728x90 AdSpace

Latest News
April 11, 2015

Futures Market Recap Week Ending April 10

By Michael Seery for INO.com

Gold Futures

Gold futures in the June contract are trading above their 20 but still below their 100 day moving average telling you that the trend is mixed as I’m currently sitting on the sidelines in this market after prices settled in New York last Friday at 1,201 while currently trading at 1,208 up about $7 for the trading week as prices filled the gap that was created in Monday’s trade as the true breakout will be around 1,224 to the upside. The U.S dollar is hovering right around the 100 level once again as gold and silver have handled that bearish fundamental news pretty well in my opinion as prices rallied around $70 from last month’s low but sit on the sidelines as choppy markets are very difficult to trade successfully in my opinion as a breakout could develop in next week’s trade as the chart structure is starting to improve as well. Silver prices are up $.40 this afternoon as well continuing its choppy trend as prices continue to trade between $16 – $17 an ounce so keep an eye on gold in the next week or so as there could be a trade recommendation coming.

TREND: MIXED

CHART STRUCTURE: SOLID

S&P 500 Futures

S&P 500 futures in the June contract settled last Friday at 2060 while currently trading at 2086 up about 26 points for the trading week as earnings season is upon us and should send volatility back into this market over the next several weeks as prices are now trading above their 20 and 100 day moving average telling you that the short-term trend is to the upside. If you looked at my previous blogs earlier in the week there was a possible trade recommendation if the S&P does break 2031 which is quite a distance away so keep an eye on this market as 50 points can happen in one day as this market can explode with volatility due to a geopolitical event or good or bad earnings reports as the market does remain choppy as I’m sitting on the sidelines at the current time. The true breakout to the upside is at the all-time high at 2110 as a double top may have been created in the last couple months so be patient and let’s see what develops in the next couple weeks, but if you are bearish this market the main level of support that has to be broken is 2031 and if that is executed place your stop above the 10 day high risking 2% of your account balance. The stock market continues to move higher due to the fact that interest rates remain extremely low and in my opinion I do not think the Federal Reserve is going to raise interest rates in 2015 as low cost money continues to fuel the equity markets higher in the United States and the world.

TREND: HIGHER

CHART STRUCTURE: SOLID

Natural Gas Futures

Natural gas futures in the June contract are trading below their 20 and 100 day moving average hitting a new contract low as I’m now recommending a short position from around 2.60 level placing your stop loss above the 10 day high which currently stands at 2.77 risking 17 points or $1,700 per contract plus slippage and commission as the chart structure is solid at the current time. Natural gas prices continue to move lower due to the fact of large supplies settling last Friday at 2.76 currently trading at 2.60 down about 16 points for the trading week as warm weather has entered the Midwestern part of the United States also pushing down gas prices at the current time. The 10 day high will not be lowered until at least another week so you going to have to be patient with this trade keeping the proper stop loss risking 2% of your account balance on any given trade as the trend seems to be getting stronger on a weekly basis so play this to the downside and take advantage of any rallies in my opinion as I do think prices are headed lower.

TREND: LOWER

CHART STRUCTURE: SOLID

U.S. Dollar Futures

The U.S. dollar in the June contract are trading higher for the 5th consecutive trading session currently at 99.54 after settling last Friday at 96.80 up about 260 points continuing its long-term bullish momentum as the Euro currency is down for the 5th consecutive day looking to retest the contract low around 104.73 in my opinion. I’m currently sitting on the sidelines in this market as the chart structure is poor as monetary risk is too high in my opinion. The U.S dollar is looking to retest the 101 level which was the contract high last month as nobody wants to own European currencies due to the fact of quantitative easing pushing their currencies lower as well as the Japanese Yen. The U.S dollar has been a wrench in the closet to many of the commodity markets lowering demand causing exports to slow down pushing commodity prices to multi-year lows and I think that’s going to continue for some time to come as king dollar is back in my opinion but I do not have a trade recommendation in this market at the current time.

