WEEKLY FUTURES REPORT
01.26.11
Filed 7:30 pm
Last Last Week 01.13
Mar Crude 87.62 91.77
Mar Heat 268.12 266.08
Mar Gas (Blended) 246.07 249.61
Oil rallied from an eight week low as the Federal Reserve at its Federal
Open Market Committee meeting kept interest rates unchanged. Some
traders thought that the recent correction was overdone and covered
shorts in front of the Federal Reserve's decision at 2:15 in the afternoon,
New York time. Another positive for the market was the fact that sales
of new homes in the United States rose more than forecast at an increase
of 18%. Also, some traders believe that Chinese demand this year will
increase crude oil demand and boost prices. The technical gauge known
as the relative strength index over a 14 day period was at its lowest level
in five months going into trading today. Another thing to notice is the
week on week change for crude which is nearly 4 dollars lower than last
week at this time while heating oil is two cents higher than last week and
gasoline is over three cents lower. Another fact to this market is the
widening spread between Brent crude traded in London and West
Texas intermediate which trades in New York. It's at or near record
levels with Brent crude trading higher than New York crude. Part of
this is due to the fact that the hub or terminus for West Texas
intermediate is Cushing Oklahoma which of course is landlocked. Some
traders believe that Brent is more indicative of true supply and demand.
Recent inventory numbers compiled by the American Petroleum
Institute indicated that crude stockpiles had risen by 2.12 million
barrels to 342 million barrels for the latest reporting week. They also
reported the gasoline stocks were higher by 1.72 million barrels to 232
million barrels. Gasoline stocks are at their highest levels since last
February. As the trading day came into the close, the dollar weakened
and this helped to lift crude higher as well. Money flow for crude oil
remains negative while money flow for heating oil remains positive.
Support Resistance
Mar Crude 85.00 88.50
Mar Heat 255.00 268.00
Mar Gas 232.50 246.00
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METALS
Last Last Week
February Gold 1345.0 1369.40
March Silver 27.565 28.68
Apr Platinum 1813.6 1835.00
Gold and silver both fell in price over the past week. Part of the
problem with the reason for the decline was the fear that the Chinese
would raise short-term interest rates to curb inflationary pressures. As
mentioned before, gold has few competitors but one of them is interest
rates. Should interest rates back up or be perceived to be entering into a
cycle of higher rates, this would negatively affect gold. Also, there has
been a reduction in asset backed gold ETFs. Gold did rebound on the
inaction by the Federal Reserve regarding interest rates. Gold continues
to be a hedge against European debt concerns. Money flow for gold
remains positive but remains negative for silver.
Support Resistance
February Gold 1315.00 1346.50
March Silver 26.30 27.30
Apr Plat 1756.00 1835.00
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SOFTS
Last Last Week
March Coffee 237.50 232.50
March Sugar 33.13 31.18
Coffee was up 7.4 cents or 3.2% on Wednesday after prices had fallen
3.8% at the beginning of the week. In the cash market, Kenya's
benchmark blend was down 13% week on week. Buyers stepped away
from the market believing that demand was good but ultimately wasn’t
strong enough to blindly drive prices ever higher. The quality of the
coffee was rated as good. Fundamentally, Kenya’s coffee production
year on year basis September may be down 27% due to difficult
growing conditions.
Sugar rallied sharply on Wednesday along with other commodities as
the Federal Reserve continues to suggest that the cost of money will be
negligible. As long as the Federal Reserve continues to keep interest
rates at inflammatory levels then commodities such as sugar should
benefit. Cash traders say demand from Russia is very good. Russia is
reducing its import tax on sugar and this is a positive for the market
Support Resistance
March Coffee 230.00 245.00
March Sugar 30.70 33.90
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Last Last Week
March Soybeans 13.854 14.114
March Corn 6.576 6.412
March Wheat 8.564 7.972
Wheat rallied sharply on Wednesday along with soybeans and corn as
export business was brisk. The United Nations continues to advise
exporting countries not to restrict shipments and help to prevent
disruptions in world grain markets. Countries in the Middle East such
as Egypt, Algeria and Morocco are very tense and they are worried
about food supplies and the possibility that food shortages could set off
riots. Other sovereign nations are stockpiling grains and this will
continue to support demand for grains. Wheat soybeans and corn all
enjoyed double-digit digit gains on the day.
Support Resistance
March Soybeans 13.46 14.22
March Corn 6.37 6.62
March Wheat 8.26 8.75
Chuck Kespert from 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.