pitgurufk
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The Softs Review
For the week of September 26, 2011
For the week of September 26, 2011
By Jurgens H. Bauer
As the US dollar strengthened over investor fears, the Brazilian real dropped significantly and since it is one of the important currencies to the pricing of soft commodities that is a big deal. It was a big factor this past week for coffee, sugar, oj and cotton. And as long as there is more downside to come, all will remain under pressure this week as well. The other soft market, cocoa has its own set of circumstance, and all commodities seem to suffer from the impact of falling demand forecasts given the fear at work in the macro economy. So expect more of the same this week, lower prices among the members of the soft complex.
Individually, there may be technical attempts to rally. We are seeing higher prices in early trading this morning in several markets, but these should be used as selling opportunities, rather than signals that prices have flushed out the weakness and are ready to move higher. In other words, soft markets are responding in sympathy to the recovery in the equity markets, and that is to be expected since the markets carry relationships. Worth mentioning is that they are however, not one and the same. Commodities will react to events in the world economy and currency relationships, but they also will have their own unique fundamentals. Right now supply seems not to be the focus, the focus is rather on demand right now, and the fear of demand falling.
***Chart courtesy Gecko Software’s Track n’ Trade Pro
Past performance is not necessarily indicative of future results.
Disclaimer: Past performance is not indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. The use of stop loss or contingent orders may not protect profits and may not limit losses to the amount intended. Certain market conditions make it difficult or impossible to execute such orders.
