What’s Up, What’s Down: British Pound Up, Pork Bellies Up, Cattle Up

Comments for Monday, June 30

Looking Ahead to Today By Reflecting back at Friday’s price action)

ENERGIES

Higher closes for the crude and heating while lower for the RBOB and natural gas. Crude oil made a new contract high and close while the RBOB made a new contract high before settling lower. All of the energies continue to look higher. Natural gas still has a Key Reversal in place but probably will be taken out. This reversal formation should be respected even though it’s less reliable than others.

CURRENCIES

Higher closes for the for the British Pound, Swiss Franc, Euro Fx, Japanese Yen, Canadian Dollar and Aussie Dollar while lower dollar index. The euro and franc are now turning back up both just barely missing buy signals so far. The key price to close over for the euros is 157630 and the francs 9857. The yen continues to move higher and should rally to the 9600 area basis the September contract as mentioned yesterday. The Canadian Dollar also settled higher again still needing to close over 9900 but has penetrated it the last two sessions. Still it looks higher overall. The Aussie Dollar has its second highest close and should test contract highs next week. The pound closed strong making its highest high and close since the end of March as it continues its upwards momentum. The dollar index made its lowest close since April looking very weak.

GRAINS

Reports Today: Acreage, Grain Stocks, Export Inspections, Crop Progress: Higher closes for old crop beans and meal while lower Minneapolis, Kansas City and Chicago wheat along with corn, oats, rough rice and new crop soybeans along with bean oil. Minneapolis, KC and Chicago wheat continue to look higher overall along with corn and oats with the former making a new contract high and the latter making its second highest high. Rough rice settled lower again and should test the 18000 area basis the September contract as mentioned yesterday. Old crop beans made a new contract high and close while new crop made a new high before settling $0.02 lower. Meal also made a new contract high and close while oil settled lower but still looking very strong overall.

MEATS

Higher for pork bellies, live and feeder cattle while mixed for lean hogs. Cattle made a new contract high close looking very strong while feeders still look weak against rising corn prices. Again hogs had their lowest low and close since the beginning of April and should continue towards filling its gap at 7040 basis the August contract. Bellies closed higher again and a close over 7500 could lead to a rally up to the 8000 area basis the August contract.

METALS

Higher for gold, copper and silver while lower for platinum. Copper still has strong resistance up to 400 basis the July and September contracts and my next price objective is 390. This market looks strong but needs to at least close over 400 for now. Gold and silver also settle higher with the former in the mist of an even larger potential buy signal and the latter close to its first buy signal trying to break out of its sideways pattern. Platinum settled lower and is also still in a sideways channel but now still at the upper end of the channel.

SOFTS 06/30

LUMBER: Lumber closed higher but is still bearish and in a resistance area needing to close over 260 basis the September contract at this time

ORANGE JUICE: Orange juice closed slightly higher with good support below 11000 (September). OJ is in a formation that could go either way; we’ll have to stand aside and wait for the outcome.

COCOA: Cocoa settled lower but very bullish overall.

COTTON: Cotton closed lower forming a large potential bottom in the new crop December contract till needing to hold around the 8000 area.

COFFEE: Coffee closed lower but is in a bull pennant looking very strong at this time. Coffee’s next objective is 16000 after reaching our 15500 price.

SUGAR: Sugar closed lower well off the sessions highs still needing to take out its last high of 1328 basis the October contract. Sugar is forming a huge potential bottom at this time. A close over 1300 again should really help but also needs to hold the 1250 area.

Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. Email Rick at ralexander@zaner.com or call toll-free (888) 281-4158.