Gasoline inventories rise by 1.59 million barrels to the highest level since March

9.22.10 Filed Wednesday 4:50 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week

November Crude 74.70 77.15

November Heat 2.1267 2.1499

November Gas (Blended) 1.9024 1.9606

Crude oil fell in price on Wednesday after a Department of Energy

report stated that inventories increased. Crude stocks rose by 790,000

barrels to 358 million barrels. The trade was actually looking for a

decline in stocks by 1.75 million barrels. The numbers reminded traders

of potentially large supplies overhanging the market, effectively capping

a sustained price advance. Gasoline inventories rose by 1.59 million

barrels to 226 million, the highest level since March. The trade had been

looking for a drop in supplies of 250,000 barrels. Distillate stocks were

higher by 347,000 barrels to 175 million barrels. The trade was off in

their estimation in this market as well, anticipating an increase of

100,000 barrels. Crude imports also rose, adding to supply pressures.

Imports increased by 9.3 million barrels a day for crude oil and 2.5

million barrels a day for refined products. A potential positive for crude

oil was the fact that the dollar was universally lower against its major

trading pairs. In the wake of the Federal Open Market Committee

meeting, it became apparent to most market watchers that the Fed is

willing to keep short term rates near zero in an attempt to inflate the

economy. This drove the dollar lower and is a positive for commodities

priced in dollars. That being said, the supply/demand ratios negatively

weighed on the complex. Money flow in crude oil is negative.

Support Resistance

November Crude 72.50 76.95

November Heat 2.07 2.26

November Gas 1.85 1.97

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METALS

Last Last Week

December Gold 1293.70 1266.50

Dec Silver 21.15 20.61

Jan Platinum 1639.0 1611.10

Gold continued to climb higher in price in the aftermath of the Federal

Reserve left short term interest rates near zero and went on to state that

they would keep rates low indefinitely. As long as the Fed continues to

encourage this weak dollar policy, gold will continue to be subscribed.

There are those who believe that the policy will eventually result in

inflationary pressures. There are others who are buying gold as a way

to avert the erosion of wealth. Previously, real estate had been a passive

investment to maintain wealth. Now that sector can no longer be

counted upon. Safe haven demand is expected to remain strong. The

dollar traded at its lowest level in six weeks. Some trade interests now

are targeting their 2011 forecast for gold to $1350 an once. Also, by

certain technical measures, the gold silver ratio broke in favor of the

silver recently sending that market higher.

Support Resistance

December Gold 1270.00 1315.00

Dec Silver 20.60 22.00

Jan Plat 1616.00 1648.00

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SOFTS

Last Last Week

December Coffee 180.45 194.15

March Sugar 23.19 23.82

Coffee finally came off in price, lower by over 1% on Wednesday,

largely on profit taking. Coffee did have a price rejection as it

approached $2.00 a pound. Call that the tipping point for now. Money

Sugar maintained its value over the past five sessions as there was

growing concern for cane fields in India. India’s biggest grower stated

that about 10% of its fields were underwater. Adverse weather in

Brazil, Russia, China and Pakistan has hurt crop yields as well. India’s

monsoon season is running 105% of 50 year averages. Money flow in

sugar remains positive.

Support Resistance

December Coffee 175.00 194.50

October Sugar 22.30 24.30

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Last Last Week

November Soybeans 10.904 10.424

December Corn 5.506 4.952

December Wheat 7.202 7.266

Soybeans continued to power higher as the dollar continued to weaken

against most major foreign currencies. Cash demand remains strong as

the dollar is changing hands at six month lows. Speculative and

commodity fund demand remains strong as well. Money flow in

soybeans remains positive for both soybeans and corn, negative for

wheat. A reduction of yield estimates for Australian wheat brought in

some buying. Wheat had been up 59% for the year as Russia had

suspended exports sending prices up to $8.63 a bushel. Prices have since

moderated as speculative interest was worked out of the market. Going

forward, corn is anticipated to be the strongest of the three components

die to the La Nina weather pattern as below average sea level

temperatures in the Pacific results in below average rainfall in

Argentina and Brazil reducing crop yields.

Support Resistance

Nov Soybeans 10.70 11.20

Dec Corn 4.95 5.22

Dec Wheat 7.07 7.40

Chuck Kespert from NY/NY