The Softs Review
For the week of March 28th, 2011
Back to the futures trading floor this week, Jurgens H. Bauer will help traders and investors in the floor have a full view of how the soft market will be working in the following days.
The United States is in an inflationary environment whether the government agrees to it or not. Markets are jumpy and at times, usually the wrong times, trading becomes thin. In other words the soft markets have been hard to trade. Sure traders see trends develop, but with the 24 hour news cycle they see what can happen when something unexpected happens, especially when the markets are closed. And no, this is not a vote for keeping them open 24/7. Electronic markets may appeal to some folks, but not to me. First because they impact my livelihood, I am a floor broker and derive my living by executing customer orders. Yes, I trade, but my positions are very small and I trade as it improves my ability to comment on the markets. I've found that when I have money at stake it allows me to understand and appreciate risk. On the negative side, electronic trading has reduced the weight of those who use the markets to hedge, and specs have added to the volatility of price moves.
Where things stand for the coming week... The USDA will issue its annual cotton plantings report on March 31st. So far, the prediction from Informa Economics is that US cotton planting will rise +20% this year to 13.13 million acres. Supplies therefore are apt to increase and that may stem the tide of the cotton bull. Sugar still has tight supply channels and the possibility of reduced output in India and Australia may keep an underlying supportive feature, but technically, sugar still looks to be forming a head and shoulders top. 2830 will be a key for SBK. As for coffee, Brazil's harvest begins in May. The market looks like another potential head and shoulder's top formation, but until 260 gets breached, look for a trading range market. Cocoa is thought to have adequate supplies despite the lack of "available" Ivory Coast exports. Fundamentals are supportive with civil unrest there.
Check for the soft chart at pitguru.com |
