Frozen OJ ” Is Weather The Only Factor ?”

Frozen OJ ” Is Weather The Only Factor ?”

Tropical storm “FAY” may not be the only factor driving this OJ market in the near future. Farmers sure had a decision to make on whether or not to keep there groves this year. With surplus going into this year and a good harvest did not help. Fuel costs, fertilizer costs, immigration issues and pesticide costs all on the rise sure hinders the pockets of the farmers.

 

Fundamental Analysis

     With hurricane season in full bloom and a few storms brewing in the past week the bulls are coming out of the wood works. Tropical storm Fay sure put the groves underwater this past week, with 30 inches of rain in certain spots and the Indian River area getting drenched also. The total damage from the excess water will probably take weeks to examine. Not only the rain but the wind-blown canker is another issue the farmers are dealing with.

     Citrus greening, also called huanglongbing or yellow dragon disease sure has an impact on the citrus market.Citrus greening carried by the Asian Citrus Psyllid scared the citrus farmers in California in July. They found the Asian citrus psyllid in and around the San Diego area. The reports also state the little pests that were caught did not show them carrying the disease. So far so good for the California growers.

     Farmers are stating that the Asian Citrus Psyllid has hurt China, Brazil, and Florida. They also report that the little bug may do more damage than the Mediterranean Fruit Fly due to the fact that it hurts the whole grove and not just the fruits.

     The increase in operating costs are affecting the farmers just as well as the over supply. The increase in fuel, fertilizer, pesticide and the weaker US dollar are all factors in whether the groves are going to be profitable or not. Immigration issue is another factor especially with only a few handfuls of farms use mechanical ways of harvesting the fruit.

     The 2007 – 2008 season saw a 32% increase in production form the 2006- 2007 season. Dreyfus estimates a 8% drop in production this year to 156 million compared to the 169.7 million for 2007 -2008 season. An independent analyst expects a 12% fall to 150 million boxes for the harvest that starts in October. October is also the month of the next major Orange juice report.

Technical Analysis

     The monthly has tested the breakout from October of 2005 at 1.00, should see a bounce back to the 50% retracement which would put OJ at 152.00 and also the highs from January 2008. The daily chart is starting to show an uptrend into the 120 – 140.00 level. 120-140.00 level is the range since March. Volume and Open Interests are both on the rise since late July. 10 day RSI is above 50 mark after reaching extreme lows last month.

      Trade recommendation for OJ is buying the straight  call option on the March 2009 contract. By doing this you not only including the high volatility for hurricane season but also the freeze season for Florida. March 2009 options expire on 02/20/09 and have 177 days left. Buy the March 09 150.00 calls for 6.50 or $975.00. This strategy has unlimited profit potential and a maximum loss of the price paid for the option plus commissions and fees.

Past performance is not necessarily indicative of future trading results. Trading advice is based on information taken from trade and statistical services and other sources which Transworld Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.Futures trading involves substantial risk of loss and may not be suitable for all investors.

To contact Jimmy Tintle email is jimmy@transworldfutures.com or reach him by phone at 1-877-843-4519. Transworld Futures offers a wide variety of trading tools, webinars, and simulated trading. We also various types of accounts from deep discount online trading to managed futures, and FOREX accounts
If you have any additional questions feel free to email, or to call us at 877-843-4519.

Natural Gas “Anticipation Of Colder Winter Drives Demand”

NATURAL GAS

Anticipation of colder winter months fastly approaching may drive natural gas prices up. Last week, natural gas only gained 1.0% of storage over the 5 year average. August through October usually largest increase months for Natural Gas.

 

Fundamental Analysis

     The fundamentals for natural gas can and will be a little tricky these days. Natural gas only gaining 1.0% over  a five year average for storage. Consumer and commercial consumption averages on the increase  and industrial usage down. How much natural gas are we going to use is the question.

     The experts are looking at this late hurricane season setting up like 2004-2005 seasons. if this happens you can expect disruptions in crude within the next few months. Natural gas may piggy back off of the increase in crude oil. Any geopolitical issues involving Russia and Iran may also boost the energy sector.

