Commodities tipped to collapse

[wayneL]

Hey Wayne, Just as a serious follow up to that coffee slump, I see it took about 10 months for it to fully re establish its uptrend..........What was the catylist for the recovery??..............PS You are right how the "doom and gloom" articles were a pre-curser to the recovery...........I guess when things are really bad, they often can't get much worse?!...............What would be your slant on Sugar atm just out of curiousity, cause it has been "suffering" for a while as well?? Cheers Barney.

Barney,

I suppose that farmers walking away started creating tightness in supply... just a guess though.

Re sugar: Looking at the long term chart below, I would have to say minimum value is around about $5. The current spot price is ~$11 so it could go much lower. Whether it will, is another matter.

Cheers

 

[Sean K]

Looks like there could be some support between the green lines too. So it could steady. Could we have another 1980 spike still?? Must have been some strange stuff going on then....

 

[barney]

Looks like there could be some support between the green lines too. So it could steady. Could we have another 1980 spike still?? Must have been some strange stuff going on then....

Yeah that was a major spike Kennas....I'd be interested as well on any info re that.............(any ideas Wayne?) Always curious as to the catalyst for things like that....Cheers, Barney.

 

[wayneL]

Here's a very good PDF on the coming commodities crunch.

http://bloomberg.com/news/marketsmag/traders.pdf

 

[rederob]

Here's a very good PDF on the coming commodities crunch.

http://bloomberg.com/news/marketsmag/traders.pdf

Wayne
Bloomberg might be right within the next decade.
I have now seen doomsayers rampant for the past 2 years, and continue to be badly wrong.
There will be an exceptionally strong rally into year's end, led by zinc and nickel, and the laggard lead.
I don't expect people to "take my advice", but my record on commodities has lined my pockets nicely, thank you. And I have continued to buy when many have been selling.
The Amaranth fiasco just shows that the funds think they are immune from failures, but are really little different to you or me - we cannot always be right.

 

[wayneL]

Wayne
Bloomberg might be right within the next decade.
I have now seen doomsayers rampant for the past 2 years, and continue to be badly wrong.
There will be an exceptionally strong rally into year's end, led by zinc and nickel, and the laggard lead.
I don't expect people to "take my advice", but my record on commodities has lined my pockets nicely, thank you. And I have continued to buy when many have been selling.
The Amaranth fiasco just shows that the funds think they are immune from failures, but are really little different to you or me - we cannot always be right.

Well bully for you.

BTW, have you been following grains? I have had an interesting time in that department.... wheat in particular.

 

[Ken]

who thinks Rio will get to 100?

 

[Sean K]

who thinks Rio will get to 100?

Absolutely...but in one year, or 10????

 

[Ken]

well whats your prediction.

its in a bit of a rally at the moment. where will the resistance come from on its latest push. it has blitz from $70 to $73. i suspect it will take a breather around $74. Same with BHP now. Some profit taking may go on.

thats just a gut feeling.

they have risen almost 10% in last month

 

[nizar]

well whats your prediction.

its in a bit of a rally at the moment. where will the resistance come from on its latest push. it has blitz from $70 to $73. i suspect it will take a breather around $74. Same with BHP now. Some profit taking may go on.

thats just a gut feeling.

they have risen almost 10% in last month

I would buy BHP many many many times over before even looking at RIO.

The future outlook is much better for copper (Wats the name of that mine in south america that produces 8% of the worlds output?), uranium (Olympic dam will be much much bigger than ERA even with Jabiluka) and oil (RIO lacks an oil division; BHPs is bigger than WPL) than it is for iron ore (the world is made up of 5% iron ore, hence there will NEVER be a shortage) and diamonds!

Give me BHP any day of the week

 

[Ken]

i have both which is hopefully going to be my first property in 15 years.

 

[nizar]

i have both which is hopefully going to be my first property in 15 years.

ur first property in 15years?
Thats what i used to aim for.... when i was 5!

lol but now just past 20 and still no house... but im confident EVE and OMC will do it for me... OMC a nice car, but EVE, EVE is for my house!

 

[professor_frink]

Well bully for you.

BTW, have you been following grains? I have had an interesting time in that department.... wheat in particular.

Wheat's been going limit up the last few days hasn't it?

It's 30 cents isn't it?

 

[wayneL]

Wheat's been going limit up the last few days hasn't it?

It's 30 cents isn't it?

Yep,

I'll post a chart later... corn went limit up last nite as well = 20c

 

[professor_frink]

Yep,

I'll post a chart later... corn went limit up last nite as well = 20c

that would be good.


Slightly off topic question-
How do you find the grains to trade? Do you spend much time looking at fundamentals for them, or is it straight out astrology, sorry charting?

 

[rederob]

Well bully for you.

BTW, have you been following grains? I have had an interesting time in that department.... wheat in particular.

Wayne
I have not followed grains at all, ever.
My real job means I barely have time to follow the market, let alone base metals (which I devote 90% of my research time to).

On the base metal front, my views on the title of this thread are probably now well known.

What so many fail to understand is that this last 2 years has not only led to high prices, it has led also to consumer destocking. That is, the high prices have caused consumers to increasingly draw from their own stockpiles, so as to avoid high spot prices.
A consequence of this is seen in copper inventories which have hardly moved, but rates of backwardation have fluctuated markedly because consumers (in particular) "know" when actual supply is tight "on the street" and when it is less tight.
The fact that copper has been in backwardation all year shows that "tightness" remains an important determinant of its price resilience.
So before commodities start to collapse, we will see significant consumer restocking - a process likely to take many months for copper, and many weeks for nickel.
On the other hand, we have zinc and lead experiencing significant weekly warehouse declines. Plus, we have a majority on non-traded metals concurrently experiencing continued robust demand.
All this towards the end of a year that was supposed to see metals return to surplus.
And to top off everything we have the DOW hitting record highs, and our own allords almost there too.
If these are the ingredients for a collapse, they are very poorly timed.
Maybe in 2007 it will come, or the next year.
Right now Blind Freddy is probably raiding his money box and finding every spare penny to put on ZFX.
And why wouldn't anyone?

 

[wayneL]

that would be good.


Slightly off topic question-
How do you find the grains to trade? Do you spend much time looking at fundamentals for them, or is it straight out astrology, sorry charting?

Prof,

You know you can chart them yourself with IB?

I'll post the symbology later

 

[professor_frink]

Prof,

You know you can chart them yourself with IB?

I'll post the symbology later

I looked at them, but I thought that would cost me to get the data. The market data for the CBOT is $55 USD a month, and I thought it would be a slight waste to do it when I'm not seriously thinking about trading them(well, not for awhile anyway)

 

[wayneL]

I looked at them, but I thought that would cost me to get the data. The market data for the CBOT is $55 USD a month, and I thought it would be a slight waste to do it when I'm not seriously thinking about trading them(well, not for awhile anyway)

You can trade them now through ECBOT.... and it's LIQUID.

$55 is only for the PIT data

Try these (Going off memory as I don't have AMI up ATM)

WZ06-ECBOT-FUT wheat
CZ06-ECBOT-FUT corn
SX06-ECBOT-FUT soybeans

 

[professor_frink]

You can trade them now through ECBOT.... and it's LIQUID.

$55 is only for the PIT data

Try these (Going off memory as I don't have AMI up ATM)

WZ06-ECBOT-FUT wheat
CZ06-ECBOT-FUT corn
SX06-ECBOT-FUT soybeans

Ohhhhhhhh

Really should go through and read more on their site, shouldn't I?

Thank you for answering a question I should have answered myself