EC trades fresh four year low and depressed commodities such as crude oil and its products

Weekly Futures Report

06.02 Filed Wednesday 3:30 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week

July Crude 73.44 70.75

July Heat 201.93 192.39

July Gas (Blended) 204.35 195.47

Crude oil rallied from oversold levels on Wednesday. With the

announced resignation of the Japanese Prime Minister, there was some

unwinding of Euro Yen cross trades and this lifted the EC higher and

with its modest advance, crude traded to better levels. Yesterday, the

EC had traded to a fresh 4 year low and this depressed commodities

such as crude oil and its products. There is the belief that austerity

measures will not be able to be invoked in Europe without resulting in

economic contraction and a resulting reduction in the use of oil. The

Department of Energy report detailing weekly supply and demand was

delayed by a day due to the observance of Memorial Day on Monday.

The trade is looking for crude stocks to come in at unchanged levels at

365.1 million barrels. The American Petroleum Institute report was

scheduled to release its report after the market close on Wednesday. Of

course, the BP leak in the Gulf continues on defying one capping

procedure after another. Money flow in crude oil remains negative.

Money flow in heating oil is negative. Even as the US is now in the

beginning of the driving season, money flow in gasoline remains

negative.

Support Resistance

July Crude 69.50 76.00

July Heat 190.00 207.00

July Gas 191.50 208.00

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METALS

Last Last Week

August Gold 1223.40 1202.70

July Silver 18.345 18.08

July Platinum 1557.80 1522.00

Gold came of in Wednesday’s trade as there was profit-taking after a

new two week high. One goal is in position to test last month by. They'll

remain strong if the basket of currencies particularly against the EC

and the end. Overnight, the Japanese prime minister announced plans

to resign and this allowed the dollar gained strength against the Yen.

Trader psychology has changed slightly towards gold as players looked

to by the metal on tips as opposed to pressing the highs. The all-time

high for gold was registered on May 14 at $1249 an ounce. Gold also

encounters three are excelling when players take losses in other markets

such as equities. Money flow in gold remains positive. Money flow in

silver remains negative. Gold is now being affected by two divergent

forces. On the one hand, you have gold trading as anti-currency with a

certain reserve of worth against paper assets. On the other side, gold

ultimately reflects inflationary pressures of which at the present time

there are none. Investor demand can only carry the gold market so high

until it becomes out of balance with other markets that it is most

frequently compared against. Because of this balancing act, gold is

subject to sharp selloffs every time it makes a new high.

Support Resistance

August Gold 1205.00 1242.00

July Silver 17.75 19.00

July Plat 1523.00 1588.00

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SOFTS

Last Last Week

July Coffee 135.30 133.90

July Sugar 13.99 15.27

Coffee traded higher but seasonal influences are starting to make their

way into the market. Some analysts are looking for drop as much 13%

over the next month. 75% of the time since 1973 prices have fallen

between the dates of May 31 of July 15. Because of the historical odds

players are cutting back their exposure in the coffee market presently.

Sugar fell in price on rising supplies. Increase production and Brazil

may help to arrest the global deficit areas and increase in sugar output

in the center South region of 26% compared to a year earlier depressed

prices. Technically the inability of the sugar market to maintain prices

above $.15 on the negative.

Support Resistance

July Coffee 132.50 138.50

July Sugar 13.50 15.50

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

Last Last Week

July Soybeans 9.324 9.38

July Corn 3.484 3.714

July Wheat 4.424 4.616

Soybeans maintained a good tone as wet weather may post some

planting and any delay or possibly reduced eventual EEO of the current

crop. Weather models are suggesting that as much as 4.2 inches of rain

may fall within key growing areas of the next five days. Some key areas

in Kansas and Michigan have twice the normal amount of rain. As far

as soybeans in the ground intentions are exactly in line with the fiveyear

average. Still, farmers worried about what field reducing yield.

Wheat plummeted to its lowest price in almost 8 months as harvesting

in the southern Great Plains etc. rates and global inventories increased.

Winter wheat supplies may jump to their best level since 2002,

according to the US Department of Agriculture. The price is down 17%

for the year. Over the past year we've had fallen 33% based on excess

global inventories and reduction of demand.

Corn scratched its way upwards from a five week low as some players

saw prices low enough to speculate that there could be increased

demand for food animal feed and bio-fuel use. Corn had been lower by

4.3% for the month of May. Better weather boosted yield forecast. Most

90% 97% of the crop is in the ground. The supply-side profile remains

bearish.

Support Resistance

July Soybeans 9.25 9.480

July Corn 3.25 3.64

July Wheat 4.25 4.66

Chuck Kespert from 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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