Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the June contract are trading below their 20 day but barely over their 100 day moving average continuing its sideways pattern settling last Friday in New York at $1,204 an ounce while currently trading at the identical price unchanged for the trading week as the chart structure is starting to improve on a daily basis as prices have gone nowhere in recent weeks. The U.S dollar was down over 200 points for the trading week helping support the precious metals but the real breakout does not occur until prices break above $1,225 or on the downside around $1,180 as I do think a breakout is in the cards. The S&P 500 is down 25 points this Friday afternoon which generally sends money back into the precious metals, however in the old days gold would have reacted much more bullish than today’s trading action which has to be concerning if you are bullish as this market remains weak with no trend in sight so avoid as I want to look at other markets that are beginning to trend as choppy markets are extremely difficult to trade successfully. As a trader you must be patient and that means that there are periods of time when very little trading occurs so wait for the special situations to develop in my opinion as their generally are several markets that are always trending at the same time, but the gold market remains choppy at least in the short term as the U.S dollar still remains in a long term secular trend in my opinion despite this week’s sell off.
TREND: MIXED
CHART STRUCTURE: SOLID

Oat Futures

Oat futures in the May contract are up 3 cents at $2.62 a bushel this Friday afternoon in Chicago down about 4 cents for the trading week as I do think prices will retest the contract low also the 4 year low at 2.54 as I’ve been recommending a short position when prices broke the 2.70 level and if you took that trade place your stop loss above the 10 day high which currently stands at 2.75 risking around $.13 or $600 per contract plus slippage and commission as the chart structure is outstanding at the current time. The reason I have been recommending this trade is because it meets my criteria as the risk/reward is excellent so continue to play by the rules and take advantage of any rallies while maintaining the proper stop loss as prices are still trading below its 20 and 100 day moving average continuing the bearish trend following the wheat market which is right near contract lows once again as I’m also recommending a short position. If you have been following any of my previous blogs I’m currently short soybeans, wheat, oats, and soybean meal as prices have been choppy while the chart structure has improved tremendously in the last several days so continue to play grains to the downside and especially the oat market in my opinion.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Natural Gas Futures

Natural gas futures in the May contract were down 5 points this Friday afternoon currently trading 2.63 as I’ve been recommending a short position from around the 2.60 level and if you took that trade the chart structure is outstanding at the current time place your stop loss above the 10 day high which currently stands at 2.71 risking 8 points or $200 per mini contract or $800 per large contract plus slippage and commission as I remain bearish. Natural gas futures are trading below their 20 and 100 day moving average telling you that the trend is lower as traders are keeping an eye on the weather as that can dictate short-term prices as yesterday storage report showed a bigger build in supplies which was more than expected but that has already been reflected in the current price in my opinion, however the chart structure is outstanding while meeting my risk/reward criteria so continue to play this to the downside as we are just eyelash away from getting stopped out which is always a positive in my opinion, because of the fact that lowers monetary risk and that’s what trading is all about.
TREND: LOWER
CHART STRUCTURE: OUTSTANDING

If you are looking for a futures broker feel free to contact Michael Seery at 800-615-7649 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Coffee Futures

Coffee futures in the July contract are trading at their 20 day but still below their 100 day moving average still stuck in a 6 week consolidation settling last Friday in New York at 137.85 while currently trading at 140 up over 200 points for the trading week as a breakout is looming in my opinion. I do think prices are bottoming as the bear market has probably come to an end as I do think as we head into the frost season in Brazil that prices will breakout to the upside, however I’m still sitting on the sidelines waiting for a breakout above 150 to the upside or to the downside around 135 so be patient as something should occur in the next couple of days in my opinion. Coffee prices traded above 220 just 6 months ago that’s how far prices have come down as everything does come to an end and I certainly do like the chart structure as its outstanding and I will write my consolidation rule below as breakouts can be very powerful the longer the consolidation develops.
TREND: MIXED
CHART STRUCTURE: OUTSTANDING

Soybean Meal Futures

Soybean meal futures in the May contract are up $3 a ton currently trading at 315.50 as I’ve been recommending a short position from around this price level and if you took that trade place your stop loss in Monday’s trade at the 10 day high at 326 risking around 1100 points or $1,100 per contract plus slippage and commission. Soybean meal futures rallied around 600 points for the trading week as were starting to enter the volatile spring planting season where prices will have large trading ranges on a given day but prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside so take advantage of any rallies as I’m a trend follower despite the last couple of days to the upside so I’m sticking to my guns and remain short as the chart structure will start to improve on a daily basis starting on Tuesday therefore lowering monetary risk. Soybean meal futures have been the leader in the soy complex over the last several years, however oversupply issues are starting to put pressure onto this market as the path of least resistance is to the downside so let’s see what Monday’s trade will bring as we are just eyelash away from getting stopped out in soybeans and soybean meal as the stops are extremely close due to the fact that prices have consolidated over the last 5 trading sessions. The U.S dollar was down over 200 points for the trading week helping support grain prices and soybeans as well finishing higher for the 4th consecutive trading session also helping push soybean meal prices to the upside but weather is now the main concern as that will be the key factor on where prices head in the next several months.
TREND: LOWER
CHART STRUCTURE: IMPROVING

