Monday, June 29, 2015

Commodities Report: Emergency Edition (CORN, DBA, JO, WEAT, BAL)

I don't know how many of you have been glued to your computer screens as I have for the last 36 hours but hyperbole aside, this really has been a "Lehman weekend." The following events have taken place:
  • An extension was requested by Greece beyond the June 30th due date to have a referendum on the ECB terms.
  • The 'referendum extension' was promptly declined.
  • Emergency liquidity has been frozen by Drahgi.
  • Capital controls by Greek banks will be enacted on Monday. (The Telegraph)
  • Piraeus Bank has publicly stated that they will remain closed for a week. (Zerohedge)
  • The Greek stock market will not open on Monday. (Reuters)
  • 1.6 billion Euros is due on Tuesday.
For this reason I don't believe doing complete coverage of the commodities market like I normally do is important but I will highlight a few surprises from Friday.

Agriculture: DBA
  • DBA is listed as a speculative buy, but this could change after today and the expected flight to safety in the U.S. dollar which will have a knock-on effect on commodities.
  • The breakout in agricultural stocks has been quite surprising. EMA's are crossing over bullishly.

Coffee: JO
  • JO is still listed as a neutral.
  • The only exception to this breakout by agriculturals is coffee which is a little confusing given the dryness of South America at the moment. 
  • We won't be reaching the last resistance line of the large declining channel until the end of July.

Corn: CORN
  • CORN is listed as a speculative buy.
  • A breakout from it's long-term downward channel has occurred but has done so so strongly that it's outside the Keltner channel. The EMA's have bullishly crossed over but still remain below the MA(144).

Cotton: BAL
  • BAL is now listed as a strong long/buy.
  • This remains the only agricultural commodity above the MA(144) so it is no longer 'speculative.'
  • The indicators for cotton are looking very good.

Wheat: WEAT
  • WEAT is listed as a speculative long/buy.
  • The 4.69% jump has been utterly fantastic and the gap up is quite bullish however the RSI is already above 70. I do expect the EMA's to eventually move above the MA(144) but only after a little respite. 

Jakob Richardson © 2015