11.10.10 Filed Wednesday 3:40 pm
ALL CHARTS THIS WEEK ARE Hourly Bars
Last Last Week
December Crude 87.80 84.90
December Heat 244.29 233.15
December Gas (Blended) 223.60 213.80
Crude oil surged on Wednesday as the US Department of Energy
stated
that there was a lower than expected drop in available supplies.
For the
latest reporting week, crude stocks were lower by 3.27 million
barrels to
364 million barrels. The trade was looking for an increase of
1.5 million
barrels. Also, inventories of gasoline and diesel fuels also
fell by more
than previously estimated levels. Another positive for the
market was a
drop in weekly jobless claims. Some traders termed the report
very
bullish. Buying enthusiasm might have been even greater but for
the
wicked selloff in the metals witnessed on Tuesday and early
Wednesday.
With an increase in the value of the underlying asset and an
accompanying increase in volatility, the CME group increased
margins
for both gold and silver which triggered a considerable long
liquidation
trade. With traders raising cash and moving to the sidelines,
selling also
found its way into the energy sector. But Wednesday’s data
resulted in
renewed buying interest and sent crude to its best level in two
years.
Crude imports were also lower, tightening supply. Refinery runs
came
in at 82.4% of capacity, slightly higher than last week
reflecting decent
demand. Distillate stocks were lower by 4.97 million barrels to
159.9
million barrels for the seventh straight weekly decline. Traders
were
looking for a drop of 2 million barrels. Money flow for crude
and its
products remain positive.
Support Resistance
December Crude 84.40 88.50
December Heat 2.36 2.50
December Gas 2.14 2.25
***********************
METALS
Last Last Week
December Gold 1403.30 1344.00
Dec Silver 27.15 24.70
Jan Platinum 1743.90 1702.40
Gold and silver finally broke from their torrid advances on
Tuesday. An
increase in the underlying value of the asset and an increase in
volatility
prompted the CME group to raise margins, the good faith money
which
needs to be posted to maintain positions overnight. Another
negative for
metals was the rally in the dollar, particularly against the EC,
on
concerns over Irish indebtedness and the negative ramifications
an Irish
default would have on the EU. Previously, gold had rallied by
29% for
the year and just Tuesday touched a record level of $1424.00 an
ounce.
On the margin increase, silver fell by 6% after reaching a 30
year high
at $29.34. Silver margins were raised to $6,500 while Palladium,
a very
thin market, lost nearly 5%. Money flow for metals remains
positive.
The Fed believes that there isn’t enough inflation in the US
economy
and will keep interest rates low until there’s evidence
suggesting
otherwise.
Support Resistance
December Gold 1363.00 1440.00
Dec Silver 25.29 30.00
Jan Plat 1720.0 1832.00
*********************************
SOFTS
Last Last Week
December Coffee 212.25 196.15
March Sugar 32.75 30.15
Sugar fell in price over the past two sessions on sympathetic
selling form
the metals complex and on the belief that current, extremely
high prices
will curb demand eventually resulting in lower values. USDA
stated that
sugar use should drop by 1% for the upcoming season after rising
over
5 a year earlier. Sugar recently traded at 29 year highs.
Coffee was also lower y 3.4% Tuesday on commodity asset class
selling
and a stronger dollar.
Support Resistance
December Coffee 203.00 224.00
March Sugar 31.50 34.00
*****************************************
Last Last Week
January Soybeans 13.194 12.374
December Corn 5.66 5.81
December Wheat 7.10 6.902
Soybeans eased off of 26 month highs on ideas that higher prices
will
curtail export demand. China, the world’s best customer, cut
back its
imports by 20% for September. Previously, imports had been 48%
higher than year ago levels.
Corn fell in price as rising production levels in China should
reduce
demand for US corn. It’s believed that China harvested a record
180
million metric tons of corn this year. Last year China was a net
importer of corn.
Wheat futures fell as an increased forecast for rain was
factored into the
near term price outlook. Prices had rallied over 50% since the
end of
June on draught conditions in key growing areas in Russia. US
dollar
strength over concern over Irish debt was a grain market
negative as
well.
Support Resistance
January Soybeans 12.39 13.58
Dec Corn 5.50 5.97
Dec Wheat 6.89 7.49
