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Softs - Mar 08,2010
Sunday, March 07, 2010
by PitGuru.com Authors of PitGuru.com
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The Softs Pit Review For the week of March 8th, 2010 By PitGuru Jurgens H. Bauer Coffee fundamentally has two schools of thought. One where people argue that the new Brazilian crop is closer to 60 million bags, and the other where folks believe that the crop is closer to 48 million bags. The latter includes (so say reliable sources) several grower cooperatives. Now you can also factor in that Colombia has over-hedged (oversold against their crop) and has a shortage of high end coffee, which is being demonstrated by the high differentials which have managed in the last month to move back up from the mid +50's to the mid to high +60's - and we've got ourselves a ball game. Now while the tightness in Central America and even Brazil's differentials have improved, there still is the technical picture to view. Before I get to discussing that aspect, also note also that according to ICO statistics there is a gap between world growing consumption and production and inventories. Technically the market cannot seem to move up and out of the down trend. Spec funds are short and the market seems poised to make a move, from its action I hold puts and favor the short side. Cotton is stalling. Fundamentals are potentially less friendly as exports slow and cert stocks increase. The charts look as if forming a flag, but may be building a top. Wednesday the market will receive the USDA crop report and then at month-end Planting Intentions. Typically, cotton is vulnerable at this time of year, but being that the participants have changed perhaps this will not be the case. I tend to think perhaps the old crop new crop spreads will see the biggest price swings, and am not comfortable unless using options to play this market. Sugar prices made consecutive lows for much of last week. Eventually they did hold and a short covering rally ensued. Has the market bottomed after retracing the year's gain? Fundamentals have not changed yet there is reason to expect supplies to not be as tight as originally thought, due to speculative influence. I'd like to see a range established, with support proving itself. Volatility has not yet dropped, but ought to... The key here will be physical demand. Cocoa prices had been receiving a lot of negative play and are trying to hold above 2800, yet remain below 2900. While it may see efforts to return back above 3000 that should be a struggle given the current economic climate. OJ values improved last week as specs likely taking on fresh long positions ahead of Wednesday's crop report. February's number estimated the crop at 129 million boxes; look for a further reduction of about 5 million.
***chart courtesy Gecko Software’s Track n’ Trade Pro Past performance is not necessarily indicative of future results.
Recent articles from this author
- PitGuru.com's Grains Analysis: Feb 06, 2012 - Sunday, February 05, 2012
- PitGuru.com's Grains Analysis: Jan 23, 2012 - Sunday, January 22, 2012
- PitGuru.com's Grains Analysis: Jan 03, 2012 - Monday, January 02, 2012
- PitGuru.com's Grains Analysis: Dec 19, 2011 - Sunday, December 18, 2011
- PitGuru.com's Financials Analysis: Dec 19, 2011 - Sunday, December 18, 2011
About the author
Daniel Cronin - PitGuru.com's Energies & Metals Guru Daniel Cronin has spent years on the floor of the Nymex as part of one of the largest energy floor brokerages in the business. His extensive experience stems from not only his Pit background but also through intense studying and implementation of complex technical analysis and market trading techniques via the mentorship of the now retired Ralph Acampora. Mr. Cronin brings subscribers a rare combination of book smarts and real world trading experience in one of the most volatile market sectors in the futures industry. Matthew Pierce - PitGuru.com's Grains Guru Mr. Pierce is a unique acquisition for Futures Press Inc. in that he has an unmatched level of real hands-on experience within the industry in addition to his floor trading expertise and top notch education at the University of Illinois College of Agriculture. Matthew has literally cultivated the perfect professional career as a grain expert by working with the industry's most recognizable companies such as Cargill, LaSalle Group, Conagra, Walsh Trading Inc. and many more. In addition to trading on the floor of the Chicago Board of Trade, Mr. Pierce writes what many in the business believe to be the best kept secret amongst trading reports available in the industry. Jurgens H. Bauer - PitGuru.com's Softs Guru Jurgens owns and operates his own order execution firm on the ICE trading floor. He has been a member since 1987. His firm, Jurgens Bauer and Associates, specializes in executing option orders for a wide array of customers and a variety of industry participants, including individual speculators, funds and members of the trade. While Jurgens has been an active member of the trading community he has also spent time since 2000 working at raising awareness of environmental commodities, educating industry professionals on emissions trading, brokering transactions between private counter parties and developing SO2 and NOx contracts for the NYMEX. Frank LaMantia - PitGuru.com's Financial Guru Soon to be Dr. LaMantia, Frank is not only one of the most educated traders on Wall Street, but also maintains an industry resume of substance and depth. Frank has worked extensively on an Institutional preferred stock syndicate desk, as a government bond specialist, and as a financial advisor all the while achieving multiple licenses in the finance field. With an extensive and impressive client list (including Citibank, Bear Stearns, Lehman Brothers, AG Edwards, Mesirow, UBS, and numerous Hedge Funds), Mr. LaMantia brings his one-of-a-kind background to his current occupation of full time trader.
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