8.04.10 Filed Wednesday 7:15 pm
ALL CHARTS THIS WEEK ARE Daily Bars
Last Last Week
September Crude 82.43 76.46
September Heat 220.05 201.78
September Gas (Blended) 217.50 206.49
Crude oil surged in price over the past five sessions to trade
at its best
level in nearly three months. The ADP private job creation
forecast
came in higher than expected and this gave support to the
market. Also,
the Institute for Supply Management also indicated better than
expected job growth in the services sector of the economy. In a
related
development, gasoline inventories climbed to their highest
levels in three
years. Oil had gained over 7% in value over the previous 4
sessions.
Gasoline stocks increased by 729,000 barrels to 233 million
barrels for
the latest reporting week. The trade had been looking for a drop
in
supplies of one million barrels. On this news, gasoline came off
in price,
actually declining for the first time in six trading sessions.
Most in the
trade believe that supplies of crude and its products are more
than
ample. Many further believe that crude’s recent run isn’t
entirely
validated by true supply and demand fundamentals. Refinery runs
are
up, supplies are up and demand is tepid. A weaker dollar over
the past
several sessions was also supportive. The Yen was trading at a
15 year
high against the dollar on Wednesday morning. A real contributor
to
future oil prices will be the US unemployment report scheduled
for
release on Friday as it provides a metric to gauge the relative
strength
or weakness of the general US economy.
Support Resistance
September Crude 80.50 83.50
September Heat 213.70 223.00
September Gas 215.00 222.00
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METALS
Last Last Week
December Gold 1197.70 1163.60
Sept Silver 18.28 17.515
Oct Platinum 1583.50 1541.70
Gold closed higher on short covering as the market managed to
reverse
its intermediate trend and flip to positive. Buying intensity
picked up as
prices pierced $1200.00 and stops were hit unleashing more buy
orders
into the market. Better than expected US economic data
encouraged
buyers. A Wall Street Journal report earlier in the week
suggested that
the Federal Reserve may enter the markets to buy back government
securities thus injecting the system with more cash and
liquidity which
could eventually lead to inflationary pressures. Also, Mideast
demand
for gold in the physical market remains good due to seasonal
considerations. On the move, gold hit a fresh two week high
while
backing off to close mid range. Another positive for the gold
market was
news that China will allow its banking sector to increase their
activity in
the gold market beyond the current five banking institutions
allowed to
import and export the metal.
Silver had a bearish price performance on Wednesday by making a
higher high, a lower low and a lower close than the preceding
trading
session. This outside reversal day is a technical warning.
Support Resistance
December Gold 1175.0 1210.00
Sept Silver 18.15 18.74
Oct Plat 1567.00 1617.00
*********************************
SOFTS
Last Last Week
September Coffee 169.75 167.40
October Sugar 18.90 18.87
Coffee saw some selling pressure after rallying to a twelve year
high.
Global coffee output is expected to expand by 12 percent to 135
million
bags for the next Brazilian crop year which begins October 1
.
Sugar rallied after a two day price drop. Buyers thought that
prices had
fallen far enough to encourage physical buying. Consumption on a
global basis is still expected to outstrip supply by 8.5 million
metric tons.
Support Resistance
September Coffee 164.50 171.50
October Sugar 17.75 19.50
*****************************************
Last Last Week
November Soybeans 10.242 9.78
December Corn 4.15 3.906
December Wheat 7.554 6.47
Soybeans have been strongly supported by an increase in demand
as a
drought has reduced production of crops in Russia and the Black
Sea.
Russia is considering limits on grain exports after the worst
drought in
50 years has stressed crops and limited production.
Wheat soared to 22 month highs on concern that Russia, one of
the
world’s largest exporters of wheat, would cut back to conserve
wheat
for domestic consumption. Russia has yet to sell grain from
government
stockpiles but this seems like a matter of when not if in terms
of
scheduling. Speculative buying is exacerbating the situation.
Egypt was
a big buyer of Russian wheat in the cash market, probably
fearful of a
proposed ban. Hot, dry weather persists and may delay August
plantings for winter wheat.
Corn has surged 21% since June due to weather related issues. US
farmers planted less corn this year than last. Until weather
models
dictate, it’s best not to attempt the short side of this market.
Support Resistance
Nov Soybeans 9.90 10.75
Dec Corn 3.945 4.25
Dec Wheat 7.00 8.00