     With temperatures reaching the 40’s in the upper Midwest will sure get the bulls looking at the natural gas charts. Seasonal adjustments for natural gas usually start in August but with the correction in crude and the USD it sure had to follow suit. Out of the past 17 years natural gas has been stronger 13 years and weaker only 4 years.

Technical Analysis

     We should see natural gas touch or come close to touching the lows from last September at 8.273. December natural gas is trading at 8.600. I am looking for a dip back to those September lows and then a reversal to a minimum 50% retracement of the July/August drop. Which would land natural gas around the 10.000 mark. This also the area where the 50 day moving average is. Natural Gas may even reach the 100 day or the 200 day moving averages.

     Looking for bull call spread to cover our downside risk on trading this highly volatile market. I am also looking at trading the December contract for the next 88 days. The December options expire on November 21,2008. Looking to buy the December Natural Gas 1080 call and sell the  December Natural Gas 1170 call for 100 or $1000.00. If filled at this price would give you a 1 to 7 risk to reward ratio. Total loss would be $1,000.00 and the total profit would be $6,000.00. These figures do not include commissions and fees.

 

Past performance is not necessarily indicative of future trading results. Trading advice is based on information taken from trade and statistical services and other sources which Transworld Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.Futures trading involves substantial risk of loss and may not be suitable for all investors.

To contact Jimmy Tintle email is jimmy@transworldfutures.com or reach him by phone at 1-877-843-4519. Transworld Futures offers a wide variety of trading tools, webinars, and simulated trading. We also various types of accounts from deep discount online trading to managed futures, and FOREX accounts.

Cocoa “Bullish Factors Going Into Harvest”

Fundamental Analysis

      With a combination of sun and rain in July but wet and cold in August raised fears the Black Pod disease has become more wide spread. Also among the fears is the pesticide shortage with only around 30% of the farmers needs for pesticide fulfilled in and around Daloa.

     The crop may reach record size but the quality of the beans may not be as good. The farmers really have no choice but to use the poor quality beans. This will definitely move the prices with more poor quality beans in the harvest.

      Emerging markets with more money, we should expect to see them consume more chocolate. Fortis Bank has also raised there expected shortfall to 29,000 tones from 6,000 in June. Due to the extra demand. This would be the third straight year of demand outweighing supply.

     Ivory Coast has doubled its port registration tax on cocoa and coffee exports to 10 percent of the cost, insurance and freight (CIF) price to help cope with rising fuel prices, a presidency statement said on August 9, 2008. The port registration tax is one of a range of levies imposed on cocoa and coffee exports.

     Seasonally, September and October are months of weakness for cocoa but with the mid crop ending and the outlook for the main crop unpredictable. Cocoa should if anything trend sideways or slightly lower before the turn around in November.

     Now lastly, we have seen a large run up in the USD and a small drop in cocoa prices, we see a correction in the USD we should see another jump in Cocoa prices.

Technical Analysis

      March 09 contract  just closed above the 100 day, 50 day and 39 day moving averages after coming close to tapping the 200 day moving average. 10 day RSI just broke above the 50 mark two days ago and stochastics are looking to the upside. Should probably see a retracement of yesterdays run up, today or in the beginning of the week.

Trade Recommendation

     The trade recommendation for Cocoa is a Bull Call Spread or a straight call. I am looking for the bull call spread more than anything just in case we get a good correction in September/October. If that happens we can look at buying the call we sold back for a profit and hold onto the one we purchased.

     Buy the March 09 Cocoa 3000 call and sell the March 09 Cocoa 3300 call for 90 or $900.00. Or buy the straight March 09 cocoa 3600 call for 100 or $1000.00. Straight call option has unlimited profit potential and the bull call spread has a profit potential of $2100.00 minus commissions and fees. It is a low risk to reward ratio at only 3.3 to 1.

Past performance is not necessarily indicative of future trading results. Trading advice is based on information taken from trade and statistical services and other sources which Transworld Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.Futures trading involves substantial risk of loss and may not be suitable for all investors.

To contact Jimmy Tintle email is jimmy@transworldfutures.com or reach him by phone at 1-877-843-4519. Transworld Futures offers a wide variety of trading tools, webinars, and simulated trading. We also various types of accounts from deep discount online trading to managed futures, and FOREX accounts.

