Improving Global Demand Drives Futures Higher

Copper Futures

Copper futures in the December contract settled last Friday in New York at 3.0395 a pound while currently trading at 3.0700, up about 300 points for the trading week as prices are still right near a 2 year high.

I have been recommending a bullish position from around the 3.0140 level, and if you took that trade, continue to place the stop loss under the 10-day low, which stands at 2.9555. However, the chart structure will improve in 4 trading sessions; therefore, the monetary risk will be reduced. I also have a bullish platinum recommendation out of the precious metals. I think commodities are headed higher across-the-board due to strengthening demand improving worldwide. I will be looking at adding more contracts to the upside as the risk/reward remain in your favor because prices have gone nowhere over the last 3 weeks as. That situation is not going to last much longer as a breakout is looming, in my opinion.

Copper prices are trading far above their 20 and 100-day moving average as this trend is strong to the upside as fundamentally speaking, strong demand continues to propel prices higher.

TREND: HIGHER
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

Coffee Futures

Coffee futures in the December contract settled last Friday in New York at 132.45 a pound while currently trading at 113.90, down over 1800 points for the trading week as prices have now hit a 4 week low.

I do not have any soft commodity recommendations; however, I believe the multi-decade low that was hit on June 15th at 96.90 will hold as I will be looking at a bullish trade in the coming days ahead. The risk would be around $7,000, which is way too much, so be patient. I think a bottom has been formed, but the rain has come back into key coffee growing regions in Brazil, which has sent prices sharply lower here in the short-term.

Coffee prices are trading below their 20-day but still slightly above their 100-day moving average as the trend is mixed to lower, so be patient while trying to take advantage of these depressed prices, which this situation has become as I will not go short.

TREND: LOWER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Live Cattle Futures

Cattle futures in the December contract settled last Friday in Chicago at 109.90 while currently trading at 112.40 up about 250 points for the week as prices are right at a 4 week high.

I am keeping a close eye on a possible bullish position come next week as the 10-day low stands at 107.25, which is too much risk at this time. I will try to take advantage of a price dip to around the 111 area, then enter into a bullish position as the risk would be around $1,600 per contract plus slippage and commission.

In general, the commodity markets continue to move higher as all my recommendations are bullish as the grain market has caught fire over the last couple of weeks, and I think the livestock sector is going to start to follow. For the bullish momentum to continue, prices have to break the August 19th high of 114.02 in my opinion as that could happen in next week's trade as the volatility certainly will start to expand as we enter the highly volatile seasons of autumn and winter.

Cattle prices are trading above their 20 and 100-day moving average as the trend remains to the upside. If you take a look at the daily chart, we continually grind higher monthly as it looks to me that higher prices are ahead as I see no reason to be short cattle.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Wheat Futures

Wheat futures in the December contract settled last Friday in Chicago at 5.42 a bushel while currently trading at 5.75 as prices look to test the contract high, which was hit on March 31st at 5.77, in my opinion.

I have been recommending a bullish trade from around the 5.40 level and if you took that trade continue to place the stop loss under the 10-day low, which now stands are 5.33 as an exit strategy. However, the chart structure will not improve for another 8 trading sessions, so you will have to accept the monetary risk at this time. The grain market across the board has caught fire in recent weeks. I also have bullish recommendations in soybean and soybean meal while also having a bullish bias towards corn prices as demand has come back from China, so continue to play this to the upside.

The volatility will increase as we enter the autumn season as I think $6 is in the cards, possibly next week, so continue to play this higher as I will be looking at adding more contracts once the risk/reward becomes more in your favor. Wheat prices are trading above their 20 and 100-day moving average as this trend is higher as historically speaking, prices still look cheap.

TREND: HIGHER
CHART STRUCTURE: POOR
VOLATILITY: HIGH

Soybean Futures

Soybean futures in the November contract, which is considered the new crop will start to be harvested in the Midwestern part of the United States in the next couple of weeks, settled last Friday in Chicago at 9.96 a bushel while currently trading at 10.37 up over $0.40 hitting a 28-month high.

I have been recommending a bullish position from around the 9.14 level, and if you took that trade, continue to place the stop loss under the 10-day low, which now stands at 9.61 as an exit strategy. However, the chart structure will improve daily starting next week; therefore, the monetary risk will tighten up considerably. Fundamentally speaking, strong demand, especially from China, continues to propel prices higher. I see no reason to short the grain market as I also have bullish recommendations in wheat and soybean meal. I also think corn prices are headed higher.

Soybean prices are trading far above their 20 and 100-day moving average as this trend is strong. I think there's a possibility that prices could test the $11 level in the coming weeks ahead. It all depends on production numbers, which we will start to receive soon on early harvest results, so stay long as there is room to run.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

Soybean Meal Futures

Soybean meal futures in the December contract are trading higher for the 3rd consecutive session after settling last Friday in Chicago 324 a ton while currently trading at 340 up $16 week as prices have now hit a 2 year high.

I have been recommending a bullish position from around the 299 level. If you took that trade, continue to place the stop loss under the 10-day low, which stands at 313, as an exit strategy. However, just like soybeans, the stop loss will be raised significantly starting next week. Strong demand from China continues to push prices higher as I still think historically speaking, prices look cheap. If you have been following my previous blogs, you understand that I thought the 350 level could be touched, and I think that could happen in next week's trade, so stay long as the trend in the grain market is becoming stronger weekly.

Meal prices are trading far above their 20 and 100-day moving average as the trend is getting stronger and stronger every week, and if you take a look at the daily chart, it certainly doesn't look like any type of top has been formed just yet, so continue to play this higher.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: INCREASING

If you are looking for a futures broker feel free to contact Michael Seery at 630-408-3325 and he will be more than happy to help you with your trading or visit www.seeryfutures.com

Michael Seery, President
Seery Futures
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