What’s Up, What’s Down: Sharp Lows Again for Beans, Meal and Oil
Comments for Tuesday, July 22
Looking Ahead to Today By Reflecting back at Monday’s price action
MEATS:
Higher for live and feeder cattle(August) along with lean hogs and pork bellies. Cattle is still in a support area but looking weak overall with key prices to hold at 9750(August), 10510(October) and 10750(December). Feeders closed higher again in the August contract with corn continuing its plunge lower. The August contract has given me a buy signal but the October hasn’t, although still looking higher overall. Hogs continue looking higher but are in heavy resistance areas with gaps below, making this a very difficult market for me to trade. There are 2 gaps in the August contract that one must be cognizant of also. Bellies look very weak to me closing higher in August and lower in February.
METALS:
Higher for copper, gold and silver while lower again for platinum. Copper is still in a possible topping formation with support at the 360 area basis the September contract and now in a bear pennant. Platinum continues to look lower, making a new recent low and close with its lowest low (5th consecutive trading session) since last February. Gold and silver look like they’ll test their recent highs.
SOFTS:
LUMBER: Lumber settled lower still in a very bearish looking market.
ORANGE JUICE: Orange juice closed higher once again, still just above a strong support area but losing some steam. OJ continues to look higher overall at this time.
COCOA: Cocoa settled higher some support(around 2800 basis the September contract). No new positions in either direction should be taken at this time but it does look lower overall.
COTTON: Cotton settled slightly lower still in what still looks like a bear triangle that has gone too far towards its vorte, looking to continue lower overall. The daily range has continued narrowing for the last week and one half.
COFFEE: Coffee closed slightly lower holding a very good support area so far. There is good support from 14000 down to 13500 basis the September contract. Really no position should be taken either way at this time.
SUGAR: Sugar closed lower at the bottom of a good support area needing to hold the 1250 area basis the October contract.
INTEREST RATES:
Unchanged for the eurodollars while higher for the bonds and notes once again. The eurodollars have flattened out with no good direction at this time, while the bonds and notes made new recent lows before settling higher but still looking lower overall.
GRAINS:
Lower to sharply lower closes for Minneapolis, Kansas City and Chicago wheat along rough rice, soybeans, soymeal, bean oil, oats and corn All of wheat continues to look lower but have been holding their respective support areas. Corn settled sharply lower once again bouncing off the 600 area basis the December contract as previously projected. This is not a good place to add on short positions. Shorts to tighten up stops or liquidate some or all of their positions at this time. Oats also settled sharply lower (6th trading session in a row) again, now at the lower end of its support area needing to hold the 400 area basis the December contract. Rough rice closed lower again as its daily ranges continue getting narrower and narrower still looking weak overall. Beans, meal and oil closed sharply lower again now with oil joining the sell signals.
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.