Friday, May 10, 2013

Trading Update

There's only been a little bit of action on the trading front for me this week as it seems this is a reasonably quiet period for spreads. I do however have a couple of trades I like and a few on the watchlist.

Natural Gas
We've finally started seeing the weather become more mild across much of the US and as a result the builds in storage are starting to increase. Yesterday we saw a build of 88 BCF which was somewhat inline with expectations and the result was a relatively muted move in the front month contract as well as our previous spread.

This makes me think that the shoulder season has been factored in and as a result it might be a good time to get out of our old spread in which the seasonal window ends on May 17th.

The Oct-Dec spread above does still look decent and there is some potential to move into this one should we get a bit of a pullback.

 Live Cattle/ Lean Hogs
I've been trying to get this one at 29 and it finally traded at our price over the last few days.

The talk around is that the buying in hogs in the lead up to memorial day (second largest day for grilling behind Independence Day) is coming to an end and as a result hog prices could potentially come off and we might get a quick bounce.

Crude Oil
This one was somewhat technical in that Crude continued to bounce off the 1.60-1.80 level. We were able to work a good price on this one after Wednesday's smaller than expected inventory build.

Yesterday some dollar strength and equity weakness helped it bounce off the support level once again.

Live Cattle
This one is just on the watchlist for now and I'm still trying to work a good price. I like 1.0 as we've seen a continued bounce off that level. It's been moving sideways somewhat over the last week but I'll keep an eye on it.

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