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Commodity signals
CME Soybean  Features

 

In point and Figure charts the Double top formation is treated opposite of what is seen in a line charts  and is often a bullish reversal. Among the observations we see, CME soybean is forming a double top formation on its recent rally from 1381 cents. A rise above 1480 cents is a much likely phenomenon given a fresh bout of rally in grain complex.

Short term trend 1-2 weeks Positive to 1525 cents
Light Crude oil Futures

The broad range of crude oil seen from $83  to $110 since 2011 looks like gaining a renewed steam to test $110 again. Note the 5-legged triangle pattern on the weekly shows a rally above $100 can be handy given the fact the commodity rally has freshly joined the bandwagon of equity rally.

Short term trend 1-2 weeks Positive   to USD 102
Copper Futures

Like the crude oil the Copper futures has also risen above its thresholds and breaking over the trend line resistance $3.75 a classic buy signal is seen. the ADX is understandably low as the Global VIX is also trading low. Given the endurance of the signal, the ADX can continue to remain positive (from its current low reading) to push the price trend eventually higher.

Short term trend 1-2 weeks positive  to $3.95

Soybean Country Profile

United states is among the top 5 soybean producing states with a 5 yr average of 83646 (1000 tons) a year. A major origins for exports of soybean seeds has been making a rapid pace and reducing the domestic consumption (mainly for crush) since 2005 onwards. Hence the commodity plays an important role in the countries exports and hence gets influenced by dollar movements.

 

 

Weightage in CRB Index: 5%,

Lower ending Stocks: As an important origins of export, USA has been finding itself in a situation of lower ending stocks since last many years, which inturn influences other grain complex.

Dollar soybean correlation: The dollar correlation with soybean can sometimes be  uncanny  like in case of many other commodities, but looks like inspite of  factors effecting dollar independently we are still not in a position to ignore this correlation. As such a strong dollar a weaker commodity and vice verse.

 

Brazil is among the top 5 producers and a major export origin for soyseed, for the marketing year 2012-13 a record crop harvest is seen. Last 5 yr avg production is seen at 70420 (1000 tons) and exports majority of its soyseed produce. This marketing year the country has exported a record exports surpassing the crushing quantity for the first time in history. A depreciating Brazil real has been a key factor to see soyseed exports take a center stage for this country.

Argentina is among the top  producers of soy seed in the world but the difference is most of the seeds are internally processed to form by products and exports of these by products (soy oil and meal) forms an important soy trade factor. The last 5 yr average production is seen at 45720 (1000 tns) to make it one of the influencing origins and for marketing year 2012-13 the ending stocks of argentina is expected to stand highest among the origins.

 

 

Grain Correlations


 

Grain correlations hep in undermining a period of highly correlated times and low correlated times which serves a measure of one commodity behavior against  the other. Traders are always looking at these opportunities and try to capture the arbitrage opportunities that exist for a very short period of time.

 

 

Corn and wheat shared a positive correlations during 2011 to early 2012 and seems to have lost that sort of connect off late.

The Soy and Corn have been competing in almost every segment starting from acreage to of industrial use and in this regards can sometimes provide occasional opportunities to long soy/short corn or vice versa.

 

 

 

 

 

 
  • Bank Rates
Currency Centeral Bank Rate Overright Rate
AUD 2.75%
NZD 2.50%
EUR 0.50% 0.45%
CAD 1.00%
GBP 0.50% 0.48%
USD 0.25% 0.12%
  • Economic Calender
Date Event Actual Forecast

Jul 30

USA Cons Confidence

81.40

Jul 31

USA Adv GDP Q/Q
1.8%

Aug 02

USA NFP 195K

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