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Commodities Daily Hotline
16 May 2016                             By Cornelia Dichio, Analyst
Chart of the day: Soybean Oil tests support...

 

In the Grains sector, the price of the Soybean Oil instrument has backed away from the small top area to probe recent support at the 200-day Moving Average near 32.  A sustained fall under that level would renew the decline from the April peak towards the early-March low at 30.33.  We will consider selling such a breakout (through 32).

Daily Comment:

 

Also in the Grains sector, the MATIF Wheat contract has produced a bullish P&F Breakout signal at 167.75 on the automated scanner.  It is true that the price develops support at the lows of the short-term range, around 165.  Nonetheless, a sustained push over 175 would be required to indicate a base breakout.  At present, we would prefer to wait for a move to 176 before considering longs.

The CBT Wheat issue has rebounded from prior support at the March/April floor to reverse the correction from overbought.  In the event of a better recovery, next chart resistance is at 497; the 28 April high.

In Softs, the Rubber instrument lost 6.2% on Friday.  The correction from overbought started when resistance was encountered at the early-2015 top mostly evident above 200.  Now, the pullback is becoming oversold; near potential support from the September 2015 to early-March 2016 base area beneath current levels.  The first two support points should the price fall within that pattern are at 153.4 and 139.

Also in this sector, the Palm Oil instrument shed 2.7% before the weekend.  The uptrend is faltering beneath the 2014 peak area.  In the event of a deeper correction, the large base starting near 2400 may cushion downside risk.

In Meats, the Cattle issues found intraday support at 142.875 for Feeder and 121.2 for Live.

The former had been retracing the recovery from the oversold contract low, at 138.1, after finding resistance at 152.2.  Despite the intraday bounce, it remains to be seen whether Feeder Cattle has entered a basing phase.

The Live Cattle price has bounced from the 50-day MA to reassert the recovery to resistance at the 11 April high at 124.9.  Note that barrier is reinforced by the presence of the 200-day MA.  A clearance could renew the rally towards the March peak at 131.35, though one noted (minor) resistance beforehand at 126.35. 

Also in this sector, the Lean Hogs instrument continues to encounter resistance at the March high at 83.975.  Still, the short-term uptrend from the April low remains intact; and we watch to buy a breakout, which should spur the price on to new contract highs.

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
O 1Oats CBT 1st Month Continuation195.25+8.5%
O 2Oats CBT (cont)206.75+7.8%
LH1Lean Hogs CME 1st Month Continuation81.95+6.5%
W 1Wheat CBT 1st Month Continuation474.75+3.5%
W 2Wheat CBT (cont)484+3.4%
Top 5 Losses.
SymbolStockClose% Change
JN1Rubber TCM 1st Month Continuation164-6.2%
KO1Palm Oil 1st Mth Continuation2604-2.7%
NG1Natural Gas NYME 1st Month Continuation2.096-2.7%
NGM6Natural Gas NYME (June 16)2.096-2.7%
QC3Cocoa LIFFE (cont)2135-2.5%
 
The Commodities Model Portfolio
Commodities Model Portfolio Longs
Date Stock Code Type Open Price Current Price % P&L Target Stop
13 Apr 2016 Zinc Special HG LME 3 Months LMZSDS03 Long 1881.5 1889 +0.40% 1770
19 Apr 2016 Natural Gas NYME (June 16) NGM6 Long 2.188 2.096 -4.20% 1.9
26 Apr 2016 Gasoline RBOB NYME (June 2016) XBM6 Long 157.23 158.82 +1.01% 135
10 May 2016 Rapeseed LIFFE (August 16) IJQ6 Long 368.5 371.25 +0.75% 355
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Target Stop
21 Apr 2016 Coffee NYBOT (July 2016) KCN6 Short 124.1 130.1 -4.83% 133
  • We watch to buy Lean Hogs and MATIF Wheat; and sell Soybean Oil (Chart of the Day).

