Crude futures fell, the DOE reports increase in inventories that was greater than expected.

Weekly Futures Report

01.13.10

Filed Wednesday

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week (1.06)

Mar Crude 80.15 83.75

Mar Heat 210.78 221.35

Mar XRB (Blended Gas) 207.74 215.19

Crude oil traded to lower levels after the Department of Energy report

was released on Wednesday. The DOE reported an increase in

inventories that was greater than expected. Crude oil rose by 3.7 million

barrels to 331 million barrels for the latest reporting week. The trade

was looking for increase of 1.5 million barrels. Another negative

influence for the oil market was a report showing that the German

economy was stagnant in the fourth quarter. Germany suffered through

its worst year economically since World War II. Oil fell sharply in price

on Tuesday as there was a report that China was instructing its banks

to increase reserves against lending, essentially restricting credit to

prevent a market bubble. Traders had been eager to see the supply

figures figuring that the past 14 days of colder than normal weather

that has blanketed much of the US would result in draw-downs in

supplies, especially distillates. Temperatures in Florida were at record

lows. Nevertheless, money flow in crude oil is negative. Money flow in

heating oil is negative. Money flow in gasoline is also negative. Money

flow indicates whether or not prices are accumulating or distributing

based on price movement and volume. Additionally, another negative

feature is that temperatures are expected to move higher over the next

10 days bringing relief to homeowners.

Support Resistance

Mar Crude 78.00 82.50

Mar Heat 205.00 217.00

Mar Gas 202.00 215.00

***********************

METALS

Last Last Week 12.30

Feb Gold 1137.4 1136.50

Mar Silver 18.575 18.175

April Platinum 1575.00 1558.40

Gold managed to rebound on Wednesday after its sharpest drop in over

three weeks on Tuesday. The reason for the decline Tuesday was due to

China's instructing banks to tighten credit reserves and to preemptively

prick a potential inflationary bubble. Also, there was the negative

influence of the crop report which sent that market sharply lower on

news that the corn crop would come in at record levels and most

probably depress prices. Also, the dollar index moved back to levels not

seen since the middle December. Traders are looking for trading to be

dominated by movements in currency markets over the near-term.

Copper, often looked upon as a barometer for relative Chinese

economic strength or weakness, was lower by 11 cents on Tuesday. Gold

was higher by more than 24% last year. Money flow in gold remains

negative. Money flow and silver remains positive. Money flow in

platinum remains positive. An exchange traded fund is being introduced

for platinum and this was a partial explanation for its recent strength.

Support Resistance

Feb Gold 1105.00 1150.50

Mar Silver 17.75 19.00

April Plat 1507.00 1620.00

*********************************

SOFTS

Last Last Week 1.06

Mar Coffee 145.85 141.60

Mar Sugar 28.04 28.41

Coffee was higher on Wednesday for the first time in several sessions on

the idea that lower production levels from Mexico and Colombia will

have a negative impact on world supply and demand figures and

consequently be supportive to price. Cold weather in Mexico may have

damaged the coffee crop. Mexico is the world's sixth largest coffee

producing country. Supply in Colombia also remains tight. Coffee was

up 21% last year. Technically, coffee remains in a trading range with an

upward bias as its lows are progressively higher.

Sugar rallied on Wednesday as prices rebounded from selling pressure

seen after new recent highs were made. India stated that it was planning

to increase domestic supplies of sugar amongst other commodities to sell

in the open market to combat inflationary price pressures. Money flow

in sugar is negative.

Support Resistance

Mar Coffee 139.00 143.70

Mar Sugar 26.50 29.50

*****************************************

Last Last Week 12.30

Mar Soybeans 9.932 10.59

Mar Corn 3.83 4.216

Mar Wheat 5.346 5.672

Record corn and soybean production in the United States was

announced on Tuesday via the USDA crop report. Soybean production

surged 13% last year. Corn production jumped 8.8%. Because of heavy

rains at the end of 2009, acreage normally used to plant winter crops,

remained unplanted. These acres will now be used to plant soybeans

and corn this spring. The fundamental story has turned negative for

corn and soybeans. Also the USDA reported yesterday that wheat

inventories jumped 24% last year as world demand was hurt by

economics and production increased. Prices for wheat yesterday

dropped to their lowest levels since last June. After prices rallied in

2008 to the highest levels on record, farmers around the world increased

production of corn, soybeans, wheat and rice. World inventories for

these grains will be in a surplus position over the next two years. Export

demand continues to slow. There's a 2 million bushel carryover in corn

stocks. Money flow in soybeans is negative. Money flow in corn will turn

negative with a lower close on the 14th. Money flow in wheat is positive.

Support Resistance

Mar Soybeans 9.60 10.31

Mar Corn 3.70 4.25

Mar Wheat 5.14 5.64

Chuck Kespert

NY/NY

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT

LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO

REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS

LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN

FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN

HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS

SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS

THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF

HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE

FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN

COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL

TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO

ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING

LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT

ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS

RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF

ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY

ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL

PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT

ACTUAL TRADING RESULTS.

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