Weekly Futures Report

The US dollars hits a 14 month low against a basket of currencies

10.14.09

Filed Wednesday 3:30 pm

ALL CHARTS THIS WEEK ARE 60 minute bars    

                                                            Last                               Last Week   

Dec Crude                                        75.54                                        69.88  

Dec Heat                                          197.10                                     181.03

Dec XRB (Blended Gas)                  187.67                                    173.33

Crude oil traded above $75 basis November futures Wednesday on the perception that global recovery will increase demand. Oil was higher for five consecutive sessions to mirror, in part, the recent decline in the dollar. The dollar's decline means that it takes more dollars to buy barrels oil. The dollar was at a 14 month low yesterday against a basket of currencies. A revised forecast for increased demand from OPEC was a positive. Crude is up 68% for the year on the speculation that demand will eventually support higher prices.  Oil continues to show a reluctance to reflect supply and demand considerations. Stockpiles in the United States, the world's largest consumer of oil, are expected to have increased for the latest reporting week. The report from the Department of Energy will be delayed until Thursday due to the government holiday this past Monday. Market analysts are expecting a build of 1.15 million barrels. They also expect a build of over 1 million barrels in gasoline. Temperatures are unseasonably cool for October in the Northeast US.   

                                                           Support                               Resistance

Dec Crude                                             72.50                           76.17        

Dec Heat                                               190.00                          198.50

Dec Gas                                                 180.00                               190.00                                                              

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METALS

                                                                  Last                             Last Week     

Dec Gold                                             1061.90                                1043.90  

Dec Silver                                             17.875                                  17.495              

Jan Platinum                                      1366.40                               1331.40

Gold continued to trade higher over the last five sessions. Gold is now up about 20% for the year as prices spiked to fresh highs in the expectation of Indian demand at year end. Gold ETF's have also been a supportive feature as investment demand continues to dwarf physical demand. It's also thought that there is room considerable Chinese buying as that country moves foreign-currency reserves away from dollar reserves into gold. Taiwan's central bank also said it may consider placing more of its reserves in gold. Very low short-term interest rates are also a gold positive. Gold continues to be inversely correlated to global short-term interest rates. Noncommercial long positions remain at record levels, a cause for concern. The dollar at a 14 month low is also positive for gold. It's generally thought that the huge massive injections of liquidity by world central banks have migrated to gold. Technically money flow remains positive and it's difficult to point to a technical formation that suggests a top in this market. Gold's relative strength going into Wednesday's trade was above 74. A reading above 70 has historically proven to suggest overbought conditions. Silver is trading at its best levels since last July.

 

                                                    Support                                      Resistance

Dec Gold                                   1044.00                                 1080.00                                                         

Dec Silver                                   17.30                                         18.33                      

Jan Plat                                     1331.00                                        1384.00    

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SOFTS

                                                                Last                          Last Week

Dec Coffee                                         139.00                                 134.55

Mar Sugar                                          22.62                                     22.91

Money flow in coffee is positive while sugar, which could have reversed its short term trend, remains negative.             

  

 

                                                 Support                                  Resistance

Dec Coffee                              134.00                                     141.00       

Mar Sugar                                  21.10                                      23.80

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                                                                  Last                            Last Week  Jan Soybeans                                           9.98                                    9.166

Dec Corn                                                  3.83                                    3.596    

Dec Wheat                                                5.13                                   4.632

Corn continued to trade higher over the past five sessions as freezing weather may hamper harvesting. An early frost may result in the corn crop missing a bumper forecast. Market observers cautioned however that corn is basically fully mature so the real problem is a harvesting delay not damage. 74% of the corn crop in the 18 largest producing states is currently mature.

Wheat continued higher as well, to a seven week high. US exports of wheat have been poor for this year. Exports of wheat are down 35% from last year. Money flow for wheat continues to be positive. A price move to 530 would be a 61% retracement from the high in August of $5.85 to the low of $4.39 at the beginning of October.

 

 

                                                                Support                          Resistance

Jan Soybeans                                          9.73                                   10.24

Dec Corn                                                3.68                                     3.93

Dec Wheat                                              4.75                                    5.32

 

Chuck Kespert

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.