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OPEC decides to leave production levels unchanged, it's believed that Nigeria is overproducing while Iraq is exempt from quotas

Weekly Futures Report

03.17.10 Filed Wednesday 6:15 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week (2.17)

May Crude 83.21 82.43

May Heat 215.13 212.77

May XRB (Blended) 230.93 228.68

OPEC, at its current meeting, decided once again to leave production

levels unchanged. They believe that there are enough signs of economic

resurgence to sop up the current glut of crude. This is the eighth

consecutive meeting without a change in quotas. Itís believed that

OPEC is currently overproducing stated levels by a supertanker a day.

OPEC currently supplies 40% of the worldís daily oil supply. Itís

believed that Nigeria is also overproducing while Iraq is exempt from

quotas. Oil now seems content to trade within a range of $70 to $90 as

the lower end of the range would result in production cuts and the high

end of this range would result in production increases. The product

spreads continue to favor gasoline against heating oil. Money flow

continues to be positive for crude. Another positive for this market was

that the Federal Reserve left short term interest rates unchanged at

their latest FOMC meeting which was a dollar negative and a

commodity market positive.

For the latest week, crude imports dropped while supplies of gasoline

and distillates fell less than forecast. Crude inventories were higher by 1

million barrels. Gas stocks dropped by 1.7 million barrels while

distillates were lower by 1.49 million barrels.

Another positive for the oil market is that it is now emblematic of a

contracting or expanding economy. Previously, higher oil prices were

viewed as a negative for stocks as profit margins were squeezed. Now,

higher stocks equates to higher oil prices as a sign of economic vitality.

Thatís the definition of a paradigm shift.

Support Resistance

May Crude 78.50 84.00

May Heat 204.00 217.80

May Gas 220.00 232.10

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

METALS

Last Last Week

June Gold 1125.30 1109.40

May Silver 17.523 17.10

April Platinum 1635.60 1594.70

Gold rallied ahead of the Fedís rate decision but declined the day after.

Part of the problem on Wednesday was goldís linkage with the EC. The

EC declined from a five week high on the idea that the problems with

Greek indebtedness have not been resolved. German Chancellor

Merkelís political party has reversed its recent position and now feel

that Greece should approach the International Monetary Fund for a

bailout, in necessary. This reflected badly on the EC and thus the

selling. Currently, gold is trading as the anti currency and interest

failed to materialize on Wednesday. Money flow in gold remains

negative. Money flow in silver is positive.

Support Resistance

June Gold 1100.00 1142.00

May Silver 17.00 17.69

April Plat 1610.00 1644.00

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

SOFTS

Last Last Week

May Coffee 133.70 132.35

May Sugar 18.37 19.69

Sugar traded to a seven month low before short covering stepped in to

support prices. In the cash market, Egypt canceled a bye of 300,000

metric tons. Money flow in sugar continues to be negative. Production

levels in India are anticipated to be better than expected. India's sugar

production may exceed 16.8 million pounds, better than a previous

estimate of 16,000,000 tons. Also, Thailand's production is expected to

be better than previously expected. Thailand is the second largest

exporter of sugar in the world Buyers in the cash market for

withholding bids in the anticipation of lower prices.

Coffee prices firmed up as inventories were at their lowest levels in

nearly 7 years. Money flow in coffee is positive.

Support Resistance

May Coffee 129.50 135.00

May Sugar 17.19 20.00

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

Last Last Week

May Soybeans 9.59 9.58

May Corn 3.740 3.654

May Wheat 4.960 4.815

Corn was better again on Wednesday as there is mounting concern over

flooding in the Midwest. Maybe as much as one third of the crop faces

record flooding. Not only has there been excessive rainfall but the

ground is saturated from the melting snows of winter. What weather

delayed last years planting as well and corn saw its highest price in the

year in June.

Wheat rallied on Wednesday as the world's fifth largest exporter, the

Ukraine, said that losses to its crops were greater than expected due to

cold weather damage. The Ukraine's output for wheat may come in at

20.9 million tons down from an earlier estimate of 25.9 million tons.

Money flow in soybeans remains positive.

Support Resistance

May Soybeans 9.30 9.705

May Corn 3.65 3.87

May Wheat 4.70 4.97

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.

 

 

 

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