Despite the news on oversupplies of Crude Oil, Crude trades to a 17 month high on Wed as the dollar weakened

03.31.10 Filed Wednesday 5:45 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week (3.24)

May Crude 83.76 80.48

May Heat 216.81 208.10

May XRB (Blended) 229.72 222.22

Crude oil traded to a 17 month high on Wednesday as the dollar was

generally weaker against major foreign currencies. The market did

trade off its best levels of the day upon the release of the Department of

Energy report. The agency showed that supplies of crude oil

unexpectedly rose more than forecast and that gasoline inventories were

better than expected. The oil complex continues to ignore the supply

and demand fundamentals of the market, choosing to act instead as a

proxy for other markets. Crude oil ended up today at its best level since

last October. Crude oil is higher by 5.5% for the year. Another positive

factor for the market was end of quarter book squaring and window

dressing. The Department of Energy said that crude supplies rose by

2.93 million barrels to 354 million barrels for the latest reporting week.

It was the ninth straight weekly advance. Crude oil supplies are at their

highest levels since last June. Another development for the market was

the presidential proposal to permit exploration of oil off the East Coast

of the US and an extension of drilling in the Gulf of Mexico. The added

exploration is intended to help reduce the nation’s dependence on

foreign oil. This will not have an effect on domestic oil production

however for approximately 10 years. Money flow in oil remains positive.

Support Resistance

May Crude 81.00 84.50

May Heat 210.00 218.50

May Gas 224.00 235.00

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METALS

Last Last Week

June Gold 1113.50 1086.30

May Silver 17.48 16.59

July Platinum 1645.40 1593.40

Gold rose on Wednesday to close out a six straight quarterly gain. The

dollar was weaker against most major foreign currencies on a

disappointing job loss figure from the ADP private forecast. Market

observers had been expecting an increase in jobs and when the ADP

forecast showed a net loss of 23,000, the dollar traded lower. Greece

plans on selling dollar denominated bonds in the coming weeks to

address its deficit problems. Concern over Greece's debt has resulted in

a drop of 5.5% for the Euro this year. A lack of confidence in paper

currencies has led to increased gold demand. There's been a distinct

move away from the EC as a reserve currency into other currencies

including gold. Import demand by India for gold during this period has

been good. Money flow in gold and silver are positive.

Support Resistance

June Gold 1095.00 1125.00

May Silver 17.10 17.75

July Plat 1617.00 1666.00

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SOFTS

Last Last Week

May Coffee 136.50 134.50

May Sugar 16.55 17.85

Coffee rallied over the past five sessions as the trade expects a decline in

the output from Vietnam because of a lack of rainfall. The amount of

Vietnamese exports for the first quarter of this year is 20% less

compared with last year at this time. The money flow in coffee remains

positive.

For the quarter, sugar prices fell the most since 1985. India and Brazil

should enjoy bumper crops next season. Trade sources are expecting

sugar to fall another 10%. Other sources believe that sugar will be

down in excess of 50% for the year. Sugar is down 45% from last year's

29 year high of over $.30. Money flow in sugar remains negative.

Support Resistance

May Coffee 131.00 140.00

May Sugar 16.00 18.70

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Last Last Week

May Soybeans 9.41 9.60

May Corn 3.45 3.65

May Wheat 4.504 4.76

On Wednesday, soybeans fell the most in three months and corn traded

at its lowest level since last October. The US Department of Agriculture

report stated that corn inventories are up 11% from last year at this

time leaving them at their highest levels since 1987. The soybean crop

was estimated at 1.27 billion bushels, 5.5% more than previously

estimated. Soybeans are down 2% for the quarter. Money flow in grains

is negative. It's almost difficult to remember that just back in 2008 there

was such a concern about food shortages that there were riots in Haiti

and Indonesia.

Support Resistance

May Soybeans 9.15 9.83

May Corn 3.40 3.62

May Wheat 4.45 4.80

Chuck Kespert

NY/NY