Interviews
NYK futures traded sideways this week
25 Aug '06
3 min read
With the exception of Tuesday's session, which produced an unexpected "flash in the pan" rally, the summer doldrums continued this week.
Trading volume remained depressed, especially when measured in terms of the near record open interest of 17.0 mio bales, which is slowly but surely approaching the size of an entire US crop.
From a technical point of view, the market's current position is about as neutral as it gets, both on the daily and on the weekly chart.
The 55-cents level in December is just slightly above the halfway mark of its recent 51.20 to 57.65 range, while on the weekly chart the spot month (October) closed also just slightly above the mid-point of its 18-month range of 46.00 to 58.00 cents.
Looking at the moving averages, they too tell the story of a flat-lined market, with every MA between the 7- and the 50-day falling somewhere between 54.90 and 55.71.
Spec shorts have been the most active players lately, but they too have now withdrawn after Tuesday's surprise rally caught many of them on the wrong foot. When we look at the current composition of who owns what according to the latest spec/hedge report, we have the following situation:
Spec longs amount to 8.9 mio bales, whereas spec shorts account for 6.9 mio bales. Most of the spec longs belong to hedge and commodity funds that subscribe to a longer-term bull market in commodities.
They have stayed the course with their positions even during sharp sell-offs, which tells us that they are strategic rather than momentum players. The spec shorts on the other hand are primarily trend-followers who can quickly add or liquidate a position if technical levels are breached.
Trading volume remained depressed, especially when measured in terms of the near record open interest of 17.0 mio bales, which is slowly but surely approaching the size of an entire US crop.
From a technical point of view, the market's current position is about as neutral as it gets, both on the daily and on the weekly chart.
The 55-cents level in December is just slightly above the halfway mark of its recent 51.20 to 57.65 range, while on the weekly chart the spot month (October) closed also just slightly above the mid-point of its 18-month range of 46.00 to 58.00 cents.
Looking at the moving averages, they too tell the story of a flat-lined market, with every MA between the 7- and the 50-day falling somewhere between 54.90 and 55.71.
Spec shorts have been the most active players lately, but they too have now withdrawn after Tuesday's surprise rally caught many of them on the wrong foot. When we look at the current composition of who owns what according to the latest spec/hedge report, we have the following situation:
Spec longs amount to 8.9 mio bales, whereas spec shorts account for 6.9 mio bales. Most of the spec longs belong to hedge and commodity funds that subscribe to a longer-term bull market in commodities.
They have stayed the course with their positions even during sharp sell-offs, which tells us that they are strategic rather than momentum players. The spec shorts on the other hand are primarily trend-followers who can quickly add or liquidate a position if technical levels are breached.
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