Soft Commodities

Discussion in 'Trading' started by PohPoh, Jan 8, 2009.

  1. Anyone notice that most softs look primed for upmoves?
    coffee, cocoa, sugar, cotton...

    I wonder if it's just a fakeout...
     
  2. I examine a series of futures charts. I notice a divergence in price curves of near and distant sugar futures prices.
     
  3. ....or a random correlation where they all happen to be at the top of their trading ranges. We'll see. :cool:
     
  4. what would that mean for the divergence?

    Say near is up but year ahead prices are going down, as well as vice versa??
     
  5. Il Principe

    Il Principe Guest

    For true commodities, you need to to really pay attention to the underlying SnD. Cocoa, for instance, is entering its 3rd consecutive crop yr of a supply deficit. Spreads are the preferred vehicle of all the major players(spec and non-spec), so right now everyone is long the front/short the deferreds.
     
  6. bighog

    bighog Guest

    and fat chicks need love, so the world keeps on turning.
     
  7. One possible interpretation is the price trend is changing.
     
  8. Attached is a corn futures price chart from year 2005. As of 29 August 2005 the price of a contract for delivery of corn in December 2006 shows an upward trend while the futures price of corn for delivery in December 2005 shows a downward trend. The multi year continuous futures price chart at the bottom shows what happened next. Corn futures price values began increasing and the big bull market in corn of year 2006 and 2007 followed.
     
  9. bighog

    bighog Guest

    FWIW, your charts about corn relative to the bull move is useless. Sardine traders know what a bull mkt is about and why. How relative were the previous crude oil charts when the price shot up to 145 a barrel?

    Loose, sloppy, hot money supersedes supply and demand everytime. Not to mention that grains are dependent on weather and there is a LEAD element involved.

    Grain mkts are tricky if one is not informed. ........................................... SOYBEANS: A drier weather outlook
    for Argentina coupled with bullish technical
    momentum propelled CBOT soybean
    futures to 3-month highs Friday. The market
    soared to new move highs, extending
    its recovery from a 5-month slide from alltime
    highs in July 2008. The market added
    risk premium as dry weather concerns in
    South America stoked fears of major
    drought damage to the Argentine soybean
    crop if the dry trend persists. As the dry
    forecast continues for Argentina, the market
    has found an underpinning force to
    keep upside momentum flowing, said Dan
    Cekander, analyst with Newedge LLC in
    Chicago. Technical buying played a key
    role in extending the market’s upside push,
    with bullish traders encouraged by most
    active contract’s ability to eclipse major
    moving average resistance. Nevertheless,
    legitimate fundamental support served as
    the dominate issue, with outlooks for a
    bullish slant in Monday’s U.S. Department
    of Agriculture crop reports adding strength,
    a cash connected CBOT floor broker said.
    CBOT March soybeans finished 46 1/2
    cents higher at $10.36.