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Commodities Daily Hotline
10 July 2014                             By Cornelia Dichio, Analyst
Chart of the day: Sugar is top heavy

 

Tuesday's bounce by the Sugar instrument has been turned back, and the contract price has dropped back out of the late-February/early-July trading band/top formation.  The move through 175 has generated a bearish P&F Breakout signal on the automated scanner, which can be viewed on the II website under 'Signals'.  We recently opened a short on the original fall out of the top, and now lower the stoploss to 18.30.

 

Daily Comment:

 

In the Grains sector, Oats has recorded a 3.2% loss for Wednesday's trading.  Basically, this contract has been rangebound ever since the early-2014 recovery reached its pinnacle near 360.  This week, the price has encountered resistance at the April high, at 352.5; a resistance point within that band, and retraces back to the May/early-July floor near 320/315.

Also in this sector, the Soybean Oil issue has completely retraced the June recovery, and more.  Resistance was met at the May ceiling, at 41.40, which is not far from the 200-day moving average.  Now, the January floor at 37.72 has yielded, as the price falls to a new contract low.  We would point out, however, that the RSI has fallen to oversold levels.

In Energies, Crude and Gasoline have fallen under the shorter-term MAs.  The former has dipped under that line on two occasions in recent months, in March and May, without maintaining the moves.  At the moment, though, the price points to next chart support at the early-June reaction low at 100.93.

Also in this sector, the Natural Gas instrument remains weak beneath its multi-month top formation.  We continue to hold a short trade in the instrument and lower the stoploss to 4.65.

Energy contract make up the bulk of the weighting for the CRB Index, at 39%.  The recent pullback in these has played a part in the short-term decline witnessed in the Commodities gauge.  That fall is now approaching the March floor near 300; near the 200-day MA.  The RSI has also dropped to oversold levels.  However, should that support yield, the chart pattern for the year thus far would look rather top heavy.

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
XAUPHLX Gold & Silver Index103.773+2.6%
LBU4Lumber CME (September 2014)339+2.1%
LB2Lumber CME (cont)339+2.1%
SM2Soybean Meal CBT (cont)406.1+1.0%
MO1Carbon Emission (Cont)5.81+1.0%
Top 5 Losses.
SymbolStockClose% Change
O 1Oats CBT 1st Month Continuation357.75-8.3%
CT1Cotton 1st Month Continuation70.55-5.9%
O 2Oats CBT (cont)337.75-3.5%
O Z4Oats CBT (December 14)329.75-3.2%
BO1Soybean Oil CBT 1st Month Continuation37.04-2.0%
 