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEReasserts the s-t rally to the late-Nov high (186.338); and 200-day MA.182.548-0.6% 164.712/171.585198.318/186.338
CLN6Crude Oil NYME (July 16)Reasserts the advance to the late-Nov high (48.35).46.21-1.0% 37.5/39.852.25/48.35
XBM6Gasoline RBOB NYME (June16)Strongly reasserts the s-t rally to the early-Dec high (162.85).158.82+0.3% 137.22/141.54173.11/162.85
HON6Heating Oil NYME (July 16)Reasserts the s-t rally after correcting from overbought. Retests resistance at the 200-day MA.140.31+0.7% 110.75/119.7153.38/142.35
NGM6Natural Gas NYME (June 16)'Bull trap' pullback yields to ranging above the floor of the mid-Mar/mid-Apr range.2.096-2.7% 1.844/1.9482.413/2.331/2.304
QZN6Coal (July 16)Pauses the fall near the contract low.43.630.00% 44.7545.3
GCM6Gold CMX (Jun 16)Pullback from the Jan 2015 peak (1309) slows slightly above potential support from the 50-day MA.1272.7+0.1% 1071.8/1192.11350.2/1327.5/1309
PAM6Palladium NYME (Jun 16)Rebound from the 50-day MA pauses.592.4-0.7% 533/593/576708.95/636.1
PLN6Platinum NYME (July 16)Ranging by resistance near the late-June 2015 high (1094.5) and 'Peak' KDR (1092.3) of 3 May.1052.1-0.2% 971.2/1000.31121.4/1094.5
SIN6Silver CMX (July 2016)Reasserts the correction from overbought.17.132+0.2% 14.83/16.8?18.485/18.06
LMAHDS03Aluminium HG LME 3mCorrection from overbought continues towards the Mar/Apr lows.1535.5-0.6% 1475/1495.51686/1582
LMCADS03Copper Grade A LME 3mHolds the retreat from the Mar ceiling (5131) towards the Feb low.4627.5+0.3% 44305356/5131
LMPBDS03Lead LME 3 MonthsDrops towards range support at the late-Feb/mid-Apr floor (1679).1710.5-0.0% 1588/16791895/1814.5
LMNIDS03Nickel LME 3 MonthsReasserts the pullback from overbought and the 200-day MA towards the Apr low (8245).8640+0.1% 7550/824510785/9700
LMSNDS03Tin HG LME 3 MonthsSharp fall from the Mar ceiling (17525) towards the large base.16655-0.1% 15160/16200/16300?18315/17651/17525
LMZSDS03Zinc Special HG LME 3 MonthsPauses the ranging advance from the 50-day MA.1889+1.0% 1715/18262117.5/1997/1958
FCQ6Feeder Cattle CME (August 2016)Retraces the recovery from the oversold contract low. Intraday support arrives at 142.875.146.25-0.7% 138.1156.425/152.2
LCM6Live Cattle CME (Jun 16)Finds intraday support at 121.2. Reasserts the recovery to resistance at the 11 Apr high (124.9); and 200-day MA.123.425+0.7% 113.9126.35/124.9
LHM6Lean Hogs CME (Jun 16)Continues to find resistance at the Mar high.81.95-1.3% 76.8/77.5583.975
C N6Corn CBT (July 16)Failed break under the late-Apr low. 'Bear trap' towards initial resistance (395.25).390.75+0.4% 358.75/368407.5/395.25
O N6Oats CBT (July 16)S-t fall from the overbought Apr high; near the 200-day MA, slows by the early-Mar low at 183.75 (also the contract low).195.25+1.8% 183.75241.25/224.75
IJQ6Rapeseed LIFFE (August 16)Reasserts the advance.371.25+1.0% 351.5/355.5383.5/376/372.25
S N6Soybeans CBT (July 16)Overbought advance slows.1065-0.7% 953.75/986.251109
SMN6Soybean Meal CBT (July 2016)Holds the overbought advance towards the late-Apr/Jun 2014 peak area.363-0.4% 291/308.4384.1
BON6Soybean Oil CBT (July 2016)Finds resistance at the small top area. Probes support near the 200-day MA.32.5-0.2% 30.33/32.0135.76/35.43
W N6Wheat CBT (July 2016)Reverses the correction from overbought near the Mar/Apr floor.474.75+1.4% 449.5518.5/497
QKX6Wheat LIFFE (November 2016)Ranging with a down bias towards the Mar floor.117.55+0.3% 113.5/115.5126.7/122.5
CCN6Cocoa NYBOT (July 2016)Extends the correction from overbought towards the Apr low.2967-1.8% 28523254/3120
KCN6Coffee NYBOT (July 2016)'Bear trap' recovery tests resitance at the Apr peak at 131.2; near the 200-day MA.130.1+0.0% 115.35/118.9138.2/131.95/131.2
CTN6Cotton (July 2016)Corrects from overbought towards the mid-Apr low.60.62-0.2% 59.1265.56/64.75
LBN6Lumber CME (July 2016)Overbought rally pauses.320.5-0.5% 276.6/293.6331.2
JON6Orange Juice (July 2016)Rallies back to the Dec-Apr ceiling around 150.145.35-1.1% 118.35/124155.95/150.6
SBN6Sugar NYBOT (July 2016)Holds the advance to the Jan 2015 high (17.24).16.74-1.4% 15.01/15.5518.64/17.24


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