RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

We already have an impressive rally under way in the crude oil futures and the gold and silver markets. I’ve been thinking for a while now that the commodity markets are not likely to see another bull market without a meaningful correction in the equity markets. However, at the time of writing this article, the S&P futures are yet again making new all-time highs!  All good commodity traders are able to recognize when they are wrong and adjust their strategy. My thinking now is that we can have a continuation of an unprecedented rally in stocks and a rally in commodities at the same time. That’s not to suggest that the equities will not have a “normal” market correction along the way. What I do think is that commodity values are way underappreciated based on stock prices. There are a lot of positive economic incentives in the US right now that are starting to spur real growth in our economy. The geo politics that support crude prices or safe haven trades in gold are being shrugged off by the stocks.

There are numerous other commodities that have been undervalued for years now due to big supplies and lack luster demand. Wheat, corn, cocoa and coffee just to name a few. Low prices take care of themselves. Demand will come back and supplies will be tight… prices move higher to curb that demand.

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Frank J. Cholly

Senior Market Strategist
Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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