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
19 May 2014 Nickel LME 3 Months LMNIDS03 Long 20100 19525 -2.86% 17400
24 Jun 2014 Lean Hogs CME (LH Aug 2014) LHQ4 Long 131.075 129.6 -1.13% 122.5
27 Jun 2014 Cocoa NYBOT (September 2014) CCU4 Long 3120 3087 -1.06% 2950
1 Jul 2014 Platinum NYME (October 14) PLV4 Long 1496.8 1506.9 +0.67% 1450
2 Jul 2014 Aluminium HG LME 3m LMAHDS03 Long 1923 1939 +0.83% 1850
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
7 Jul 2014 Sugar NYBOT (October 2014) SBV4 Short 17.51 17.42 +0.51% 18.3
7 Jul 2014 Natural Gas NYME (August 14) NGQ4 Short 4.296 4.17 +2.93% 4.65
  • Stops are lowered on Sugar (Chart of the Day) and Natural Gas shorts.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFETests the lows of the band/top; near the 200-day MA. RSI oversold.301.187-0.7% 299.222321.36/313.271
CLQ4Crude Oil NYME (August 14)Corrects from overbought. Breaks uptrend support near the 50-day MA.102.29-1.1% 97.3/100.93107.45
XBQ4Gasoline RBOB NYME (August 14)Corrects from the overbought contract high. Falls under the 50-day MA.293.77-1.2% 282.44/288.87311.93
HOQ4Heating Oil NYME (August 14)S-t fall becoming oversold near the Aug 2013/Jun 2014 floor, around 285.287.11-0.1% 278.03/283.19/284.2307.83
NGQ4Natural Gas NYME (August 14)Falls out of the m-t range leaving a top.4.17-0.8% 3.921/4.0614.893/4.608
QZQ4Coal (August 2014)Retraces the recovery from oversold.60.25+0.0% 59.4366.05/61.7
GCQ4Gold CMX (Aug 14)Surging and overbought rally slows. Failed nudge over the Apr high (1331).1324.3+0.6% 1234.5/1305.04?1392
PAU4Palladium NYME (Sep 14)Extends the s-t rally to a new contract high. RSI high.872.7-0.0% 796.6/806.35/
PLV4Platinum NYME (October 14)Pauses the rally towards the Aug 2013 peak.1506.9+0.7% 1422.61549.9/1523
SIU4Silver CMX (September 2014)Overbought rally slows near the Feb/Mar peak area.21.068+0.3% 18.6522.16/21.79
LMAHDS03Aluminium HG LME 3mExtends the advance past the Aug 2013 high (1949) during Tues.1939-0.1% 1836/18701981
LMCADS03Copper Grade A LME 3mOverbought rally shows a loss of momentum by prior resistance at the Feb high.7125-0.1% 6513.25/6614.757460/7220
LMPBDS03Lead LME 3 MonthsS-t rally yields to ranging below the Jan high.2195-0.9% 2151/2170.52289/2230.25
LMNIDS03Nickel LME 3 MonthsReasserts the rally from the 'Trough' KDR of 25 June towards the May highs.19525-1.3% 15695/1770021625/20495
LMSNDS03Tin HG LME 3 MonthsRetraces the recovery from the 'Trough' KDR of 30 Jun.22280-1.0% 2185023849/23070
LMZSDS03Zinc Special HG LME 3 MonthsOverbought rally finds intraday resistance at 2318.5. Did not maintain the break over the 31 Aug 2011 rally high (2311).2281-0.0% 1937/20102539.5/2318.5
FCQ4Feeder Cattle CME (August 2014)Corrects from the overbought contract high.213.6-1.1% 204.85/212.15219.65
LCQ4Live Cattle CME (Aug 14)Unwinds from the overbought contract high.150.8-1.8% 144/149.75156.5
LHQ4Lean Hogs CME (Aug 14)Pauses the uptrend.129.6-0.2% 123.725/126.075133.375
C Z4Corn CBT (December 14)Drops to a new contract low. RSI oversold.398-1.5% /458.75/447.75
O Z4Oats CBT (December 14)Extends the range that has been in force for most of the year.329.75-3.2% 311.5361.75
IJQ4Rapeseed LIFFE (August 14)Oversold decline. Some intraday support arrives at the latest contract low.333.75-0.6% 330.75?364/355.75
S X4Soybeans CBT (November 14)Oversold fall continues to the floor of the early-2014 base.1103.75-1.1% 1088.251246.25
SMZ4Soybean Meal CBT (December 2014)Maintains the oversold fall.355.2-0.6% 337.1398.3
BOZ4Soybean Oil CBT (December 2014)Falls under the Jan floor to a new contract low. RSI oversold.37.3-1.8% /43.08/41.4
W U4Wheat CBT (September 2014)Extends the oversold decline to a new contract low551.25-0.9% /607/597.5
QKX4Wheat LIFFE (November 2014)Oversold decline continues to a new contract low.132-0.8% /144/139.5
CCU4Cocoa NYBOT (September 2014)Holds the uptrend near the highs.3087-0.9% 2861/
KCU4Coffee NYBOT (September 2014)Possibly reasserting the downtrend. Probes support at the 200-day MA.172.9-0.0% 138.25220.6/199.75
CTZ4Cotton (December 2014)Extends the oversold fall towards the June 2012 floor.69.67-0.6% 68.2584.74/78.74
LBU4Lumber CME (September 2014)Develops s-t range support near 330. Possibly reasserting the s-t rally to the 200-day MA.339+2.1% 293/330354.6/349.3
JOU4Orange Juice (September 2014)Oversold decline reverses.151.05+0.1% 141.5/145.55167.65
SBV4Sugar NYBOT (October 2014)Renews the fall from the late-Feb/early-Jul top.17.42-1.5% 16.3618.91/17.78?


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