The NYBOT as done whatever it could in its bungling manner to revive the thinly-traded CRB Index. It tried changing the contract specifications, lowering the point value to $200, and it tried to introduce a new index, the "Continuous Commodity Index" or CCI, which some call the "CCI Index," but would more properly be called the "CC" Index. The confusion over messing with commodity contracts certainly hasn't helped revive the sagging contract. The CCI and CRB have different numbers now, and different bases, and we will not claim to be in any way immune from the confusion that has resulted as we scramble to try to adjust our programs to the NYBOT's silly and stupid changes.
The key to what is happening to many hyper-inflated commodities such as grains and energies appears to be some perception that the Federal Reserve and Treasury Department might finally act with some semblence of responsibility to control inflation. The key to that is a strong U.S. Dollar, but the Bush Administration for the majority of its term has been pushing a weak U.S. Dollar to satisfy exporters and giant American corporations that love to outsource everything.
We think the Dollar will continue to strengthen and commodities prices continue to go down because the public is at last aware of the damage done to the economy by the bungling actions of the Federal Government, including the Greenspan years. Greenspan is certainly now regarded is a tarnished idol, and deservedly so, for all the meddling and uncertainty he introduced into unstable markets in the U.S.
Most economists regard things like Hillary's and McCain's gas tax holiday as totally missing the point as to the reason for high energy prices. Look to the real culprits, the people speculating on interest rates, the mismanaged Federal Reserve and Treasury Department printing up new money and injecting liquidity into the system (depreciating the value of the U.S. Dollar to make debts easier to repay). Who gets hurt the worst? Why as always, old people on fixed incomes. Let the poor and the sick support the rich and the elite. It's the American way! Until we get rid of incompentent jokers in office, which the current lineup of candidates shows little hope of doing, we can expect more of the same. But inflation has gotten so out of control and so overdone, bearing no relation to production costs, that despite government mismanagement, it seems a correction in commodity prices is inevitable.
Our article on the CCI Index is in the Archives Section, below.
05-06-2008: June CCI Index: Strengthening Dollar Halts Inflation
04-28-2008: June S&P 500 Index: Inflation Trap Closes
04-23-2008: June Gold: Life Cycle of a Bubble
04-10-2008: July Rough Rice: Unlimited Exports
04-04-2008: July Platinum: So. African Power Shortage
04-01-2008: May Natural Gas: Cost of Storage Significant
03-15-2008: May Lumber: Home Improvement Soars as Lumber Mills Close
03-10-2008: April Lean Hogs: Farmers Do Not Restrain Production
03-08-2008: July Soybean Oil: Supply/Demand Tops Profit Taking
03-02-2008: June British Pound: Tethered to American Economy
02-24-2008: March Swiss Franc: Safe Haven There
02-17-2008: March Cotton: Too Much In Storage
02-08-2008: March Soybeans: Acreage Shifts Elsewhere
02-03-2008: March Silver: Demand Up, Production Down
01-31-2008: March Crude Oil: OPEC Loses Control of Pricing
01-26-2008: March Cocoa: Neglect, Disease, Dry Weather
01-22-2008: March Corn: Fertilizer and Acreage Shortages
01-20-2008: March Chicago Wheat: Malthus and Global Warming
01-07-2008: March World Sugar: Ethanol Sops Up Ending Stocks
12-31-2007: March Euro Currency: Housing Slump and Sub-Prime Lending Pressure Dollar
12-30-2007: March Soybean Meal: More Acreage Needed
Updated once a week (usually on Saturdays.)
# Commodity BS Buy Sell Last Gain Intended Rough Group
(Loss) Risk Percent
11 Jul Soybean Oil C 60.39 62.10 59.65 $ 10,956 13,794 17.3% Soys
8 Jun British Pound L 196.93 197.49 $ 2,560 14,100 17.6% Currency
8 Jul Cocoa C 26.55 27.95 27.88 $ 10,960 7,600 3.2% Cocoa
20 Jul Corn C 585.30 620.00 590.80 $ 34,100 6,700 8.9% Grains
5 Jul Crude Oil C 115.01 117.53 117.53 $ 12,450 14,950 6.3% Petrol
9 Jul Cotton #2 C 71.25 74.79 71.44 $ 15,660 12,465 5.3% Cotton
9 Jun Euro Currency (1 C 157.43 159.20 155.62 $ 19,643 13,838 17.6% Currency
10 Jun Gold L 888.80 889.70 $ 600 13,900 17.0% Prec Met
8 May Lumber C 209.10 220.00 214.70 $ 9,352 12,672 5.3% Lumber
10 Jul Lean Hogs C 73.80 76.59 77.68 $ 10,860 13,240 5.6% Pork
7 Jul Natural Gas Mini C 10.77 11.20 11.24 $ 7,315 14,175 6.0% Nat Gas
13 Jul Platinum L 196.80 196.80 $ -390 13,975 17.0% Prec Met
12 Jul Rough Rice C 235.74 247.51 241.80 $ 27,888 14,400 8.9% Grains
19 Jul Sugar #11 World L 12.12 12.25 $ 2,196 14,683 6.2% Sugar
9 Jun Swiss Franc C 97.72 100.48 96.58 $ 30,780 13,725 17.6% Currency
6 Jul Silver C 17.61 17.91 16.96 $ 8,820 12,300 17.0% Prec Met
9 Jul Soybean Meal C 341.40 361.50 345.00 $ 17,820 13,230 17.3% Soys
25 Jul Soybeans S 140.28 133.70 $ 81,500 14,000 17.3% Soys
9 Jul Chicago Wheat C 878.50 868.00 815.50 $ -4,995 3,150 1.3% Wheat
Adjustment for Open Positions: -($ 86,466)
Prior to 4/21:
Other Gains/-Losses This Reporting Period: $1,008,910 ***
*** For Contracts Closed or Rolled Forward __________
Total for all Trades: $1,220,519
Trading in commodities involves substantial risk and past performance is no guarantee of future profits. Zenith does not sell advice nor does it manage discretionary accounts other than its own. Readers should be aware of the vested interest that all traders/brokers have in encouraging other traders to make the same transactions. No one should follow investment advice blindly. This web site should be used only as a "sounding board" for confirming one's own opinion. Any suggested order placements should be reviewed and reset to fit current market conditions by individual traders.Recommendations may include trades which have already been made on the same or a previous day, otherwise the issue is placed on a "watch list." Suggested trades are based upon an approximate maximum $15,000 capitalization requirement per trade, depending upon initial contract margin requirements. Zenith's actual trades may be larger. $22 per round turn for futures is deducted from profit figures. Commodity option trade recommendations are not tracked, but performance should parallel that of the underlying commodity's.
