12.22.10 Filed Wednesday 6:30 pm
ALL CHARTS THIS WEEK ARE Hourly Bars
Last Last Week 12.15
Feb Crude 90.62 89.12
Feb Heat 254.15 249.29
Feb Gas (Blended) 240.74 230.77
Crude oil rallied to its best levels in more than two years in
the wake of
the Department of Energy report which showed US supplies fell
more
than expected. Also, a report for the US Commerce Department
stated
that the US economy grew more than previously expected in the
third
quarter as measured by Gross Domestic Product. Crude stocks fell
by
5.3 million barrels for the latest reporting week according to
the DOE.
The trade had been looking for a decrease of only 3.4 million
barrels.
The Commerce Department stated that the gross domestic product
expanded by 2.6% for the third quarter against a previous
estimate of
2.5%. Crude traded as high as $90.40 a barrel, the highest level
since
October 2008. Crude is up 14% for the year. Another positive for
the
market was the grinding rally in equities which has now taken
the S&P
to its highest closing level since September 8, 2008, just
before the
collapse of Lehman Brothers. Trading is very thin however due to
the
approaching holidays and the market will be closed on Friday. A
cautionary note should be sounded as the Vix, or implied
volatility of
the stock market, is at its lowest level in two years. The
current level of
complacency will not continue.
Support Resistance
Feb Crude 88.60 91.00
Feb Heat 246.50 256.00
Feb Gas 235.00 241.50
***********************
METALS
Last Last Week
February Gold 1385.6 1386.20
March Silver 29.25 29.25
Jan Platinum 1723.6 1713.90
Gold maintained a bid but closed little changed to values seen
last week
at this exact same time. A positive for the gold market was the
conclusion of sales by the International Monetary Fund. The IMF
sold
about 13% of its reserves. Gold is up 27% for the year. The gold
sold by
the IMF was purchased by central banks. Money flow in silver has
actually turned over for the first time in a long time so expect
profittaking
going into the end of the year. The recent backup in interest
rates
has not been a positive for the metals markets.
Support Resistance
February Gold 1376.00 1399.00
March Silver 28.80 29.90
Jan Plat 1698.00 1735.00
*********************************
SOFTS
Last Last Week
March Coffee 230.20 217.50
March Sugar 33.13 31.11
Coffee production in Brazil is expected to drop 23% next year.
This
virtually guarantees the lowest yield in four years and is a
price positive.
Coffee growers should harvest about 37 million bags down 23%
from
last year at this same time. Brazil produces about one third of
the
world’s exports. Coffee is up about 72% this year.
Sugar was higher for the fourth straight session as India, the
world’s
second largest producer, may delay exports. India does not want
to see
inflationary pressures from a domestic rise in the price of
sugar and
because of this they become net importers of sugar.
Support Resistance
March Coffee 213.50 238.50
March Sugar 27.74 35.34
*****************************************
Last Last Week
January Soybeans 13.286 12.964
March Corn 6.09 5.842
March Wheat 7.834 7.646
Labor unrest in Argentina has had the result of increasing
prices for US
soybeans being exported to China. At this point in the cycle,
China is
interested in rebuilding inventories and consequently both
soybeans and
corn are positive in trend and in money flow. Trading is thin
due to
holiday considerations and the markets will be closed on Friday.
Money
flow for both corn and soybeans remains positive. Going into the
New
Year the only headwind for the grains would be a stronger dollar
as a
result of interest yield differentials favoring the green back
and a
general backup in interest rates.
Support Resistance
January Soybeans 13.05 13.38
March Corn 5.95 6.15
March Wheat 7.56 7.91
