Energies
A slight uptrend developed this week during choppy trade. This market is caught between caring about Nigeria, Iran, Iraq and upcoming hurricanes and a lack of current impediments to a proper supply channel. What will win over: future problems or a steady flow of gasoline supply heading into a calm summer season? I suppose the right forecast is the eventuality of a major event spiking energies. However, timing is everything and I just don’t see a reason to suspect it will happen tomorrow or anytime soon. Sure, play a long call spread into hurricane season, but the gut says this market heads south and tests $50 first. Natural gas puts are recommended.

Financials
Stocks ignited through historic levels and appear unstoppable. The outlook remains the same – nothing bearish but the stubborn few who play it ahead of the turn will likely be the ones who make out like bandits. Bonds remain stuck. The dollar is showing signs of key support. Throw in a break above 82 and this market will have turned momentum northbound. The Canadian dollar and yen are bullish and the euro and pound are sells despite the breakout technicals on the pound.

Grains
Grains spiked on the Canadian wheat acreage numbers and general bullish weather, but ultimately failed heading into next week. Be weary of jumping on a Monday gap down as it is unlikely the move will have follow through. The market will find it difficult to sustain any real selling pressure ahead of the growing season, regardless of how much corn gets planted. The exposure to supply problems versus the anticipated demand will keep this market inflated through the early summer. Buy corn and wheat, and don’t forget about the often overlooked and thinly traded rice market, as it is on my list of hot commodities for 2007 and is ready to take off.

Meats
Cattle prices are holding above key triple bottom support near 92. If the market breaks below it then it gets bearish momentum, but until then this market is neutral. Hogs and bellies are shorts.

Metals
Gold and silver saw strong selling pressure late in the week as the dollar showed signs of supporting. The market is more inversely correlated than most give it credit for, despite strong divergence over the past couple of years. When the market smells a trend reversal in the dollar it gets spooked and the weak longs bail out. Since I see the dollar as a buy then the metals are a sell, although the low in silver was at an interesting intraday and closing technical point and should be watched carefully as a break back below this week’s lows will be very bearish.

Softs
Coffee continued to see selling pressure all week on relatively light volume. The massive price support between 98 and 104 is expected to hold and I would see this as a bottom buying opportunity. A break below 98 and, at least on a technical level, I would have to walk away from this market. Cocoa prices remain volatile as the back and forth politics in the Ivory Coast remain a hot button issue. I see dips as buying opportunities here. OJ is facing a critical week ahead after a consolidation pattern developed following the massive plunge. OJ has a habit of not giving you a second chance on a big move and I suspect we rally from here. If we aren’t at fresh lows by Thursday I would buy in. Cotton remains a sell. Sugar calls are an excellent long term value and worth a hard look despite an ugly sell structure. This market is down over 50% from the highs and in desperate need of a dead cat bounce. Lumber remains a buy long term.



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.