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Commodities Daily Hotline
14 July 2014                             By Cornelia Dichio, Analyst
Chart of the day: Heating Oil probes l-t support

 

The move through 287 by Heating Oil on Friday generated a bearish P&F Breakout signal on the automated scanner.  This, less sensitive, graph displays the price retracing the recent small recovery to retest the long-term floor area around 285.  In the out of hours session, that sturdy looking platform is providing a lift once again, with this contract changing hands at 287.67 a short time ago.  Initial resistance is at 290.68, plotted on 10 July.  We would stand aside for the time being.

 

Daily Comment:

 

Also in the Energy sector, the Carbon Emission instrument has registered a 1.1% gain for Friday's session.  It would appear that the contract price is developing further uptrend support near the 50 and 200-day moving averages.

In Grains, the Soybeans contract has plotted a 'Dead' MA Crossover.  This feature is drawn just beneath the April-June top area.  After falling out of the top, the price of this issue declined in a persistent manner.  Now, support at the floor of the early-2014 base, at 1088.25, has yielded.  We would point out, though, that the RSI is in a deeply oversold position.

The DJ UBS Agriculture Index reflects the current weakness in many contracts in the sector.  The index has now broken early-2014 support, with the fall through 67 producing a 'Bear' P&F Breakout signal.  However, a recovery attempt before long would not be surprising, given the extremely low level of the RSI, confirming that the short-term decline is oversold.

In Softs, the Sugar instrument has continued its descent from the medium-term top formation.  The RSI is falling towards oversold levels.  Therefore, with the risk of a counter move increasing, we lower the stop on the short trade to 17.30 (just over yesterday's high).  This action locks in a profit. 

Also in the Softs sector, Orange Juice fell back to the early-July oversold low on Friday, where intraday support arrived ('thin lower tail' on the last candle shows this).  Perhaps the contract price is starting to base following the late-June slump.  A clearance of resistance near the 200-day MA would add weight to this theory.

In Meats, one notes that the Cattle contracts extended their correction from the overbought contract highs on Friday.  However, intraday support was apparent at the daily lows, at 146.575 for the Live Cattle issue shown here, and 207.65 for the Feeder Cattle instrument.  In both cases, support could be developing above the uptrend channel as delineated by the 50-day MAs.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
JO1Orange Juice 1st Month Continuation149.65+3.1%
XAUPHLX Gold & Silver Index104.072+2.3%
LMZSDS03Zinc Special HG LME 3 Months2303+1.4%
MO1Carbon Emission (Cont)5.74+1.1%
MOZ4Carbon Emission IPE (Dec 2014)5.76+1.1%
Top 5 Losses.
SymbolStockClose% Change
W U4Wheat CBT (September 2014)526-4.1%
W 1Wheat CBT 1st Month Continuation514.75-4.1%
W 2Wheat CBT (cont)526-4.1%
S 2Soybeans CBT (cont)1195.75-3.0%
SM1Soybean Meal CBT 1st Month Continuation421.8-2.9%
 
