is in your favor, especially longer-term.

Fundamentally speaking, prices continue to be undercut by the raging pandemic in Brazil, which may prompt the government to extend lockdowns that crimp fuel demand and encourage Brazil's sugar mills to divert more cane crushing toward sugar production rather than ethanol production, thus boosting sugar supplies. Brazil reported a record of 4,195 Covid deaths on Tuesday.

I believe the Coronavirus will be reduced significantly in Europe. Therefore demand will come back to these commodities eventually. It is just a matter of when the United States is performing excellent at the current time. Sugar is still trading right at its 100-day moving average but slightly below its 20-day as the trend is mixed to lower, so look to be a buyer on any price weakness. I do not believe the 17.50 level will be the high in this commodity come 2021.

I also have bullish recommendations in coffee, orange juice, and cotton as I think the whole sector remains cheap. The chart structure at the current time is starting to improve daily as we are trading at major support on the monthly chart as I see no reason to be short.

TREND: MIXED - LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Cotton Futures

Cotton futures in the May contract is higher this Friday afternoon in New York, up another 60 points at 82.16 as prices are right near a 2 week high. The volatility in cotton certainly has increased substantially over the last several weeks.

I have been recommending a bullish from the 79.00 level and if you took that trade, continue to place the stop loss at 66.00 as an exit strategy as I think there is a high probability that a bottom has taken place. Continue reading "Futures Performance Looks To Be Mixed"

Will The Futures Market Start To Rally?

Orange Juice Futures

Orange juice futures in the May contract is currently trading higher by 20 points at 111.20 in a very quiet non-volatile trading manor this Thursday in New York.

At the present time, volatility has come to a crawl because prices historically speaking are depressed as we continually bounce off the critical 110 level, as it certainly looks to me that a bottoming out pattern is at hand. I have been recommending a bullish position from around the 110 level. If you took that trade, continue to place the stop loss under the multi-year low standing at 90 as an exit strategy as we're awaiting some fresh fundamental news to put some volatility back into this commodity.

Juice prices have gone nowhere over the last six weeks, continually bouncing around as prices are still trading below their 20 and 100-day moving average as the trend is to the downside as this was a counter-trend recommendation. I still believe the risk/reward is in your favor to the upside as the downside in price is limited, in my opinion.

I also have bullish recommendations in coffee and cotton as I think the commodity market downturn over the last several weeks is overextended. I think we will start to rally, especially with all the quantitative easing that the federal government continues to create, which should be a supportive factor just like it was in 2011, so stay long.

TREND: MIXED - LOWER
CHART STRUCTURE: EXCELLENT
VOLATILITY: LOW

Sugar Futures

Sugar futures in the May contract are currently trading up 12 points at 14.89 a pound as prices continue their short-term bearish momentum this week as we're hovering right near a three-month low.

I'm sitting on the sidelines looking to be a buyer soon. I think the downside will be limited at these depressed prices, with the major support standing at 14.50, which could be touched this week. You also have to remember we are closed on Friday due to the Good Friday holiday as it will be a shortened trading week. Continue reading "Will The Futures Market Start To Rally?"

Futures: All Eyes On This Week's Crop Report

Cotton

Cotton futures in the May contract settled last Friday in New York at 84.68 while ending the week on a positive note up 145 points, breaking a 7-day losing streak currently at 79.89, down nearly 500 points for the week as prices hit a 3 month low.

I have been recommending a bullish position from the 79.00 level, and if you took that trade, continue to place the stop loss below the September 29 low of 66.28 as an exit strategy. This is a high-risk trade as the volatility remains incredibly high as that situation is not going to change anytime soon, especially as we enter the summer season.

Cotton prices are trading below their 20 and 100-day moving average as this recommendation was a counter-trend trade. I believe prices have become too cheap as we topped out on February 25 at 95.68, dropping about 1,800 points in a matter of weeks from today's low. The commodity markets have run into trouble over the last several weeks because U.S. treasuries have hit a 1 year high in yields, pushing the U.S dollar higher, which are two bearish fundamental factors.

I remain bullish across the board. I believe this is just a retracement in a giant secular bullish trend that should continue due to massive quantitative easing from the U.S. government. Traders are keeping a close eye on next week's crop report, which will show the number of acres planted in the United States as that will certainly dictate short-term price action.

TREND: MIXED - LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGHOW

Coffee

Coffee futures in the May contract is ending the week on a positive note, up 225 points or 1.78% at 128.85 after settling last Friday in New York at 129.00, basically unchanged for the week bouncing off major support around the 125 level as I think prices look very cheap. Continue reading "Futures: All Eyes On This Week's Crop Report"

Will Valentine's Day Spoil Cocoa Futures?

Cocoa Futures

Cocoa futures in the May contract settled last Friday in New York at 2472 while currently trading at 2450, down slightly for the week still stuck in an 8-week consolidation pattern looking to break out on some from fresh fundamental news.

Fundamentally speaking, the concern that global cocoa demand will remain weak despite the Ivory Coast government's action to cut prices to boost sales.

Global chocolate demand concerns are negative for cocoa prices. Concerns have increased that Valentine's Day chocolate sales could fall from last year as tighter social distancing rules from the Covid pandemic delay a recovery in chocolate demand.

Cocoa prices are trading slightly below their 20 and 100-day moving average as the trend has turned to the downside. I think prices are just digesting the massive run up in price that we witnessed in November. Cocoa and coffee are the weakest commodities unable to join the rest of the agricultural markets to the upside, so be patient and wait for a trend to develop as trading in a choppy market is extremely difficult over time, so sit on the sidelines.

TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: AVERAGE

S&P 500 Futures

The S&P 500 in the March contract is currently trading lower by 4 points at 3908 after settling last Friday in Chicago at 3880, continuing its bullish momentum. This is a strong demand market as investors continue to put money into the entire equity market, especially the Nasdaq-100, which is at an all-time high once again. Continue reading "Will Valentine's Day Spoil Cocoa Futures?"

Will The Futures Market Heat Up?

Natural Gas Futures

Natural gas futures in the March contract are currently trading at 2.44 after settling last Friday at 2.69 continuing its bearish momentum. Forecasts for warmer U.S. weather will curb heating demand for nat-gas continue to weigh on nat-gas prices.

On Thursday, the Weather Commodity Group said that the U.S. South and Midwest should see higher-than-normal temperatures predominantly over the next 2 weeks and that prior forecasts for a polar vortex in the Arctic to drop down into the U.S. later this month is not going to materialize. I'm not involved as I keep a close eye on a possible counter-trend trade. I think the spike bottom, which was created on December 28th around the 2.26 level, will hold as a possible Head Shoulders bottom pattern could be forming, in my opinion.

Natural gas prices are trading below their 20 and 100-day moving average as this trend remains lower to choppy. Still, I think this commodity will join the rest of the energy sector to the upside; it's just a matter of when the risk/reward will become more in your favor, especially if cheaper prices come about, so be patient and sit on the sidelines.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Copper Futures

Copper futures in the March contract is currently trading lower by 260 points at 3.6215 a pound after settling last Friday in New York at 3.6020, up about 200 points for the week still stuck in a tight 6-week consolidation pattern. Continue reading "Will The Futures Market Heat Up?"