St. LOUIS () -- Here's a quick wrap up of the commodities market by Dale Doelling, chief market technician of Trends In Commodities.
Doelling previously that grains are breaking out! Resource Investor did extensive coverage of the grains, most especially corn, at the this week in St. Louis.
Since early August, wheat is up 26%, corn is up 22% and soybeans are up 3%. Today, wheat is trading up 12 1/4 cents at $5.28 per bushel, corn is up 10 1/4 cents at $3.08 per bushel and soybeans are up 11 cents at $5.90 per bushel.
Although soybeans have lagged a bit, wheat and corn have been on a rapid uptrend since early August, becoming .
Doelling said he didn't have much of an opinion on the softs (FCOJ, cotton, coffee, sugar and cocoa), which have all trended lower since August.
"OJ peaked on August 17th and is significantly lower now ... cotton has developed a strong downtrend since the August 7th peak ... coffee topped out on August 23rd and is now approaching the September lows at around $1.00 ... sugar, after a strong move to the upside going into 2006, peaked in January and in now in a well-defined downtrend ... the cocoa market peaked on July 10th and has been moving lower ever since," said Doelling.
FCOJ is trading at 192.5 cents per pound; Cotton is trading at 48.95 cents per pound; Coffee is at 104.5 cents per pound; Sugar is trading at 11.17 cents per pound; Cocoa is trading at 1,420/metric tonne.
"There may be opportunities here so I'll look for signs of a comeback in the softs as we head into the end of the year," he said.
According to Doelling, the lumber is "the great leading indicator for the housing collapse," and has been entrenched in a downtrend since August 2004.
Lumber is currently trading at $260.30 per thousand board feet, and Doelling said, "there doesn't seem to be a bottom in this market."
As for the meats, Doelling "you never know what you're going to get."
Live cattle contracts for October delivery are currently priced at $88.20 per hundred weight, feeder cattle contracts are trading at $107.25 and lean hogs are at $65.20. Pork bellies are trading at 91.30 cents per pound. Only live cattle and pork bellies contracts are up from two months ago.
In the energy complex, Doelling said he likes natural gas over crude and unleaded gas and believes that a spread trade (long natural gas / short crude) is a valid play.
"The energies are a mixed bag as I believe natural gas is a 'buy' and crude oil and the distillates are a 'sell.'"
Natural-gas futures headed lower today, with its November contract down 10.2 cents at $5.68 per million British thermal units. Crude for November delivery was last trading up $1.34, or 2.3%, at $59.20 a barrel. November unleaded gasoline futures were last trading up 3.39 cents at $1.4848 a gallon and November heating oil rose 24.43 cents to $1.732 a gallon.
Although not yet trading on contracts, spot uranium is up to $56/pound after breaking $50 in early September. The price is on a "," according James Dines, Editor of The Dines Letter.
Doelling said precious metals will see at least a retest of the June lows.
"The precious metals are approaching a bottom but they may need to experience a washout before the final weak longs are forced to throw in the towel," said Doelling. "I believe there will be some major catalyst that will move the metals sharply higher before year's end."
However, he said that copper has been the strongest of these three markets and "it has not disappointed me."
"Although copper has been consolidating since July there has not been any serious technical damage to this market," said Doelling. "I continue to like copper for the long-term.
Gold for December delivery was up $10.30 at $590.60 an ounce, up around 2% from last Friday's close of $576.80. December copper rose 3.85 cents to $3.425 a pound, down 1% from last week. December silver adding 27 cents to $11.65 an ounce, about 4% above last week's Friday close.
January platinum was up $4.40 at $1,079 an ounce, slightly below last week's close. December palladium is up $7.90 at $315.80 an ounce, trading almost $15 above last week's level.
One area, not covered above is index futures and the interest rate futures.
Doelling said he's very bullish on bonds because they are the best leading indicator for the economy, "which is headed for a fall." In contrast, he said he's bearish on the stock index futures and believe that these markets will provide incredible profits for shorts sellers all the way into the 2008 elections.
"This, in my opinion, is going to be where all the money is made," he concluded.
