Today in Commodities: A Push Higher

News of further bailouts in Europe goosed the markets today. Crude advanced to a three week high today trading toward our target of $103-$105/barrel in the July contract. Aggressive traders can buy dips in crude as well as the distillates. Natural gas appreciated an additional 3% today as prices are approaching levels not seen since early May. We feel the easy money has been made on longs and have advised clients to lighten up on longs or at a minimum to tighten their stops. A correction of 4-6% we will likely re-establish longs for those clients that have already exited their longs.

The indices are back over their 20-day MAs and likely headed for a re-test of their highs in late April. The dollar index is lower by nearly 0.50% today, trading to a three week low. We look for continued weakness and traders can stay the course buying dips in the European crosses; the euro, swissie and pound. A new currency recommendation today is buying the loonie. After the near 4% correction in the last few months we feel we could see a retracement higher, and our target is 1.04/1.0450.

Livestock traders can work their way back into longs in lean hogs and live cattle. We would remain long as long as the recent lows hold. Our favored play would be live cattle, either June or December contracts. We advised clients who were previously long metals to move to the sidelines in both gold and silver today. Both cocoa and sugar were higher today but remain long as we are looking for more appreciation. In cocoa our target is 3150/3200 in the July contract and as for sugar we expect 24.50/25.00. Lifting a ban on exports in Russia contributed to falling wheat prices today, losing nearly 5%. Weakness spilled over to corn and soybeans as well with corn down 1.45% and soybeans 0.25%. Aggressive traders could be short corn looking for an additional 20-30 cents. More conservative traders should be looking for long entries in new crop on that break. Exit your short futures trades in the debt complex and look for a correction to cut losses in your September put options.

Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.