The crisis in the EC continues and will eventually reassert itself creating a credit crunch in Europe

06.16 Filed Wednesday 3:30 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week

August Crude 78.58 75.44

August Heat 212.65 202.93

August Gas (Blended) 213.71 203.69

Initially, crude oil had a muted reaction to the release of the weekly

Department of Energy report which stated that crude stocks rose by

1.69 million barrels to 363 million barrels for the latest reporting week.

The trade was looking for a decline of approximately 1 million barrels.

There was also a drop in refinery runs as refineries cut back on their

operating rates. Gasoline stocks declined by 636,000 barrels to 218

million barrels. Distillate stocks increased by 1.8 million barrels to 156.6

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

million barrels. Intermediate trends in a technical sense remain positive,

however for all three major components of the complex. The most

recent economic numbers have been supportive to the complex. In the

background, the crisis in the EC continues which will eventually

reassert itself creating a credit crunch in Europe and a general

economic contraction.

Support Resistance

August Crude 74.90 79.60

August Heat 200.20 213.50

August Gas 203.50 216.00

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METALS

Last Last Week

August Gold 1231.80 1234.70

July Silver 18.485 18.16

July Platinum 15712.0 1526.50

Gold came off in price on Wednesday basically on profit taking. August

gold traded at a new recent high at 1239.00 but there was little in the

news background to warrant higher values. Some traders believe that at

least for the near term, gold is capped at 1250 an ounce. Many believe

that the majority of gold buying has been out of Europe as a hedge

against an eventual declining Euro currency. Silver has not performed

as well as gold as it has aligned itself with another industrial metal,

copper. Right now, money flow in gold remains positive and is range

bound while money flow in silver remains negative.

Support Resistance

August Gold 1214.00 1249.00

July Silver 18.05 18.95

July Plat 1504.00 1598.00

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SOFTS

Last Last Week

July Coffee 158.65 134.60

July Sugar 15.95 15.12

Coffee rallied to a two year high over the past sessions but saw some

profit taking on Wednesday on the belief that the price surge is

overdone and ill timed. Brazil’s crop production should be 23% higher

than last year at this time. Coffee has exploded by more than 20% since

the beginning of the month. As the harvest is set to begin, it’s widely

thought that producers will sell heavily into this price advance.

Sugar rallied to its best level in seven weeks as import activity in the

cash market picked up. It’s thought that there’s enough physical

demand to support current levels. Momentum traders were attracted by

a 10 session streak of consecutively higher closes.

Support Resistance

July Coffee 150.65 165.00

July Sugar 15.25 16.50

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Last Last Week

July Soybeans 9.576 9.43

July Corn 3.562 3.38

July Wheat 4.612 4.286

Soybeans were higher on that idea that higher prices for crude oil may

improve bio-fuel prices. The better values seen for soybeans and corn

may be limited by excellent crop conditions in the key growing areas of

the US. The money flow for soybeans is negative.

About 77% of the corn crop is in good to excellent condition. Corn has

registered 7 consecutive better closes and money flow remains positive.

Recent weakness in the US dollar against major foreign currencies has

been a positive.

Wheat rose to a one month high over the past five sessions. Substantial

rains disrupted field work in key growing areas in the Midwest. It’s

believed that as much as six times the normal precipitation has fallen on

fields allowing prices to mover to five week highs. Money flow in wheat

is positive.

Support Resistance

July Soybeans 9.39 9.67

July Corn 3.49 3.65

July Wheat 4.40 4.81

Chuck Kespert from NY/NY