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Commodities Daily Hotline
7 October 2014                             By Cornelia Dichio, Analyst
Chart of the day: US Coffee trades at fresh high

 

Contracts in the Softs sector have generally turned bullish, though the NYBOT Coffee issue has proved to be the outperformer.  Recording a 6.9% gain for the Monday's session, the price surged up to trade over the April ceiling (222.6) during the day.  The next chart resistance is in the 240 region, from the early-2012 highs.  We would point out though that the RSI is indicating an overbought condition.

The LIFFE Coffee instrument rally is also overbought, as it approaches this year's earlier ceiling near 2200.

 

Daily Comment:

 

The chart of Sugar was printed in Monday's hotline, as the price had encountered support above last month's low and the pattern was starting to look like a potential base.  The recovery was resumed yesterday to probe the 50-day moving average.  We remain long and up the stop to 15.75.

Also in the Softs sector, Cotton improved.  Lifting off the latest contract low, 60.83, the price is also testing possible resistance from the shorter-term MA.  A clearance would leave bulls aiming for last month's high at 68.48.

Grains also improved.  We note the bullish P&F Breakout signals in Corn and Soybeans in this sector.  Both have lifted from their oversold contract lows, and point to downtrend resistance at the 50-day MA, near 350 and 1000, respectively.

The counter move for LIFFE Wheat shown here started off in much the same way.  Note that intraday resistance was found near the 50-day MA yesterday.  It is possible that the same fate awaits Corn and Soybeans.

We open a long trade in White Maize (see hotlines for 25 September and 6 October), where the move through 1867.2 completed a base.  The stop is placed at 1740 for now.

The Soybean Oil instrument appears to be basing between the 50-day MA and September's floor.  The upper boundary, at 33.83, is under pressure.  We will consider purchasing a breakout as that would complete the short-term base.

Oats is rallying towards the upper perimeter of a much larger trading band/base around 360.  We watch to buy a breakout for the potential towards the 380 region (see also hotline for 3 October).

Rapeseed is another Grain that looks as though it is building a base after pushing past resistance at the 50-day MA and 'Peak' KDR of 29 August.  The price of the contract is about to test the late-July high at 335.5.  We will consider buying a breakout.

The oversold declines by most Precious Metals contracts fell to new lows yesterday, where intraday support arrived.  In the case of Gold shown here, there are also 'bear trap' recovery implications following the failed break under the late-2013 floor (1185).

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
KCZ4Coffee NYBOT (December 2014)220.8+6.9%
KC1Coffee NYBOT 1st Month Continuation220.8+6.9%
KC2Coffee NYBOT (cont)224.45+6.7%
COFFCoffee2.8275+5.2%
DJUBSSODow Jones UBS Softs59.8802+4.9%
Top 5 Losses.
SymbolStockClose% Change
NG1Natural Gas NYME 1st Month Continuation3.898-3.5%
NGX4Natural Gas NYME (November 14)3.898-3.5%
NG2Natural Gas NYME (cont)3.987-3.2%
UNGNatural Gas20.96-3.1%
FC1Feeder Cattle 1st Month Continuation240-0.4%
 
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Stop Comment
26 Sep 2014 Sugar NYBOT (March 2015) SBH5 Long 16.56 16.98 +2.54% 15.75
6 Oct 2014 White Maize SAFEX (December 04) WZZ4 Long 1867.2 1895 +1.49% 1740
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
25 Sep 2014 Orange Juice (November 2014) JOX4 Short 140.25 142.55 -1.64% 154
  • A long is opened in White Maize.
  • The stop is upped on long Sugar.
  • We watch to buy Rapeseed, Oats and Soybean Oil.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEPauses the downtrend towards the Jan floor.280.242+1.4% 272.036/275.362284.675/283.234
CLX4Crude Oil NYME (November 14)Reaffirms downtrend resistance at the late-Aug high; near the 50-day MA, with a 'Peak' KDR. However, remains above recent support at 88.18.90.34+0.7% 87.8597.35/95.07/94.9
XBX4Gasoline RBOB NYME (Nov14)Holds downtrend resistance at the 50-day MA.241.32+1.5% 232.45259.33/255.86
HOX4Heating Oil NYME (Nov 14)Holds the oversold decline.262.13+0.2% /289.24/272.02
NGX4Natural Gas NYME (Nov 14)Extends the late-Jul/Oct range; beneath the 200-day MA. Potential base?3.898-3.5% 3.7864.184
QZZ4Coal (Dec 14)Holds the oversold fall.53.4-0.2% /62/60.4/60.02
GCZ4Gold CMX (Dec 14)Rebounds from oversold. Failed break under the late-2013 floor (1185).1207.3+1.2% 1183.31297.6/1243.2
PAZ4Palladium NYME (Dec 14)Oversold fall finds firm intraday support at 735; near the upper side of the prior base.766.1+1.5% 699.1/735850.65/825.45
PLF5Platinum NYME (January 15)Oversold and accelerated fall finds firm intraday support at a new contract low.1249.2+1.8% 1186.51377.2/1350.2
SIZ4Silver CMX (December 2014)Oversold fall towards the Feb 2010 low slows.17.225+2.4% 15.73/16.64?19.95/18.885
LMAHDS03Aluminium HG LME 3mOversold decline pauses by sideways trading around 1900.1929+0.8% 1836/1885?2184/2119.5/1978?
LMCADS03Copper Grade A LME 3mHolds the ranging retreat from sideways trading near 7200 to support along 6600.6710+1.0% 6513.25/65917108.75/6992
LMPBDS03Lead LME 3 MonthsPauses the fall near the Mar/Apr lows.2103+1.2% 2013.25/20322279.15/2148
LMNIDS03Nickel LME 3 MonthsOversold fall from the m-t top pauses.16700+0.9% 14830/15695/1586919990/17501
LMSNDS03Tin HG LME 3 MonthsOversold decline shows a loss of momentum near the round 20000 level.20480+0.6% 18809/20000?23070/21468
LMZSDS03Zinc Special HG LME 3 MonthsMoves over the 50-day MA. Potential top extension.2310+1.9% 2173/22162416
FCX4Feeder Cattle CME (November 2014)Holds the rally near the contract high. RSI overbought.240.275-0.3% 206.15/222.4
LCZ4Live Cattle CME (Dec 14)Holds the overbought uptrend near the contract high.166.3+0.3% 147.225/157.45/
LHZ4Lean Hogs CME (Dec 14)Ranging between support at the 200-day MA and the overbought Sept high.95.875+3.1% 84.275/90.9?105.5/99
C Z4Corn CBT (December 14)Counter move from the oversold contract low.332.5+2.9% 318.25381/358/350.5
O Z4Oats CBT (December 14)Extends the broad band. Rallies to the highs.350.5+2.4% 311.5/326379.25/361.75
IJX4Rapeseed LIFFE (November 14)Breaks resistance at the 50-day MA and 'Peak' KDR of 29 Aug (329.75). Potential base.331.25+1.9% 300.5/308.75359.75/335.5
S X4Soybeans CBT (November 14)Oversold decline reverses.942.25+3.3% 9041089.25/999.75
SMZ4Soybean Meal CBT (December 2014)Oversold s-t decline reverses, finding support above the 2012 floor.308.9+3.4% 288.8/295.1398.3/366.6
BOZ4Soybean Oil CBT (December 2014)Ranging between the 50-day MA and Sept floor. Potential base? Tests the upper boundary.33.45+3.2% 31.5237.36/33.83
W Z4Wheat CBT (December 2014)Oversold fall from the 50-day MA slows.491.5+1.2% /591/579.25
QKX4Wheat LIFFE (November 2014)Counter move from oversold finds intraday resistance at 116.5; near the downtrend channel at the 50-day MA.113.5+1.8% 106.6124/120
CCZ4Cocoa NYBOT (December 2014)Pullback from the overbought contract high approaches Sept support; near the 200-day MA.3079+0.8% 2874/30193399
KCZ4Coffee NYBOT (December 2014)Overbought rally from the 200-day MA surges. Trades above the Apr peak (222.6) during Mon.220.8+6.9% 163.1/176.4249.65/243
CTZ4Cotton (December 2014)Recovery from the contract low. Probes the 50-day MA.64.38+3.1% 60.8378.74/69.14/68.48
LBX4Lumber CME (November 2014)Breaks s-t downtrend. Rallies strongly towards the Aug high.350.2+0.3% 318.2/325364.5/354.3
JOX4Orange Juice (November 2014)Pauses the downtrend. The 'Trough' KDR low (139.4) of 26 Sept holds.142.55+1.2% 125.9/139.4153.4/145.5
SBH5Sugar NYBOT (March 2015)Renews the recovery and probes the 50-day MA. Potential base.16.98+3.3% 15.51/15.8917.87


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