We've been obnoxiously talking about soft commodities lately.
But, it's for a good reason! And it all comes down to relative strength.
Aside from a few pockets of strength, the trends have been a mess in the broader commodity complex.
Products like Natural gas and precious metals have been hard to ignore if you're involved in the commodities markets.
There's more though.
Orange Juice futures made a new all-time high this week and look primed to begin a new leg higher.
Let's talk about how we're playing it:
First, some context:
Like Cocoa, Orange Juice futures have gone wild in recent years. OJ has rallied 450% in the last 5-years, while Cocoa rallied nearly as much in half of the time.
The momentum behind products like Cocoa and Orange Juice is off the charts.
Here's OJ consolidating at a major extension level:
The juice is in an undeniable uptrend and is above its second Fibonacci extension from the 2016-2019 drawdown.
As long as Orange Juice futures are above 450, the path of least resistance is higher toward 675.
Finally, here's a more tactical look at it:
This is what accumulation within an ongoing uptrend looks like.
While it has come a long way in a hurry, I don't want to fade this kind of strength.
With the primary trend at my back and a clear level to trade against, I want to participate in the next wave higher for the citrus fruit.
I'm buying Orange Juice futures on strength above 495, with a target of 675. The pivot high from May is my line in the sand.
COT Heatmap Highlights
Commercial hedgers added over 8,600 contracts to their largest net-long Cotton position in history.
Commercials flipped net-long Heating Oil for the first time since 2020 and added over 18,500 contracts.
Commercials added over 1,100 contracts to their net-long Feeder Cattle position.