U.S. Preview: Philly Fed to Remain in Decline for Ninth Straight Month

U.S. Preview: Philly Fed to Remain in Decline for Ninth Straight Month – “Traders are still looking like a short term bottom here in the markets,” said Jimmy Tintle, futures broker at Transworld Futures. http://www.economicnews.ca/cepnews/wire/article/110262

The Day Ahead Canada & U.S.: Canadian CPI and Philly Fed

The Day Ahead Canada & U.S.: Canadian CPI and Philly Fed – Jimmy Tintle, futures broker at Transworld Futures.com said traders are looking for a bottom in the U.S. manufacturing sector. He added that the index still remains weak. http://www.economicnews.ca/cepnews/wire/article/2/110277/

Trader Preview: Traders Expecting Short-Term Bottom in Philly Fed Survey

Trader Preview: Traders Expecting Short-Term Bottom in Philly Fed Survey Jimmy Tintle, futures broker from Transworld Futures.com said it will take a much stronger than expected Philly Fed survey to have a big impact on markets. http://www.economicnews.ca/cepnews/wire/article/110272

Silver “Year End Rally”

Silver “Year End Rally”

Silver is as much as an industrial metal as it is a precious metal. Forty percent of silver use goes to industrial consumption. The use of silver in electrical components is due to its conductivity values. Also, with gold trading above $900.00 an ounce we will most likely see jewelers use more silver this holiday season. With the holiday season coming up quite quickly we should be looking for a year end rally.

Demand is usually on the increase for silver, in the upcoming months on speculation of the retail sales for jewelry, industrial components like computers and cameras. With that in mind, the normal rallies for silver are July through September and then again November through February.

With the metals increasing in value due to the inflation rates and price of energies. The outlook for world economy is looking like more countries will be jumping on board of the metal wagon to curb inflation. Also, we have to look at the emerging markets using more oil to suffice there new found wealth. We should see oil and gas rise not only on the over compensation, but also for the heat of the summer and increasing inventories for winter cooling.

Technically, we have seen silver touch the 200 day moving average three times in the past 3 months with no such luck of a close below to confirm a reversal in the market. Silver has been trading in a uptrend for a couple years with only on breakout to the upside. The February 2008 breakout was short lived as silver returned to the range in mid March 2008. First support is at 17.00 with second support around the 15.75 – 16.00 level. I am looking for a early year end rally with maybe a pull back into October before we see another rally.

I actually have two recommendations for silver at this point. First of all, is a bull call spread which limits your risk to the price of the spread purchased. This spread would be to buy the December 1950 call and sell the 2050 call for 21 cents or better. Maximum risk would be at $1050.00 Maximum profit if silver closed above the 2050 at expiration would be $4850.00 not including commissions and fees. That is a 4 3/4 to 1 ratio.

Exit strategy for this recommendation on the down side would be if December silver closed below 16.50 or 40% of the price paid for the spread. Exit strategy for the upside would be at that the underlying contract hits or closes above 1950.

Second recommendation due to the fact that silver has been trading in a range and the economic outlook is so uncertain, would be to sell out of the money options. Selling both puts and calls on either side of the range would be a strangle. Sell the December 2100 call and simultaneously sell the December 1550 put for 84 cents or a credit of $4200.00. By doing this we are taking advantage of the high price of the options and time value. The downside to this trade is that you have unlimited risk with limited profit potential of $4200.00.

Exit strategy for this recommendation is if the underlying contract is to or through the strike price liquidate or when you have collected at least 70% of the premium collected. ($2940)

 

Past performance is not necessarily indicative of future trading results. Trading advice is based on information taken from trade and statistical services and other sources which Transworld Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.Futures trading involves substantial risk of loss and may not be suitable for all investors.To contact Jimmy Tintle email is

 

jimmy@transworldfutures.com or reach him by phone at 1-877-843-4519. Transworld Futures offers a wide variety of trading tools, webinars, and simulated trading. We also various types of accounts from deep discount online trading to managed futures, and FOREX accounts.