A benign and choppy week is likely to be followed by a return to a sea of red as commodity and financial markets will be exposed to a critical IMF report showing global growth declines and a G7 meeting at the end of the week that should rocket the dollar higher. The Fed minutes release will also be significant since we saw two descenders last meeting. Throw in a WASDE and crop production report and we got ourselves one exciting and volatile week that options specialists like myself cannot help but get excited about.

Energies
An informal OPEC meeting scheduled for April 20th follows a month over month drop in supplies of about .3%. Dow Jones reported that China's production could increase by over 3 million barrels a day in 2008, potentially offsetting continuing supply issues in Nigeria.

The ramp up to the summer driving season will focus less on crude oil inventories and more on distillate supplies and refinery utilization. The choppiness in oil sets up a consolidation pattern near the highs, typical of a bull flag pattern a potential technical setup to new highs. Despite the pattern I take any bounce as an opportunity to accumulate puts heading into a period of potential oversupply and an expectation of an uneventful first part of the upcoming hurricane season. Natural gas set a strong secondary top and is a good short with puts on the way down to 850.

Financials
An impressive rebound in stocks last week underscores a key repetitive pattern in this market. Simply, dips are being bought and this is one seriously choppy market. Look for sell strangles and bear put ratio credit spreads on strong down days. Bonds continue to channel but will soon breakout, likely to the upside, due to continued pressure on the Fed to cut rates. The dollar is choppy and volatile, which is a good sign of a potential trend shift. Short the euro and pound. I would short the Canadian on a break below the congestion lows.



Grains
Corn broke to fresh highs as concerns over the bullish prospective plantings report were further buoyed by weather issues affecting planting. It is a little early to be worrying about yield issues on late plantings so this seems more like a week in which some fund buying came back into the market. The WASDE and crop production will shift grain momentum bearish as the choppiness in the market is congestion before a further breakdown. Expect a critical sector failure next week.

Meats
Cattle remains completely at the will of the grain markets but is in a definitively bearish technical pattern. Hog supplies are up 7% from last yea according to the USDA, and significantly above analysts' estimates.

Metals
The metals complex saw choppy trade with light volume buying followed by general selling pressure in the overnight market. This market is dependant on the U.S. dollar which is choppy in its own right. There is no support here and I suspect another wave of selling is coming shortly. Expect a strong turn following the G7 meeting at the end of the week.

Softs
Coffee setup a potential rocket style breakout to the upside for this upcoming week, timed well for upcoming May option expiration. This recent coil formation in the daily chart looks like a bearish congestion, but given the vertical selloff just prior it can just as easily be offering a baseline support and setting up a real bull run.

Cocoa is getting some favorable weather for their mid-crop which is helping to further the downside pressure in the market. A sucker's bounce is not out of the question since we just experienced a more than 20% pullback in under a month.

Cotton is offering support near a channel that existed prior to this recent v-shaped rally and reversal. Tread lightly here but a bounce is not out of the question.

OJ is getting hit with strong inventory stocks but is partially offset by some drought conditions across Florida. This weekend's rainfall was significant and may cause some selling pressure but it was not nearly enough to fix the drought and would be an opportunity to scoop up some long term calls.

Sugar production in Brazil is expected to be the highest on record and is bringing some selling pressure on fund buying bounces. A strangle here couldn't hurt as premiums have dropped out of the market a bit, but overall there is not much here.

James Mound is the head analyst for www.MoundReport.com, and author of the commodity book 7 Secrets. For a free email subscription to James Mound's Weekend Commodities Review and Trade of the Month, click here.