Wheat futures rally, crude oil continues drop

The U.S. equity markets are experiencing a mild bounce after yesterday’s large sell off. The market awaits the FOMC comments which are scheduled for 2:15pm EST. Disappointing earnings reports have trumped continually upbeat housing numbers, bringing the S&P 500 futures almost below 1400. The markets never move in a straight line, so sell-offs in the midst of rallies and vice versa are to be expected, but this sell-off from 2012 high levels seems like it could be temporary and not the start of new longer term down move. With that said there is still sufficient geo-political risk variables to potentially keep stock bulls less aggressive than they might normally be with all the positive U.S. housing data coming out.

Crude oil futures continue their sell-off, trading down more than 1% this morning. Talk of more supply hitting the market is sending prices lower, as the Energy Department reported a big jump in U.S. oil inventories. We continue to have our next downside target at the $82 level.  Natural Gas futures are also lower by around 2%, after a sharp rally above $3.

We focus on wheat futures today. Wheat is leading the way up in the grains markets today, trading up around 18 cents (+2.14%) thus far. This is a fundamentally driven rally as Ukraine’s agriculture minister in a Reuters report overnight confirmed the country will ban wheat exports starting Nov. 15. Our key pivot level for wheat futures (DEC 12) is $8.70. If wheat can hold above this key pivot level, we look for today’s bullish move to continue up to recent highs at the $9.60 level. The key psychological level of $10 is of course the next major level above that. We think the next major support level below our pivot is $7.80.

Click to enlarge.

About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome