Jurgens Bauer's Comments on the Soft Markets for Tuesday 07.02.08

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There will be no report this Thursday or Friday, as I’ll be on a mini-vacation

Coffee: Prices improved with September closing up 2.15 at 155.35, yet without any electrifying price action especially when compared to recent activity. The softening dollar may have provided support, but bullish enthusiasm seems waning. The only significant dip came early and held. The remainder of the day seemed steady. There was one brief run up when the screen got swept, but no follow through. Prices did ease somewhat following the option close, which leads me to suspect that the downside needs to be tested for vulnerability. Since there are many fresh longs that can get nervous, the down side needs to prove itself able to defend any efforts to press things. Watch out for a blow off. The short side looks vulnerable here. Can the long side be trusted?

Cocoa: Specs and funds drove prices to yet another new high. It’s almost as if this market is subject to the same influences that drive crude prices. Regardless, this market remains overbought and susceptible to a severe correction. Seems the only folks willing to sell this market still are longs liquidating and long gamma players. It is strange to see volatility not blow out on a move like the one today. Is that telling us something?

Sugar: The bullish band played on as prices gathered early strength from quality names taking 440,000 tons of sugar of the July delivery. The ethanol play was also busy at work with friendly reports out of Brazil. Yet Funds and specs appear to be interested in the technical view of the charts. 20 cents for Oct is being spoken. That makes me nervous, as does an advance of over 100 points in 2 days. RSI is signaling that a correction would be healthy and possible. V/H spread had a range between 131 and 151 points, settling at 140 points. If a dip holds, it may be a buy.

Cotton: Another relentless down day with December dropping below 7600 and closing down 229, at 7633. The beginning session saw some strength and values actually did attain the upside, with December reaching a high of 7900, but that was short lived and half an hour later prices were down a full 3 cents. A meager bounce from there failed to generate any real recovery and new lows were made when December dropped below 7600. Late session short covering, not unusual given the second day of sharp negative action, propped prices back above 7600. And following the option close additional gains were made, but any talk of a more than a temporary bottom at this point is doubtful. Look now for a sideways range as we move into the summer season unless solid demand is generated from this week’s action. West Texas weather and crop development will be the key.

Orange Juice: Another superior move on the upside as speculators and funds become attracted to the possibility of hurricanes and seek out what they consider “undervalued” assets. There was also additional play from the story circulating about the Asian citrus “psyllid”, which carries the fatal citrus greening disease. This news story obviously makes growers nervous and provides traders with a reason to cover shorts and go long, but most significantly puts OJ squarely in front of a new audience. Look for more upside.

Jurgens' Technical Support and Resistance Levels for 07.02.08
June 25th 2008 Support and Resistance Levels
Dec Cotton (CTZ) (76.33 -2.29), last 76.57
Support 76.00, 75.50, 74.37-74.16
Resistance 76.86-77.00, 77.90-78.10, 78.40-78.60
Sep Coffee (KCU) (155.35 +2.15), last 154.75
Support 151.30, 150-149.50, 148.85-148.40
Resistance 156.50-156.80
Sept Cocoa (CCU) (3275 +94), last 3283
Support 3150-3147, 3050, 3020
Resistance 3300?
Oct Sugar (SBV) (13.72 +0.62), last 13.73
Support 13.68-13.55, 13.33
Resistance 14.10-14.20,

©2008 Jurgens Bauer & Associates all rights reserved.
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DISCLAIMER: Any information and opinions contained herein comes from sources believed to be reliable, but certainly not guaranteed as to accuracy or completeness. No responsibility is assumed with respect to any statement, nor with respect to any expression of opinion herein contained. All views are the opinions of the author at the time of writing and are subject to change without notice. No statement should be construed as an offer to buy or sell a commodity. This publication is for information purposes only: Any and all trading ideas suggested are hypothetical in nature and also subject to change without notice. Commodity futures' trading is speculative by nature and investors can lose more than 100% of their account equity. DISCLAIMER
©2008 Jurgens Bauer & Associates all rights reserved