TREND: HIGHER

CHART STRUCTURE: POOR


Soybean Meal Futures

Soybean meal futures in the July contract are down 300 points currently trading at 309.20 a ton as I’ve been recommending a short position when prices broke the 315 level and if you took this trade place your stop loss above the 10 day high which currently stands at 332 risking around $2,300 per contract plus slippage and commission as the chart structure is poor at the current time due to the fact that prices have traded lower for the 5th consecutive trading session hitting a 7 month low. Demand for soybean meal is starting to slow as this is been one of the best bull markets in recent years, however over supplies are starting to push prices lower as we enter springtime planting as I do think prices can break the 300 level possibly in next week’s trade as soybean prices have also hit a contract low today very negative towards prices in my opinion. Soybean meal is trading below its 20 and 100 day moving average telling you that the trend is to the downside as the chart structure will start to improve next week lowering monetary risk so be patient as this trend is strong in my opinion to the downside as there’s more room to run especially with record acres planted once again coupled with Brazil producing another record crop as there are massive worldwide supplies coming out of the woodwork. The U.S dollar rallied sharply this week also putting pressure on many commodities including the grain market but the grains have a real over supply problem coupled with a strong dollar so unless there is some growing problem such as a drought I still see lower prices ahead.

TREND: LOWER

CHART STRUCTURE: IMPROVING

Cattle Futures

Cattle futures in the June contract were limit down this Friday afternoon in Chicago finishing lower by 300 points for the trading week as I’ve been pounding the table telling producers to be hedging in the October put options 144 – 146 and I hope you took that advice as Monday was a key reversal when prices traded as high as 154 and then finished lower dropping around 600 points from Mondays high. Cattle futures in my opinion are headed lower, however as a speculator I’m not recommending any type of position as the chart structure is poor as prices hit a 3 week low, however as a cattle producer I would want to offset some risk and protect my livelihood as feeder cattle prices were down 400 points and I think prices will open lower on Monday as well. Cattle futures are trading below their 20 but still above their 100 day moving average telling you that the trend is mixed filling the gap created several weeks ago on a daily chart as I’m not bullish the meat sector as prices are still historically way too high compared to the rest of the commodity markets especially with the U.S dollar up 260 points this week which eventually is going to put a limit on exports in my opinion. Cattle futures are extremely volatile with huge price swings that’s why you need to protect yourself in case something happens like it did in the energy sector as prices were cut in half in a matter of months as this can happen in the cattle market in my opinion as oversupply issues will come to fruition and if you’re looking to take a speculative trade I would sell at today’s price level while placing my stop above Mondays high risking around 500 points or $2,000 per contract but like I stated before I’m sitting on the sidelines.

TREND: MIXED

CHART STRUCTURE: IMPROVING

Wheat Futures

Wheat futures in the May contract are trading higher by 5 cents in Chicago currently trading at 5.25 a bushel after settling last Friday at 5.36 down $.11 for the trading week while trading above its 20 but still below its 100 day moving average telling you that the trend is mixed as I’m recommending a bullish position if prices break 5.44 as that would be a 3 month high but at the current time I’m sitting on the sidelines waiting for a breakout to occur. If you look at the daily chart there is a possible head and shoulders bottom being created as the chart structure has improved tremendously in the last several days in my opinion as I do believe a breakout could be in the cards, however the U.S dollar was up substantially this week putting pressure on many of the grains including soybeans and soybean meal which hit a new contract low in today’s trade. Wheat prices have rallied from the contract low around 4.80 to today’s price level on concerns of dry weather in certain sections of the Great Plains which have not received adequate rain as we are now entering the weather market in the entire grain sector so keep a close eye on wheat as a breakout could occur any day but at the current time prices remain very choppy. Wheat prices will become even more volatile than they are currently so make sure that you place the proper amount of contracts risking 2% of your account balance on any given trade.

