Will The Futures Market Heat Up?

Pure Fuel Futures

Pure gasoline futures within the March contract are at present buying and selling at 2.44 after settling final Friday at 2.69 persevering with its bearish momentum. Forecasts for hotter U.S. climate will curb heating demand for nat-gas proceed to weigh on nat-gas costs.

On Thursday, the Climate Commodity Group mentioned that the U.S. South and Midwest ought to see higher-than-normal temperatures predominantly over the following 2 weeks and that prior forecasts for a polar vortex within the Arctic to drop down into the U.S. later this month isn’t going to materialize. I am not concerned as I hold an in depth eye on a potential counter-trend commerce. I feel the spike backside, which was created on December 28th across the 2.26 stage, will maintain as a potential Head Shoulders backside sample may very well be forming, in my view.

Pure gasoline costs are buying and selling beneath their 20 and 100-day transferring common as this pattern stays decrease to uneven. Nonetheless, I feel this commodity will be a part of the remainder of the power sector to the upside; it is only a matter of when the chance/reward will grow to be extra in your favor, particularly if cheaper costs come about, so be affected person and sit on the sidelines.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Copper Futures

Copper futures within the March contract is at present buying and selling decrease by 260 factors at 3.6215 a pound after settling final Friday in New York at 3.6020, up about 200 factors for the week nonetheless caught in a decent 6-week consolidation sample.

Copper costs regularly bounce off the three.57 stage solely to rally each time, which occurred earlier within the buying and selling session. The chart construction is excellent; subsequently, the chance/reward is in your favor as we’re awaiting some contemporary information to push costs above the contract excessive, which was hit on January eighth at 3.7340 as I stay bullish.

Copper costs are buying and selling above their 20 and 100-day transferring common. The pattern stays to the upside because the housing market stays very sturdy; subsequently, demand for copper ought to proceed for the foreseeable future as I nonetheless suppose the 4.00 stage is within the playing cards within the coming weeks forward. The united statesequity market continues to hit all-time highs this week as copper costs have been using the coattails of that market. Nonetheless, it has stalled out in latest weeks as the whole treasured steel sector is taking a breather on the present time, however I see completely no cause to be brief.

TREND: HIGHER – MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Sugar Futures

Sugar futures within the March contract settled final Friday in New York at 16.45 a pound whereas at present buying and selling at 15.88, down about 57 factors for the buying and selling week as costs hit a one-week low. I’m now recommending a bullish place whereas putting the stop-loss below the December 15th low of 14.09. The chance is round $2,000 per contract plus slippage and fee as I wish to give this commerce some room as a result of growing volatility.

Sugar costs are nonetheless buying and selling above their 20 and 100-day transferring common because the pattern stays larger regardless of the latest setback. In case you check out the day by day chart, the uptrend line stays intact as I imagine the chance/reward stays in your favor to take a bullish place. Essentially talking, costs have underlying assist from Brazil’s dry situations that will curb sugarcane yields and scale back Brazil’s sugar manufacturing. Irregular rain in Brazil’s sugar-growing areas is retaining soil moisture ranges beneath regular. The U.S. Local weather Prediction Heart mentioned final Thursday {that a} La Nina climate sample would seemingly final at the least till March and presumably past, resulting in extended extreme dryness in Brazil that cuts sugarcane yields.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: HIGH

Espresso Futures

Espresso futures within the March contract settled final Friday in New York at 128.15 a pound whereas at present buying and selling at 125.00, down over 300 factors though costs hit a Four month excessive in final week’s commerce.

I’ve been recommending a bullish place from across the 127 stage. In case you took that commerce, proceed to position the cease loss below the September 4th low of 104.85 as an exit technique as the chance is round $10,000 per contract plus slippage and fee. This commerce ought to solely be taken with a big buying and selling account.

Espresso costs are nonetheless buying and selling above their 20 and 100-day transferring common because the pattern stays to the upside. Nevertheless, this market has been very cussed and has not established a robust pattern presently. After Conab, Brazil’s nationwide agricultural statistics company, costs have remained agency, forecast on Thursday that Brazil’s 2021 arabica espresso manufacturing will hunch -35.7% y/y to a 12-year low of 31.35 mln baggage. Conab mentioned espresso output would fall as Brazil’s espresso bushes are within the lower-yielding half of a biennial cycle. Inadequate rain in key phases of crop improvement exacerbates the decline in yields.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

Corn Futures

Corn futures within the March contract, which is taken into account the previous crop and was harvested final October, is at present buying and selling at 5.18 a bushel after settling final Friday in Chicago at 5.31 as costs are at a one-week low.