Cattle Futures

Live cattle futures in the June contract are trading at their 20 and 100 day moving average settling last Friday in Chicago at 148.80 while currently trading at 151.60 up around 300 points for the trading week remaining in a choppy trend. Prices rallied about 400 points from Monday’s low when prices hit a 3 week low as I’m still sitting on the sidelines as a speculator, but I’m definitely telling producers to look at the 144 October put options as some type of hedge against falling prices therefore helping to protect your livelihood as volatility in this market is extremely high with large price swings up and down. If prices break 148 I would be suggesting a short position placing your stop above the 10 day high as I still think prices have topped out as the differential in price levels between most commodities and cattle prices is at all-time highs as I think something is going to have to change and I think that’s going to be to the downside in cattle especially later in the year.

Feeder cattle Prices are trading below their 20 day but right at their 100 day moving average in the May contract still in a sideways and choppy pattern settling last Friday at 209.70 while currently trading at 213 up 300 points for the trading week as tight supplies continue to prop up prices here in the short-term. Volatility is extremely high and should be played with caution making sure that you risk 2% of your account balance on any given trade as you must always have some type money management strategy in my opinion.
TREND: MIXED
CHART STRUCTURE: SOLID

Orange Juice Futures

Orange juice futures are trading below their 20 and 100 day moving average telling you that the trend is to the downside as volatility in this commodity has exploded in recent weeks as I was short orange juice for quite some time getting stopped out several weeks ago as prices topped out at the 130 level currently trading at 115.70 settling last Friday at 114.50 slightly lower for the week possibly developing a bottoming pattern. The trend in orange juice in my opinion is mixed as I think you should avoid this market at the current time and wait for better chart structure before entering into a trade and that might take several weeks as the soft commodities as a whole have started to rally as the bear markets may have ended in the short term, but this market has no trend and I try to avoid choppy markets and look for markets that are beginning to trend either hitting a 4 week high or low before entering.
TREND: MIXED
CHART STRUCTURE: POOR

Cotton Futures

Cotton futures in the June contract are trading right at their 20 day but still above their 100 day moving average after hitting a 6 month high in last week’s trade, however I have been sitting on the sidelines in this market for quite some time as the chart structure remains poor in my opinion as the risk is too high and does not meet my criteria to enter into the trade. Cotton futures settled last Friday at 65.40 while currently trading at 63.85 down about 150 points in a relatively nonvolatile trading week as planting is underway in the southern part of the United States as we are not expecting a record crop due to less acreage in 2015 as volatility will come back into this market as we enter the summer season. I am certainly not recommending any type of short position as the trend is to the upside as these are historically low prices especially entering the highly volatile summer season so wait for better chart structure to develop lowering monetary risk so be patient in my opinion.
TREND: HIGHER
CHART STRUCTURE: POOR

Corn Futures

Corn futures in the July contract finished up over 3 cents this afternoon in Chicago currently trading at 3.87 a bushel finishing up about 7 cents for the trading week as I’m currently sitting on the sidelines in this market as the trend remains choppy over the last three months with major support at 3.75 as a true trend will not develop until that level is broken and on the upside above 4.23 so avoid this market at the current time and look for other markets that are beginning to trend. The weather here in Illinois is outstanding as we are right near the 80 degree level with dry conditions as it certainly looks to me that planting will be in full swing come next week as estimates are around 6% planted come Monday’s crop report as there is very little fundamental news to dictate short-term price action at the current time. Volatility in corn certainly will increase in the next several weeks as we enter the critical growing season so make sure you place the proper amount of contracts risking 2% of your account balance as this market is trading right in the middle of its four month trading range. Corn prices are trading below their 20 and 100 day moving average as we are trading at the lower end of the recent 6 month trading range as prices look bearish in my opinion but I want to see a breakout occur before I jump the gun so be patient as this could happen in next week’s trade.
TREND: LOWER
CHART STRUCTURE: POOR

What is the difference between old crop & new crop in the agricultural commodities?

When analysts and traders talk about agricultural commodities such as soybeans & corn the one thing they generally mention is old crop versus new crop and that might confuse some beginners on what exactly is the difference. I will keep it simple because the only difference between old crop and new crop is that old crop in soybeans is any month other than November as an example is March or May and all months that were grown last year while the new crop is the November soybeans and will be harvested this October of 2015 and will be grown this summer. That’s why sometimes there is a price difference between the old crop and the new crop because of the fact that this year’s harvest in soybeans could be as high as 4.2 billion bushels pushing prices lower in the November contract as old crop and new crop can also have different carryover levels or supply levels. Old crop corn is any month other than the December contract while the new crop is only the December contract which will be grown this summer and harvested in October and sometimes there’s a price difference between old crop and new crop as well because as we will be harvesting around 13.5 billion bushels in October which is the reason why the December corn can be lower than the May corn because that was old crop which was harvested last October also having different supply situations. Many of the agricultural commodities are affected by old crop & new crop including the grains, meats, coffee, and cotton so if you need help understanding which month you should be trading feel free to give me a call at any time & I will be more than happy to make sure that you are trading the correct month.