Crude stocks rose more than expected by .7 million barrels

04.07.10 Filed Wednesday 5:45 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week

May Crude 85.88 83.76

May Heat 224.39 216.81

May XRB (Blended) 231.47 229.72

Crude oil traded defensively on Wednesday after the Department of

Energy released its report showing a larger than expected increase in

inventories. Also, there was a surge in imports. Crude stocks rose by 1.9

8 million barrels to 356 million barrels for the latest reporting week.

The trade had been looking for an increase of 1.3 million barrels.

Imports increased by over 5% and refineries are operating at their

highest levels since October. Supply obviously is not a problem with this

market. Investment demand for crude oil seems to have outstripped

consumer demand. Distillate stocks increased by just over 1 million

barrels to 145 million barrels. This is the first increase in distillates in 10

weeks. Gasoline stocks fell by 2.5 million barrels to 222 million barrels.

Wall Street was looking for a decline of 1 million barrels. Dollar

strength against the EC which continues to suffer from the problems of

Greek indebtedness was another negative feature for the market.

Europe's economy slowed in the fourth quarter as companies cut

spending. The EC accounts for 18% of global demand. Money flow in

crude oil remains positive, however. Momentum players continue to

look for the market to attack $95 a barrel by midsummer.

Support Resistance

May Crude 85.00 87.50

May Heat 221.00 229.00

May Gas 224.00 235.00

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METALS

Last Last Week

June Gold 1153.0 1113.50

May Silver 18.199 17.48

July Platinum 1723.20 1645.40

Gold rallied Wednesday towards a one-month high as news hit the wires

that the European economy stagnated in the fourth quarter. This may

seem counterintuitive. The report reflected that the European economy

is lagging behind the recovery shown by the US economy. As Greek

indebtedness caused spreads on Greek debt to widen to their largest

ratio to German debt, there was a increase in buyers of gold as a hedge

against uncertainty in paper markets. Exactly how Greece is going to

manage its way out of its current indebtedness remains to be seen. Gold

is also supported by the idea that the Federal Reserve will keep interest

rates low the current time being. Platinum traded to a 20 month high.

Platinum is up 17% for the year. Palladium is up 25% for the year.

Silver is up 6.5% for the year while gold is up just under 4% for the

year.

Support Resistance

June Gold 1117.00 1155.00

May Silver 17.70 18.50

July Plat 1617.00 1666.00

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SOFTS

Last Last Week

May Coffee 137.55 136.50

May Sugar 16.16 16.55

Sugar continues to fall in price as the technical picture continues to

deteriorate. Prices are down 36% for the year. Sugar has been lower

seven straight weeks. Sugar doubled in price last year. The cash market

is a bit concerned with the lack of demand even though prices have

fallen so much in such a short time.

Support Resistance

May Coffee 135.00 138.50

May Sugar 16.00 16.75

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Last Last Week

May Soybeans 9.524 9.41

May Corn 3.564 3.45

May Wheat 4.752 4.504

Soybeans continued to move higher in price as increased levels of

quality control by China favors US soybeans against those imported

from Argentina. Tougher Chinese inspections may mean that China will

eventually pare back purchases from Argentina, possibly even

discontinue them. Last year China imported approximately 1.2 million

metric tons from Argentina. This number might be cut in half over the

next six months.

Corn rallied the most in six weeks as Gold rallied to a 12 week high.

Gold priced in EC reached record levels as concern over Greek

indebtedness continues. Corn is down 16% this year. The intermediate

trend in corn switched today to neutral.

Warmer, drier weather helped lift wheat to an 11 cent gain on

Wednesday. Grains were higher across the board mostly on short

covering. Money flow in wheat remains negative.

Support Resistance

May Soybeans 9.18 9.55

May Corn 3.40 3.52

May Wheat 4.40 4.82

Chuck Kespert

NY/NY