Burners On High Under Nat Gas
Natural gas spat flames again Thursday as multiple factors
converged to send the contract to its highest close in four years. Strokes of
heat on both coasts, strong cash prices and a bullishly construed stockpiles
report collided to give traders plenty of reasons to buy. The weekly
storage report from the AGA, released after the close of trading Wednesday, was at
the low end of expectations and aggravated the weak supply situation that
remains 25% below year-ago levels. Natural gas is increasingly being used as a
cooling fuel, firing power-plant generators which produce electricity for air
conditioners. Prospects for steady US economic growth has been fueling demand
for gas and a rising number of new gas-fired electrical-generation plants has
pumped up industrial use. July natural gas
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4.463.
Stock index futures finished narrowly mixed, although
NASDAQ 100 futures
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a decent gain of 61.00 to close at 3817.50. September S&P futures
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broke above 1500 but couldn’t sustain the rise and closed nearly flat at
1497.50.
Dow futures
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Pork bellies fell to a multi-month low Wednesday on weaker
movement of meat into CME warehouses, but turned around by the end of the
session to end on its highs of the day, making good on its
Turtle Soup Plus One Buy setup. The 84.900 area remains key because it is
the neckline of a head-and-shoulders pattern and long-term low. July pork bellies
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closed up 1.300 at 85.675.
Traders liquidated coffee in expectation that a report
scheduled for release after the close of trading Thursday by the Green Coffee
Association would show a large build-up in coffee stocks. The market was bracing
for up to a half-million-bag increase. A representative from the GCA said the
report came in at "393,859," slightly below expectations but still
high enough to kick GCA stocks to nearly a five-year high of 5.11 million bags.
Favorable weather in Brazil also weighed on coffee as did the the belief that
Brazil, the world’s largest producer, would not comply with attempts by a world
producing organization to limit global supply. Coffee
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made good on a breakdown below the low to end at its worst level in eight
months, down 1.70 at 88.15. Three down arrows on the
Futures
Trend Matrix have been pointing to coffee’s strong down trend.
Wednesday I pointed out in this space that July sugar
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left a doji, a candlestick pattern associated with a change in trend. Sugar
lapped lower and closed down .30 at 8.52.
Orange juice
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remains on our watch list due to its wound-up pattern and registration on all
three low-volatility lists. Because of its greater volatility differential, the 10/100
Low Volatility List here may be particularly important in forecasting a move
out of its five-month range. FCOJ is starting to show rising bottoms within its
extended consolidation, a potentially constructive sign. Still, volatility
differentials are not directional indicators so be ready to play both sides of
this market. Juice rose .40 to 83.30.