I’m not concerned, however I’ve had a bullish bias in direction of the grain marketplace for fairly a while. Nevertheless, I’m advising farmer shoppers to promote a few of their money crop as I feel costs are getting just a little lengthy within the tooth and benefit from this important rally, which is round 50% larger from the low which was hit on August 12th.

Corn costs are nonetheless buying and selling above their 20 and 100-day transferring common because the pattern is larger. In case you are lengthy a futures contract, I might proceed to position the cease below the 10-day low, which stands at 4.89 because the chart construction will enhance in Four buying and selling periods reducing the financial danger. I shouldn’t have any grain suggestions, however I additionally suppose that beans might have topped out as effectively. Nevertheless, I am actually not recommending any kind of brief place as I feel costs simply have to digest the run-up that we now have witnessed over the past a number of months.

Essentially talking, acreage estimates are starting to floor forward of the brand new crop planting cycle as IHS Markit raised their forecast for corn by 3.1m acres from the December forecast to 94.2m. The chart construction on the present time is enhancing as the usfarmer will definitely profit as costs are nonetheless proper close to a 7 12 months excessive as that it is a terrific factor to see because the farming group over the past a number of years has been depressed.

TREND: HIGHER – MIXED
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

Cotton Futures

Cotton futures within the March contract settled final Friday in New York at 80.70 whereas at present buying and selling at 81.90, up over 100 factors for the week, persevering with its outstanding, bullish momentum to the upside as costs are hovering proper close to a Three 12 months excessive. I’m not concerned on this market as costs have run away to the upside as a result of larger demand of becoming a member of most different agricultural markets.

Essentially talking, new crop cotton planted acres have been estimated to be 11.5 million by non-public agency IHS Markit as that was a 1.5m acre drop from their December forecast. In case you are lengthy a futures contract, I might proceed to position the cease loss below the two week low, which stands at 78.65 as an exit technique. Nevertheless, the chart construction will enhance in subsequent week’s commerce; subsequently, the financial danger can even be lowered because it appears to me that larger costs are forward. Bear in mind, if you commerce the commodity markets, buying and selling with the trail of least resistance is essentially the most profitable approach to go over time as selecting tops and bottoms are very troublesome and unsuccessful, in my view.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Cocoa Futures

Cocoa futures within the March contract is at present buying and selling at 2492 after settling final week at 2527, down barely for the week as costs have been caught in a 6-week consolidation sample in search of some contemporary elementary information to dictate short-term value motion.

In case you check out the day by day chart, costs rallied from $2,300 all the way in which to barely above the $2,800 stage in only a matter of weeks as costs are actually digesting that run-up, nevertheless it actually does look to me {that a} long-term backside has taken place. Cocoa costs had traded decrease for the third consecutive session blamed on when the European Cocoa Affiliation reported that This fall European cocoa grindings fell -3.1% y/y to 344,151 MT, an even bigger decline than expectations of -1.5% y/y and the weakest report for a fourth-quarter in Four years.

Cocoa costs are buying and selling barely beneath their 20 and 100-day transferring common as this pattern is blended. I shall be affected person and look ahead to a breakout to happen within the subsequent couple of weeks as you must keep in mind the longer the consolidation, the stronger the breakout as we may very well be concerned quickly.

TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: HIGH

What do I imply after I speak about chart construction and why do I feel it’s so essential when deciding to enter or exit a commerce? I outline chart construction as a sluggish grinding up or down pattern with low volatility and no chart gaps. Most of the nice developments that develop have superb chart construction with many low share day by day strikes over a course of at the least Four weeks thus permitting you to enter a market permitting you to position a cease loss comparatively shut as a result of small strikes thus lowering danger. Charts which have violent up and down swings aren’t thought of to have stable chart construction as I like to position my stops at 10-day highs or 10-day lows and if the charts have a decent sample that can enable the dealer to reduce danger which is what buying and selling is all about and if the chart has huge swings your cease shall be additional away permitting the opportunity of bigger financial loss.

In case you are in search of a futures dealer be happy to contact Michael Seery at 630-408-3325 and he shall be very happy that will help you together with your buying and selling or go to www.seeryfutures.com

Michael Seery, President
Seery Futures
Facebook.com/seeryfutures
Twitter–@seeryfutures
Telephone #: 630-408-3325
[email protected]

There’s a substantial danger of loss in futures, futures choice and foreign currency trading. Moreover, Seery Futures isn’t liable for the accuracy of the knowledge contained on linked websites. Buying and selling futures and choices is Not acceptable for each investor. My opinion on this weblog are for common info use solely and aren’t supposed as a suggestion or solicitation with respect to the acquisition or sale of any futures or choice contracts.