RJO FuturesCast

April 9, 2021 | Volume 15, Issue 14

The Markets

Metals - Gold Fails to Follow Through×

Precious metals dipping after failing to breakout above $1,760. The market has in my opinion bottomed and will likely challenge yesterday’s swing high just under $1,760. The 50 DMA comes in at $1,763.30 for June gold. A close above that level will encourage the bulls to add. Some inflationary US data would also support. I see the gold market establishing a “new” trading range between $1,785 and $1,825. Expect gold to hold support around $1,725.

Platinum also failed to breakout above $1,250 this week. Good support around $1,190 to $1,200 should hold. The next attempt to take out $1,250 should quickly lead to $1,275 and possibly $1,300.

I continue to be long term bullish precious metals. I’ve discussed my thoughts on inflation, money supply and rising yields on ten-year notes. I see rates moving much higher and that should also move gold much higher.

Gold Jun '21 Daily Chart
If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-4124 or fcholly@rjofutures.com.
Metals - Silver Struggling×

Silver is struggling to hold above $25.00 with even weakness in the dollar this morning. The weak dollar and weak metals are usually not good for silver bulls. The Fed is on the watch for inflation as they are data-dependent in their forward guidance. The most recent dialog from the Fed suggests that inflation concerns are, at least for now, pushed to later part of 2021. The primary focus now is how to quickly ignite the economy as governments are ramping up covid-19 vaccine deadlines. There is of course a concern of variant strains of Covid-19, but faster vaccination initiatives would reduce the overall concern. The faster the vaccination schedules, the better for silver in my view.

From a technical perspective, silver needs to continue to hold above $25.00 to come out of this “ flag” like chart formation that could spell a “wash” to $24.00 or lower if silver fails to hold above $25.00. The upside target could be above $25.50 near terms and a break above $26.00 would probably signal near terms lows are in.

Silver May '21 Daily Chart
If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7290 or etesfaye@rjofutures.com.
Energy - Oil Poised for Weekly Loss×

Oil prices are poised for a weekly loss of over 3% as the market assess rising supply amidst reports that OPEC+ will be gradually increasing supplies by 2 million barrels per day from May through July, as well as the subsequent impact on fuel demand from the ongoing pandemic. Global inventories, however, are expected to continue to fall as the demand outlook gradually improves as the global recovery accelerates. While the initial fall in weekly oil stocks fell was supportive, gasoline stocks jumped sharply, ahead of the expected increase in seasonal demand, according to the EIA. This comes amid an increase in the refinery rate of about 25% over the course of the last month. Oil volatility (OVX) continues to fall as the market remains bullish trend with today’s range seen between 58.01 – 63.15.

Crude Oil May '21 Daily Chart
If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-438-4805 or aturro@rjofutures.com.
Softs - Continues Pressure on Cocoa Prices Due to Covid-19 Restrictions×

Same story, different day for cocoa futures. Lack of demand continues to pull cocoa prices lower. The chart looks bearish, short-term outlook for demand is bleak. Cocoa futures have found support at lower and lower levels the past week. Although the global vaccine rollout has been somewhat promising, issues overseas has caused concern in the markets. Lockdown measures still in place in some areas as Covid-19 cases rise again continue to hurt a chance of a recovery in cocoa prices. European demand has been weak, chocolate companies continue to report weaker earnings. Continue to monitor prices in the currencies correlated to cocoa, Euro and Pound specifically. For now, traders should follow the technicals. If cocoa finds a bottom on Friday’s trading day, look for a short-term bounce to start the week if the COT data is positive.

Cocoa May '21 Daily Chart
If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-4124 or pmooses@rjofutures.com.
Agricultural - Grain Futures Update w/Stephen Davis - 04/09/2021×

Stephen Davis discusses the latest news in the grain markets, including continued fallout from last week's USDA Planting Intentions Report.

Agricultural - Live Cattle Showing Strength×

The cattle market is continuing to show signs of strength with cash cattle trending higher this week and last. With what is going on with cash prices, we are starting to Apr cattle trade higher along with the June futures. Traders expect to see the June futures to start forming a top as it has continually reached [and eventually took out] every swing point in the market. Packers have been bidding about $4 higher and those bids are being sold by some feedlots fearing that they might not be able to move cattle next week or get a more competitive bid. Strong boxed beef prices indicate demand is surging as consumers want beef for grilling and restaurants want beef to satisfy customer demand. Packers need to purchase cattle and are hopeful bidding $4.00 higher early may get the job done.
The USDA boxed beef cutout was up $3.30 at mid-session yesterday and closed $4.10 higher at $262.77. This was up from $244.83 the previous week and the highest the cutout had been since June 4. Cash live cattle continues to trend higher. In Kansas, 1,187 head traded at $121.00, up from $116.00-$118.00 last week. June cattle traded moderately higher on the session yesterday and posted contract highs for the third session in a row. The USDA estimated cattle slaughter came in at 120,000 head yesterday. This brings the total for the week so far to 225,000 head, down from 239,000 last week but up from 212,000 a year ago.

Live Cattle Apr '19 Daily Chart
If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-536-8601 or pmcginn@rjofutures.com.
Currency - Bitcoin Futures: What You Need to Know!×
Adam educates viewers on Bitcoin futures, including the full and soon-to-be-traded Micro Bitcoin futures. Adam provides insight to the Bitcoin futures contract specifications, leverage, tick sizes, and much more. CME Micro Bitcoin futures will become tradeable on May 3rd, 2021.
Equity - Stocks Looking Flat This Morning×

Stock futures are trading flat this morning but are still poised to record another big weekly gain, continuing its longest winning streak since October.  Early trading saw a slight increase of 0.1% after setting a 19th all-time high on Thursday.  This would be the third straight week of gains, a first in six months.  Jerome Powell spoke this week on how the Federal Reserve was looking for “actual progress’ rather than “forecasts” for progress toward the central banks employment and inflation goals.  He also reiterated that they would like to see a “string of moths” with a strong job report before considering a pull back on its current asset purchase policy. Last week had seen an increase of non-farm payrolls of 916,000 in March, the fastest growth since August.

Support today is 408000 and 406500 with resistance showing 410500 and 411500.

E-mini S&P 500 Jun '21 Daily Chart
If you have any questions or would like to discuss the markets further, please feel free to contact me at 888-861-1656 or jyasak@rjofutures.com.

Coming Up Next Week...

View Futures Calendar