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 19380 -3.58% 17400
24 Jun 2014 Lean Hogs CME (LH Aug 2014) LHQ4 Long 131.075 128.675 -1.83% 122.5
27 Jun 2014 Cocoa NYBOT (September 2014) CCU4 Long 3120 3090 -0.96% 2950
1 Jul 2014 Platinum NYME (October 14) PLV4 Long 1496.8 1513.8 +1.14% 1450
2 Jul 2014 Aluminium HG LME 3m LMAHDS03 Long 1923 1941 +0.94% 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 17.07 +2.51% 17.3
10 Jul 2014 Coffee NYBOT (September 2014) KCU4 Short 166 161.4 +2.77% 190
  • The stop is tightened on short Sugar.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFETop heavy. RSI oversold.297.074-0.9% 279.392/290?321.36/313.271
CLQ4Crude Oil NYME (August 14)Corrects from overbought. Breaks early-Jun support (100.93).100.83-2.0% 97.3107.45
XBQ4Gasoline RBOB NYME (August 14)Corrects from the overbought contract high. Tests early-June support.290.85-1.7% 282.44/288.87311.93
HOQ4Heating Oil NYME (August 14)Retests the Aug 2013/Jun 2014 floor, around 285.286.09-1.1% 278.03/283.19/284.2307.83/290.68
NGQ4Natural Gas NYME (August 14)Fall from the m-t top becomes oversold.4.146+0.6% 3.921/4.0614.893/4.608
QZQ4Coal (August 2014)The oversold June low holds.60.62+0.1% 59.4366.05/61.7
GCQ4Gold CMX (Aug 14)Renews the rally towards the Mar high. RSI overbought again.1337.4-0.1% 1234.5/1305.041392
PAU4Palladium NYME (Sep 14)Holds the overbought s-t rally by the contract high.875.3+0.2% 796.6/806.35/
PLV4Platinum NYME (October 14)Renews the rally towards the Aug 2013 peak.1513.8-0.2% 1422.6/1492.41549.9/1523
SIU4Silver CMX (September 2014)Renews the rally within the Feb/Mar peak area. RSI overbought again.21.461-0.2% 18.65/20.7622.16/21.79
LMAHDS03Aluminium HG LME 3mHolds the advance towards the mid-2013 high.1941+0.8% 1836/18701981
LMCADS03Copper Grade A LME 3mOverbought rally shows a loss of momentum by prior resistance at the Feb high.7156-0.1% 6513.25/6614.757460/7220
LMPBDS03Lead LME 3 MonthsS-t rally yields to ranging below the Jan high.2206+0.7% 2151/2170.52289/2230.25
LMNIDS03Nickel LME 3 MonthsPauses the rally from the 'Trough' KDR of 25 June below the May highs.19380+0.7% 15695/1770021625/20495
LMSNDS03Tin HG LME 3 MonthsRetraces the recovery to retest the 'Trough' KDR of 30 Jun.22100+0.2% 21300/21724/2185023849/23070
LMZSDS03Zinc Special HG LME 3 MonthsReasserts the overbought rally.2303+1.4% 1937/20102539.5/2318.5
FCQ4Feeder Cattle CME (August 2014)Corrects from the overbought contract high. Intraday support is noted at 207.65.210.375-0.1% 204.85/212.15219.65
LCQ4Live Cattle CME (Aug 14)Unwinds from the overbought contract high. Intraday support arrives at 146.575.149.125+0.7% 144156.5
LHQ4Lean Hogs CME (Aug 14)Pauses the uptrend. Probes the 50-day MA.128.675+0.6% 123.725/126.075133.375
C Z4Corn CBT (December 14)Drops to a new contract low. RSI oversold.384.75-2.0% /458.75/447.75
O Z4Oats CBT (December 14)Extends the range that has been in force for most of the year.326.5-1.4% 311.5361.75
IJQ4Rapeseed LIFFE (August 14)Oversold decline. Some intraday support arrives at the latest contract low.331.25-0.7% 326.25?364/355.75
S X4Soybeans CBT (November 14)Oversold fall continues past the floor of the early-2014 base (1088.25).1075-1.6% /1246.25
SMZ4Soybean Meal CBT (December 2014)Extends the oversold fall.345-1.4% 337.1398.3
BOZ4Soybean Oil CBT (December 2014)Oversold fall continues to a new contract low.36.96-1.7% /43.08/41.4
W U4Wheat CBT (September 2014)Extends the oversold decline to a new contract low526-4.1% /607/597.5
QKX4Wheat LIFFE (November 2014)Oversold decline continues to a new contract low.130.55-1.2% /144/139.5
CCU4Cocoa NYBOT (September 2014)Holds the uptrend near the highs.3090+0.3% 2861/
KCU4Coffee NYBOT (September 2014)Renews the downtrend on the break of support at the 200-day MA.161.4-1.0% 138.25199.75/184.9
CTZ4Cotton (December 2014)Extends the oversold fall past the June 2012 floor (68.25).68.12-0.6% /84.74/78.74
LBU4Lumber CME (September 2014)June recovery yields to ranging between the 50 and 200-day MAs.333.9-1.5% 293/330354.6/349.3
JOU4Orange Juice (September 2014)Finds intraday support at the early-Jul oversold low. Potentially basing.149.650.00% 141.5/145.55167.65/152.4
SBV4Sugar NYBOT (October 2014)Extends the fall from the late-Feb/early-Jul top.17.07-1.3% 16.3618.91/17.78?


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