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Commodities Daily Hotline
8 September 2014                             By Cornelia Dichio, Analyst
Chart of the day: Crude points to early-2014 lows

 

The price action in Oils has been somewhat erratic in recent sessions.  Take the Crude Oil instrument, for instance.  Recent at 96 caused a swift retracement on 2 September, only for the price to rebound up to that level the next day.  By the end of last week, the August floor at 92.50 was under scrutiny again. 

In the out of hours session, this contract was priced at 92.54 a short time ago, after dipping to 92.37 earlier.  This renewed the downtrend towards the early-2014 lows.

We continue to hold a short trade in Heating Oil in this sector.  This issue is reacting to downtrend resistance at the 50-day moving average.

Daily Comment:

 

Also in the Energy sector, the Natural Gas product has generated a bearish P&F Breakout signal.  This follows the fall through 3.80 on the automated scanner.

This Bar chart shows resistance arriving near the shorter-term MA line in late August.  However, it may not be prudent to open new shorts in view of the support nearby, from the July/August floor around 3.80.

In Friday's report, we delayed opening a short trade in Soft commodity, Lumber, while the 'bull trap' reaction was probing minor support along 338.  With that out of the way, the position was established for the downside scope towards 320, and possibly the 300 region after that.  The stop is placed at 356 for now.

In the Grains sector, Corn has registered a 2.7% gain for Friday's session.  Having become oversold (see recent low level of the RSI), the price has paused the decline after a new contract low at 343.75.  We remain short, with the stoploss over the 50-day MA, at 390.

Cow instruments have continued their short-term rallies with the Feeder Cattle issue edging up to a new contract high on Friday.  We would point out that the RSI is indicating the onset of an overbought state, increasing the risk of a corrective phase before long.

The Live Cattle contract probes its July barrier at 160.75; and the RSI is in overbought territory.  Therefore, a correction cannot be ruled out here too.

Also in the Meats sector, the Lean Hogs issue extends its recovery from the oversold August low near 90.  Recording a 2.9% gain, the price challenges potential resistance from the sideways area along 105.

 

Gainers / Losers
Top 5 Gains.
SymbolStockClose% Change
C 1Corn CBT 1st Month Continuation346.5+3.2%
LH2Lean Hogs CME (cont)95.45+3.2%
LH1Lean Hogs CME 1st Month Continuation105.625+2.9%
LHV4Lean Hogs CME (LH Oct 2014)105.625+2.9%
C Z4Corn CBT (December 14)356+2.7%
Top 5 Losses.
SymbolStockClose% Change
LBX4Lumber CME (November 2014)332.1-2.4%
LB2Lumber CME (cont)332.1-2.4%
COFFCoffee2.5625-2.3%
KC1Coffee NYBOT 1st Month Continuation192.85-2.3%
KCZ4Coffee NYBOT (December 2014)198.05-2.2%
 
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 19575 -2.61% 17400
Commodities Model Portfolio Shorts
Date Stock Code Type Open Price Current Price % P&L Stop Comment
21 Aug 2014 Gold CMX (Oct 14) GCV4 Short 1284 1266.3 +1.38% 1280
2 Sep 2014 Heating Oil NYME (October 2014) HOV4 Short 281 281.92 -0.33% 295
3 Sep 2014 Corn CBT (December 14) C Z4 Short 352 356 -1.14% 390
3 Sep 2014 Wheat CBT (December 2014) W Z4 Short 549 535.25 +2.50% 600
4 Sep 2014 Sugar NYBOT (October 2014) SBV4 Short 15.45 15 +2.91% 16.5
5 Sep 2014 Lumber CME (November 2014) LBX4 Short 338 332.1 +1.75% 356
  • The stop on the Sugar short is lowered.

 

