RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

After recently trading a swing high of $3.32 in the January futures contract, as of Wednesday natural gas is trading at just $3.07. The six to ten day weather forecast is calling for above normal temperatures and that is obviously weighing on price over the past few trading sessions. The market’s failure to find technical support after filling the gap Tuesday has turned into technical selling Wednesday. Also adding weakness to the trade right now is the expiration of the December futures contract on Tuesday, November 28.

I think that once we get through this holiday trade and next week’s expiration, that the January natural gas futures will have exhausted the sellers and attract a fresh round of buying support. This market is a good value at the $3.00 trading range. In fact, I believe that the prices will gravitate back to the trading range of $3.20 to $3.00. Technical buyers and value seekers will begin to ease their way in down here and then a change in the weather forecast for colder temperatures will be what is really needed to spike prices more sharply. Without a “polar vortex” I wouldn’t really expect prices to achieve levels above $3.30 to $3.40 for the January contract.


Jan ’18 Natural Gas Daily Chart

Jan '17 Natural Gas Daily Chart

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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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