Weekly Futures Report

Crude futures declined on Wednesday as the tropical depression Ida made landfall and oil workers were able to return to work

11.11.09

Filed Wednesday 2:30 pm

ALL CHARTS THIS WEEK ARE Daily Bars    

                                                            Last                               Last Week   

Jan Crude                                         79.87                                81.07  

Jan Heat                                            209.03                             212.60

Jan XRB (Blended Gas)                   201.80                            203.82

Oil was only slightly higher during mid day trading on Wednesday as the report from the Department of Energy regarding weekly supply and demand was delayed by one day due to the observance of Veterans Day. On Tuesday night, the American Petroleum Institute stated that crude stocks rose 1.22 million barrels and this was viewed as a slight negative for the market. At the same time, the stock market remained resilient by trading above 10,200 and at the same time gold traded to a new high at 1119. Also, the perception that the dollar will remain week due to fiscal policy, deficit spending and very low interest rates gives crude oil a floor to any pullback in price action. Also, expansion of Chinese industrial demand was seen as a positive. Another negative feature to the API report was a net increase of 1.4 million barrels in gasoline. Crude oil declined on Wednesday as the tropical depression Ida made landfall and oil workers were able to return to work and the Houston shipping channel was able to reopen. Money flow in crude oil remains positive.

 

 

                                                              Support                            Resistance

Jan Crude                                             77.10                            82.30        

Jan Heat                                               203.00                         215.30

Jan Gas                                                 194.00                              207.60                                                             

***********************     

METALS

                                                            Last                             Last Week     

Feb Gold                                            1119.00                          1088.50             

Mar Silver                                           17.61                              17.439              

Jan Platinum                                    1372.00                           1369.50

Gold rallied for the eighth straight day in New York on Wednesday. Gold continues to trade as the anti-currency. The dollar is being sold to finance carry trades. Also, with interest rates near zero in the US and the Federal Reserve unwilling to take back stimulus, reluctant to drain liquidity from the system gold really doesn't have too much competition for investment.  The longer the unemployment rate shows no signs of improving and the housing sector remains under duress the Federal Reserve will not change its policy. Investors aren’t that eager to own currency of any nationality as just today the Bank of England downgraded prospects for the British economy. Meanwhile, Jean Claude Trichet continues to push against the idea of the EC becoming the world reserve currency. As for the Australian dollar, it's a nation of 21 million people. Gold then is the winner by default. Money flow in gold of course is positive. Also, central bank buying notably by India was viewed as a market positive.

                                                    Support                                      Resistance

Feb Gold                                   1081.00                                 1139.00                                                          

Mar Silver                                   16.90                                            18.48                      

Jan Plat                                     1321.00                                       1407.00    

                                     *********************************

SOFTS

                                                                Last                          Last Week

Mar Coffee                                            135.80                           143.85

Mar Sugar                                              22.67                            23.59

Coffee fell in price over the last five sessions mostly on technical considerations. It attempted to trade higher than 1.45 but failed and fell by 10 cents to 135.50 by Wednesday. Buyers were disappointed as they had loaded up on coffee hoping that the market would coattail the price of gold and other markets to trade higher but that failed to materialize.

 

 

Sugar also fell in price over the past five sessions as India stated that the country's second-largest producer will start crushing sugarcane on time and avoid a possible delay as a result of a dispute between farmers and the millers. This timely start to the crushing of cane will ease the shortage that has made India a net importer. This will increase the supply of sugar in the local market and further depress prices. So far sugar has rallied 82% this year. Money flow in sugar is negative.

 

                                                Support                                  Resistance

Mar Coffee                                  132.00                                    151.10        

Mar Sugar                                    21.20                                      24.60   

                                       *****************************************         

                                                                  Last                            Last Week

 Jan Soybeans                                        9.732                                9.99

Mar Corn                                              4.076                               3.974 

Mar Wheat                                            5.502                               5.406

Money flow in January soybeans remains negative. An expansion in Chinese industrial production was a positive feature for soybeans on Wednesday. Also higher Canadian equities were a positive. The Canadian index is up 28% from a year. Another positive for soybeans was news from Monsanto, the world's largest seed producer, that yields generated by farmers with their new gender genetically modified soybean is at the low end of its forecast range. Monsanto's genetically altered soybeans were planted on 1.5 million acres during its first year on the market. The projection was that they would boost yields by 7.3%. The soybeans are known as Roundup ready #2.

Money flow in wheat is positive. Profit taking didn't hurt prices midweek as wheat was up by $.13 midday on Wednesday. More than ample supplies worldwide overhang this market.

 

Corn fell in price over the past week as demand for the grain is expected to erode because of increased global inventories of wheat. The smaller than projected US corn crop is offset by the fact that supplies of wheat have increased. Prices on Wednesday have to close above $4.074 basis March wheat to flip the intermediate term trend positive.

 

                                                                Support                          Resistance

Jan Soybeans                                          9.43                                   9.87

Mar Corn                                                3.86                                    4.22

Mar Wheat                                              5.20                                    5.60

 

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.