FAOAS has been quite for the past three months with vacations and light trading. Here we start off September with the USD reaching the lows off the year. “Commodity Boom of 2009″ that every analyst predicted sure hasn’t followed suit. Wait a minute! Is this the start of the rally? With continued spending by the US government and foreign countries unloading US currencies and investing in emerging markets. These investors are looking for better earnings. Or should the be looking toward commodities?
Here are some that might have been invested by some of the larger funds. Sugar, nice rally to 2485 and then a selling of 5,000 contracts to drive the market to a low of 2050. With sugar in a deficit for the year, this rally may be at a stand still for a while. India has been receiving some late moisture, Brazil has still had a decent crop size, and US sugar beets may produce a the best production levels in years. FAOAS is keeping a close watch. The 1974 and 1981 rally in sugar topped out in late October and early November.
Right along with sugar goes cocoa. The bulls have near term control of this market. I am looking for a test of 2008 highs. The weak longs were taken out last week. FAOAS is watching to see if there will be a follow through in the next couple of days. This market is always hard to predict with very little fundamental news on regular basis. Also, the political extremes in the Ivory coast.
Grains,Grains, Grains. What can we say, no summertime rally in wheat. Corn and Beans pushing newer lows. These markets should see a bottoming pattern. Hopefully soon. The fall low in beans should be coming if we had not hit it yet. Looking for some confirmation after a 50 cent rally last week. This is all going to be weather related for the next couple of weeks in the outlook of a major frost. Great growing conditions for grains all year except for some late spring planting. Which in turn deserves the risk of an early frost.
Equities and currencies are in the sites of the Federal Reserve Meeting on Tuesday. Expect some readjustments by funds on the recession outlook. Bernanke states reccession is over, the media states all doom and gloom with unemployment. The equities need some sort of correction in order to proceed with the gains. If you were a client, you were told of the gap in the S&P 500 weekly chart at 1109.00. FAOAS has been bullish for a while. 1067.00 was the key number for a nice correction. S&P hit a high of 1071.50 on Thursday and then couldn’t break the high on Friday. FAOAS is short-term short for this market with a close stop at 1075.50.
Be on the look out for future reports and chart patterns in the coming days. Sign up for our Weekly Newsletter to take advantage of our Commodity Outlook. If you are looking for up to the minute trades contact me to become a client.
