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| 5 Hot Picks by Boyd Cruel of Alaron |
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 Boyd Cruel joined Alaron in 1996 and has been the firm's principal Soft Commodities analyst sine 1997. Boyd's highly regarded research and analysis covering the soft commodities -- coffee, sugar, cocoa and orange juice -- appears daily at www.alaron.com. The New York Board of Trade, the dominant exchange for soft commodity futures, also distributes his research reports both to private clients and industry professionals. A favorite of the financial press, Boyd has been quoted extensively in the Wall Street Journal, Futures Magazine, Investor's Business Daily and other financial publications.
Boyd works with individual clients, money managers and system developers, advising them and helping them to execute complex trading strategies. He is also part of Alaron’s Futures Training Division, which specializes in educating novice, intermediate, and professional traders.” |
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July Sugar pushed to a new contract low this month of 9.12. The market has been pressured by large supplies and weak demand. The Brazilian harvest, which has also limited the upside, has been progressing. However, we could see some technical short-covering as funds and specs are holding a large net-short position. I still like the idea of beginning to build a long position around 9.00 basis July. If we get a break below 9.00, we could push down to 8.40-8.50. This is the level I would be aggressively buying this market as this area is the 61.8% retracement level from the 2003 low and the 2006 high. Option traders should look at buying the July 900 or 950/call. |
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Earlier this month, cocoa prices pushed to 4-year high of 20.14 basis July. The market rallied to these levels on the strength of the British Pound and on talk that the Ivory Coast crop would come in smaller this year due to the lack of rainfall. It looks like we may have put in a top and we could start to see a larger retracement. The British Pound has dropped almost 200 points off its high and recent rainfall in the Ivory Coast could help the mid-crop. Arrivals in the Ivory Coast are above last year's number which dispels the notion of a significantly smaller crop. In addition, funds and specs are still holding a large net-long position, which could lead to more selling. Technically,
we could see July cocoa prices down to 1680-1700, which is right around the 61.8% retracement level. Look to sell futures between 18.50-18.80 or look to buy the July 1750 or 1800/put. |
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Cotton prices pushed down to a 6-month low last week as prices pushed below 50.00. We could begin to see some short-covering as this market is oversold. Our weekly export sales have been strong in the last few weeks. This could provide underlying support. Also providing underlying support will be the lower planting acreage for this market. Look to buy July futures around 49.50 or look to buy the July Cotton 51/call or the July Cotton 52/calls. |
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OJ prices continue to be undervalued at these lower levels. The July futures closed at 155.10 on Friday. Supplies remain tight in this market, which is why the cash market has a 60-70 cent premium over the futures market. Longer term, the next OJ crop will need to get through the hurricane season, which begins in June and runs through October. This year's crop was significantly smaller at 130.7 million boxes. Look to buy the July OJ 170/calls or July OJ 180/calls. |
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Corn prices rallied this week due to the heavy rains in the Midwest and due to plantings being behind schedule. Rain hit the Midwest last Wednesday which halted plantings. Corn plantings are already behind as last week's USDA Crop Progress Report showed plantings at 11% versus the 5-year average of 22%. The USDA's Crop Progress Report is released every Monday at 3pm CST. The slow pace of planting could lead to a shift of acreage from corn to beans. This would be friendly to the corn market, especially as the demand picture remains strong. Look to buy the July Corn 390 or 400/calls or look to buy the July Corn 390-430/call spread. |
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| 5 Hot Picks by Sterling Smith of FuturesOne |
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| Sterling Smith is developer and publisher of the FuturesOne Power Index, and a 15-year market veteran. Registered as a CTA he is a noted Coffee, Sugar and Cocoa analyst. Sterling works with clients of all sizes to help improve their trading. |
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Currencies & Dollar Index |
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The markets have reached spectacular highs and in the case of the US Dollar Index, major lows. While the trend has not changed just yet, I am notice an up tick in the size of the daily ranges the last couple of sessions which could be the sign of a trend change. Stay tuned as these can be huge trades. |
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Despite bullish fundamentals this market has some internal/COT issues right now and technical weakness is showing. Look for downside action here. |
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The chart daily chart pattern and the COT numbers have favorable construct at this time and I think we can be come more bullish has the week moves on. |
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Not breaking through 700 last week when we got close for the second time was not bullish. The chart pattern is looking rather heavy with resistance forming overhead at 700. Be wary of weakness showing up here as pullbacks could be very steep and rather severe. |
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This market finally took its long overdue correction, and we should expect a fairly firm bounce from these levels. |
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