TREND: MIXED

CHART STRUCTURE: IMPROVING

Oat Futures

Oats futures in the May contract are down 5 cents this Friday afternoon in Chicago as I’ve been recommending a short position around 2.70 a bushel and if you took the original trade place your stop loss above the 10 day high which in Monday’s trade will be 2.76 risking around $.12 or $600 from today’s price levels as we are currently trading at 2.64 right at session and weekly lows. Oat futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside as the grain market as a whole has turned negative as we enter springtime so continue to take advantage of any rallies and if you remember several months ago we were short and we got stopped out right near the highs so I’m giving it a second try as I think prices could still head sharply lower from today’s levels as the U.S dollar was sharply higher this week putting pressure on the grain market as a whole. The reason I’m taking this trade is the risk/reward is your favorite in my opinion as the chart structure is outstanding at the current time and that meets my criteria to enter into a trade as the next level of resistance is last week’s low at 2.54 which I think will be tested in next week’s trade.

TREND: LOWER

CHART STRUCTURE: EXCELLENT

Soybean Futures

Soybean futures in the May contract are trading lower for the 6th consecutive trading session hitting a 7 month low still trading far below its 20 and 100 day moving average as I’ve been recommending a short position for several weeks and if you took that trade continue to place your stop loss above the 10 day high at 9.90 risking around $.42 or $2,100 plus slippage and commission, however the chart structure will start to improve tremendously in the next couple of days. Soybean futures are trading at 7 month lows with the next major level of resistance at the contract lows that happened in October 2014 at 9.28 as I think prices will retest that level next week as global supplies are massive as the USDA reported this week that the Brazilian crop was raised once again to another record and could produce another record crop in 2016 due to expanding acreage as there’s very little bullish fundamental news to push prices higher at the current time. The United States will plant a record amount of acres producing possibly a 4.2 billion crop once again which could send carryover levels to all-time highs so at the current time continue to play this to the downside and take advantage of any price rally’s as the risk/reward is in your favor as I’m currently recommending a short position in oats, soybean meal, and soybeans as the grain market as a whole has turned south. Soybean planting will start in the next several weeks as this market will turn extremely volatile going into the month of May as weather conditions will be at the forefront on traders’ minds as we await the next USDA crop report which is still about a month away.

TREND: LOWER

CHART STRUCTURE: IMPROVING

Corn Futures

Corn futures in the December contract are trading lower for the 5th consecutive trading session as global supplies are ample at the current time with excellent weather forming in the Midwestern part of United States as spring planting is pushing prices down to 4.02 a bushel right near the lows of the recent trading range. Futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside, however I have been sitting on the sidelines in this market as prices have remained extremely choppy over the last 4 months but with soybean meal and soybeans breaking down in today’s trading action I think lower prices are ahead in my opinion but I’m not recommending a short position at this time. The chart structure in corn is relatively poor at the current time with large upswings and downswings as the real breakout to the downside doesn’t occur until prices break 3.95 and on the upside at 4.23 so be patient and wait for a trend to develop as volatility certainly will increase as we enter the month of May as the 2015 growing season is upon us. The U.S dollar was up over 260 points for the trading week and that certainly is not beneficial the corn market as that will curtail exports and with another massive crop around the bend carryover levels could continue to increase so if you are a corn farmer I would be concerned as you should have some type of protection or hedging program at hand.

TREND: MIXED

CHART STRUCTURE: IMPROVING

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.

Courtesy Michael Seery, seeryfutures.com/ via INO.com

About the Author: Michael Seery has been Senior Analyst for close to 15 years and frequently appears on Bloomberg news, Fox Business, CNBC, CNN Business, and Bloomberg TV.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters. © EconMatters All Rights Reserved | Facebook | Twitter | Free Email | Kindle

  • Blogger Comments
  • Facebook Comments
Item Reviewed: Futures Market Recap Week Ending April 10 Rating: 5 Reviewed By: EconMatters