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April 2015 Monthly Commodity Outlook Sample

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Gold has tended to make an interim peak in late February as demand for Chinese New Year and the holiday gift-giving season passes.  It then often declines into April as speculative long positions are closed in order to avoid April deliveries.  However, those longs then tend to be reinstated during early April into the next most active contract, giving the market a modest surge.

Copper is used most heavily in construction.  Thus, the industry accumulates inventory during winter and then begins to liquidate stocks into the retail market in spring.  The market tends to make its low in June, but it has often begun to falter in April.

Forex & Stocks

The eurocurrency, the primary offset to the US dollar, has tended to rally throughout the month of April with the middle of the month especially reliable.  With one exception, only the three losing years suffered more than annoying daily closing drawdowns.

The Canadian fiscal year runs April-March.  The C$ has tended to make a seasonal low by late March and then to begin a seasonal uptrend during April.  Late in the month has been especially dynamic, with drawdowns normally nonexistent, or at least manageable.

Sell in May and go away.  This old Wall Street saying was derived from years of market doldrums in summer, perhaps as investors fled for vacations, only to revive in autumn and rally during winter and early spring.  The seasonal pattern for the DJIA suggests that the final surge comes in late April and into early May a period that would coincide with last-minute tax-deferred monies being put to work in the market just after April 15.

Soy, Grains & Meats

US producers begin planting the new corn crop in April.  As they do, market interest turns to its prospects.  In contrast, old-crop stocks are well known and the pattern of consumption well established.  Thus, old-crop corn prices have tended to work lower during April, although not always by much.

By the end of the first half of the USDA crop marketing year for soybeans (Sep-Feb), far more than half the previous harvest has already been consumed.  After harvest, exports surge and domestic processors crush at capacity in order to meet soaring winter demand for soymeal.  By April, exports and domestic consumption may slow, but remaining stocks must stretch until next harvest still months away.  Thus, old-crop soybeans have tended to rally into July, when stocks are near their nadir and before the new crop is safely made.

Hog slaughter normally declines into its seasonal nadir in May/June.  As it does, prices have tended to rise not only in anticipation of that lower fresh production but also as the industry accumulates stocksin cold storage.  By April, however, high hog prices have often succumbed to surging cattle slaughter and heavy supplies of newly competitive beef.


The Florida orange harvest begins in December or January.  Because it tends to slow during March, prices have normally rallied from mid/late February into mid March after which they have usually continued to decline into the end of harvest in June/July.

Lumber is most heavily used in construction.  The industry accumulates inventory during winter in preparation, but then aggressively sells its stocks in spring and summer which is also when timber harvest is far heavier as weather improves.  Thus, prices for summer-delivery have usually declined from February into July.

Cocoa beans ripen October through August, with two crops.  The main crop, sometimes accounting for 80% of total production, is harvested by the end of March.  Thus, supplies are already heavy as the mid
crop harvest begins in May.  Prices have generally declined during deliveries against May futures.

Northern Hemisphere sugar harvest is mostly complete by March.  Thus, deliveries against May futures are often heavy, as are prices.


After winter and before summer, the so-called shoulder season, refiners aggressively accumulate stocks of crude oil.  They will need both to replenish depleted stocks of heating oil and to meet rising demand for gasoline.  In March, usually refiners slow down production so they can perform maintenance on their facilities and switch over from maximizing production of heating oil to that of gasoline.

With winter passed, stocks of diesel/heating oil are at their annual nadir.  The need to replenish inventories may not be immediately pressing, but consumption will continue with demand oupacing new production for a few weeks.

But it is demand for gasoline which drives the industry in spring.  As weather improves, so do driving conditions.  As they do, daily consumption increases.  But the end of May is also the traditional opening of driving and vacation season.  Thus, the industry accumulates inventories for summer.  The combination of increasing daily consumption and inventory accumulation accelerates demand, thereby driving price higher.
Last Updated on Friday, 27 March 2015 10:06  

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