Current Commodity Futures Positions – 7/06/08

Current Commodity Futures Positions – 7/06/08

Well not a great week – disappointed in cotton especially, and coffee to end the week. A few thoughts on the positions:

Cotton Futures
Cotton broke sharply to the downside, as I managed to pin the tail on the local top. However I believe the downside here is limited, so I’m planning to hang on for a bit. Let’s face facts – lowest level of cotton acreage in 25 years. It is going to $1+, just a matter of when. And with the Dec contract sitting at 75 cents, I like the odds of it going to $1 a lot more than I like the odds of it going to 50 cents (in fact I think if it goes much lower, it may be “back up the truck” time).

Coffee Futures
Coffee was looking strong until Friday, when the Sept contract shed 4 cents. Coffee’s volatility always makes me sick to my stomach, and this ride with it is no different. Coffee’s another crop that’s been due for a mega-spike, and we just haven’t seen it yet. Maybe this is the time, but if it’s not, I’ll look to exit quickly. However I may not be quick enough – this volatility can really nail you if it gaps down.

Sugar Futures
Looking strong, I’m planning to pyramid each cent up if this climb continues.

Live Cattle Futures
Holding tight here for now as well. Not looking to add, but watching these contracts closely. I like the Dec and Feb contracts more than I like the Oct. Everyone knows cattle is going higher, but is it already priced into the forward looking contracts? I think the upside potential still outweights any downside (which I view as minimal). However it’s frustrating to see the meats trade in concert with the grains – I think no matter where the grains go from here, the input costs will still be sufficiently high to push the meats higher in the long term. However like it or not, they are trading in concert with the grains in the short term – and the grains are down big in Asia tonight as I type, so possibly look out tomorrow.

Open Positions
Date Position Qty Month/Yr Contract Strike Call/Put Entry Price Last Price Profit/Loss Action
06/17/08 Long 1 DEC 08 Cotton 82.20 75.86 ($3,170.00)
06/26/08 Long 1 SEP 08 Coffee ‘C’ 153.30 151.25 ($768.75)
05/08/08 Long 1 OCT 08 Live Cattle 105.350 111.525 $2,470.00
05/09/08 Long 1 OCT 08 Live Cattle 106.700 111.525 $1,930.00
06/16/08 Long 1 DEC 08 Live Cattle 112.750 114.500 $700.00
06/19/08 Long 1 FEB 09 Live Cattle 116.200 116.100 ($40.00)
06/18/08 Long 1 OCT 08 Sugar #11 12.88 13.89 $1,131.20
07/01/08 Long 1 OCT 08 Sugar #11 13.90 13.89 ($11.20)
Net Profit/Loss On Open Positions: $2,241.25

Account Balances
Current Cash Balance $85,609.47
Open Trade Equity $2,241.25
Total Equity $87,850.72
Long Option Value $0.00
Short Option Value $0.00
Net Liquidating Value $87,850.72

Cashed out: $15,000.00
Total value: $102,850.72

Weekly return: -5.3%
YTD return: 31.4%

***BTW, I usually “cash out” money just to pay for taxes, rent, and cheap beer. So total value is all pre-tax.