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Donna Heidkamp’s interests in the futures industry stems from strong family ties to production agriculture in Hereford, Texas. After completing a bachelor's degree in Agricultural Economics at Texas Tech University in 1995, Donna moved to Chicago to participate in the Chicago Mercantile Exchange Agricultural Broker Training Program. Since completing the training program in 1995, she has continued to gain a well-rounded knowledge of the industry by working as an order clerk, trading desk manager, and broker for RJO Futures. In 2004, Donna started a branch office of RJO Futures to focus her efforts on helping clients meet their trading goals. Donna’s
commentary can also be heard regularly on CNBC TV and Bloomberg.
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This market is at an extremely critical point, as it approaches a critical resistance point of 2420 from 2003. The fundamentals appear to remain bullish on a longer-term note, as a result of a very poor harvest and lack of enthusiasm for the quality of the mid-crop harvest coming up. The bullish consensus is at extreme levels for the cocoa as well. However, it is not wise to pick a top in the cocoa based solely on an extremely high bullish consensus number. If the market breaks below the 2340 area basis the May cocoa, I would look for a limited sell-off to the 2220 - 2260 area for a buying opportunity. | |
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Technically, cotton is at an extremely critical level. The fundamentals are definitely playing tug of war and are coming to a head! The world carryover stocks increased significantly from last month, coming in at 57.33 million bales versus 54.75 last month. In my opinion, the technicals are biased to an upside breakout -- due to the uncertainty of acreage planted next year. Also, much of the primary U.S. cotton growing areas in the south to southeastern U.S. are abnormally to exceptionally dry, according to February 5th U.S. Drought Index. Unless the weather patterns change, the dryness is going to become a bigger problem as we approach planting. Look to buy July
cotton on a close above 7325. | |
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We have seen tighter supplies over the past couple of weeks as a result of Mother Nature. Technically, the market is knocking on the door of a longer-term breakout to the upside. It is interesting to note that the natural gas is still a much less expensive form of energy, compared to crude-based products -- which is likely to increase demand longer term and support the market. Look to buy NG on a break near 760 or a close above 825 basis the March NG. | |
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| Is gold overbought? I have been watching this closely, trying to develop an opinion on it. Technically, the 922.5 area basis April gold is extremely critical. If this area holds, the market looks to be forming a head and shoulders formation -- which would be considered bearish longer term. I would only go short if the neckline of the head and shoulders breaks. | |
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You can call this a play on the corn market if you want. As time continues to decay and farmers are forced to make planting decisions, the corn market volatility will likely increase. The market is expecting a shift in acreage back to soybeans from corn this year. The "how much" question still remains to be answered. One thing to keep in mind is that many farmers planted corn on corn acreage the past couple of years and will need to shift to soybeans for rotation purposes. Technically, the longer term-trend basis the May feeder cattle is still pointing down. Therefore, I am looking to sell the May feeders on a break below 11100. | |
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Eric Reinholtz is a Senior Market Strategist with DAW Trading. Mr. Reinholtz relies heavily on his expertise in charting markets for his exact entry and exit scenarios. Mr. Reinholtz’s focus targets very realistic money-making strategies more so than cryptic buy & sell signals that can get flashy publicity, but have little to do with actual portfolio alignment. He believes a professional way of approaching the markets should emphasize scaling-in during serious purges (ideally after bases are built), and scaling-out gradually into strength (ideally into extended parabolic moves), happily not worrying about "milking" the last percent out of a move