Daily Analysis

Symbol Name Comment Close 1 day Support Resistance
CRYCRB Index NYFEReasserts the downtrend from this year's earlier top.288.02-0.2% 279.392/286.777300.384/292.763
CLV4Crude Oil NYME (October 14)Volatile. Resistance at 96 reverses the rebound of 3 Sept. Retests the Aug floor.93.29-1.2% 90.54/92.597.75/96
XBV4Gasoline RBOB NYME (Oct14)Volatile. Jumps from Aug support to resistance near the 50 and 200-day MAs, which holds.258.34-0.6% 246.46/251.86266.34
HOV4Heating Oil NYME (Oct 14)Volatile. Maintains downtrend resistance at the 50-day MA.281.92-0.6% 259.87/275.95292.75/289.05
NGV4Natural Gas NYME (Oct 14)Failed break over 4. 'Bull trap' scope to the Jul/Aug floor.3.793-0.7% 3.589/3.744.464/4.164/4.101
QZZ4Coal (Dec 14)Falls from downtrend resistance near the 50-day MA to the early-2014 floor. RSI oversold.56.5-0.4% 56.0862/60.4/60.02
GCV4Gold CMX (Oct 14)Holds the downtrend towards the early-June floor.1266.3+0.1% 1241.21325.4/1296.4
PAZ4Palladium NYME (Dec 14)Finds uptrend support at the 50-day MA. Points back to the 'Peak' KDR of 2 Sept.891.45+0.1% 839.1/865.75913
PLV4Platinum NYME (October 14)Maintains the oversold fall towards the Apr low.1411+0.2% 1379.7/1392.31488.5/1431.3
SIZ4Silver CMX (December 2014)Holds the s-t downtrend towards the May floor. RSI oversold.19.156+0.1% 18.721.67/19.95
LMAHDS03Aluminium HG LME 3mHolds the uptrend towards the late-2012/early-2013 ceiling.2093-0.6% 1904.25/19672184/2119.5
LMCADS03Copper Grade A LME 3mFinds resistance beneath sideways trading near 7200.6975+0.6% 6614.75/68217220/7108.75
LMPBDS03Lead LME 3 MonthsFalls to s-t range support near the 50-day MA.2204-1.0% 2170.5/21972499/2329/2307
LMNIDS03Nickel LME 3 MonthsRallies in range forming beneath the May peak. Questions top theory.19575+0.9% 15695/1770021625/20495
LMSNDS03Tin HG LME 3 MonthsFalls to the Jan low. RSI oversold.21450-0.2% 20950/2130023849/23070
LMZSDS03Zinc Special HG LME 3 MonthsRallies from support by the 50-day MA to test the July high.2394-0.2% 2261.5/23312539.5/2416
FCV4Feeder Cattle CME (October 2014)Edges over the Jul ceiling to a new contract high.224.375+1.1% 194.025/205.7224.35
LCV4Live Cattle CME (Oct 14)'Bear trap' recovery continues to the Jul highs. RSI overbought.159.75+1.7% 140.55/144.225160.75
LHV4Lean Hogs CME (Oct 14)Recovery from oversold.105.625+2.9% 90.45118.35
C Z4Corn CBT (December 14)Oversold fall pauses.356+2.7% 343.75?395.75/381
O Z4Oats CBT (December 14)Extends the broad trading band.345+1.2% 311.5/336.75361.75
IJX4Rapeseed LIFFE (November 14)Ranging below resistance at the 50-day MA and 'Peak' KDR of 29 Aug.325.25+0.6% 300.5/318359.75/335.5
S X4Soybeans CBT (November 14)Pauses the oversold downtrend.1021.5+1.8% 1001.25?1118.75/1089.25
SMZ4Soybean Meal CBT (December 2014)Extends the range forming near the l-t sideways area around 340.349.1+2.2% 337.1398.3/366.6
BOZ4Soybean Oil CBT (December 2014)Holds the oversold decline near the contract low.32.48+0.8% /37.36/33.71
W Z4Wheat CBT (December 2014)Falls from resistance at the 50-day MA out of the s-t range to a new contract low.535.25+0.9% /591/579.25
QKX4Wheat LIFFE (November 2014)Renews the downtrend to fresh lows.119+0.3% /126.3/124
CCZ4Cocoa NYBOT (December 2014)Corrects from overbought. Breaks s-t uptrend support at the 50-day MA.3102-1.0% 30453300
KCZ4Coffee NYBOT (December 2014)Rally from support at the 50-day MA pauses by resistance at the Aug high.198.05-2.2% 163.1/182.85222.6/211.1
CTZ4Cotton (December 2014)Recovery from the oversold contract low finds resistance near the 50-day MA.64.31-1.7% 62.0278.74/69.14
LBX4Lumber CME (November 2014)Failed break over the Apr-May ceiling (bull trap). Breaks minor support at 338.332.1-2.4% 298/318.2354.3
JOX4Orange Juice (November 2014)Potential base.149.05+0.3% 141.35155.95
SBV4Sugar NYBOT (October 2014)Renews the downtrend to a new contract low.15-0.9% /17.44/16.05


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