Filed 6:58 Wednesday
Last Last Week
Sept Crude 63.35
Sept Heat 169.58
Sept XRB (Blended Gas) 182.01
Crude oil and its products fell sharply on Wednesday, the most in three
months after the Department of Energy report showed an unexpected gain in US
inventories. Market observers had been expecting a draw or a decline in crude
stocks of 1.5 million barrels. Instead, there was an increase in supplies of 5
million barrels. Also distillates were forecast to have risen by 1 million
barrels and they came in the post 2 million barrels. The increase in crude
stocks was the biggest weekly increase since April. There's just too much
supply of crude oil and not enough demand to justify higher prices. Crude oil
is up 43% for the year. Crude oil imports were higher by 8.9% to 10 million
barrels a day last week, the highest level since January. Refineries operated
at 84.6% of capacity due to slack demand. Another negative was a weak reading
for durable goods orders. Another feature to the complex was a stronger dollar
against most major foreign currencies. Another negative for the complex was a
weaker than expected consumer confidence reading. Due to excess capacity and
very weak demand crude oil could fall to $60 for the front trading month.
Last Last Week
Aug Gold 929.6
Sept Silver 13.285
Oct Platinum 1172.2
In sympathy with the fall in the price of rude oil, gold fell in price
as well. A stronger dollar help push gold prices lower as the dollar index
climbed in value for the second consecutive day. Gold was down over $9.50 for
the nearby trading month. One of the negatives for the complex was a decline
in consumer confidence. Other than that, some other economic figures offered
support including numbers released for the US housing market. But unemployment
in the United States continues to rise and this is a negative factor. As home
prices have declined, people just donít feel as wealthy as they once did and
are not eager to spend discretionary income. Another feature to the market was
the circulation of a story that the stockpile buying of copper by China may be
coming to an end. Inventories of copper at the London metals exchange
increased for the second consecutive week.
Oct Plat 1150.00
Last Last Week
Sept Coffee 122.85
Oct Sugar 18.56
Sugar is expected to rally to 28 year highs over the next several
months. The continuing shortfall in production in India is the main reason.
Previously, India had been an exporter of sugar. Now it is a net importer.
Some analysts are looking for $.25 a pound. The deficit for the coming year is
expected to reach 6 to 7 million metric tons. Sugar traded at a three year
high yesterday in New York. In addition to India, Mexico, Thailand and
Pakistan have all seen production reductions.
Last Last Week
Nov Soybeans 9.16
Sept Corn 3.206
Sept Wheat 5.114
Corn and soybeans have been under selling pressure as cool wet weather
continues to increase the size of the US crop. This weather pattern has
improved the potential yield for crops in the key growing areas. Temperatures
in the Midwest have also been below normal. There has been very little stress
on the crops. 70% of the corn crop is in good to excellent condition. Another
negative for corn was a decrease in the price of gasoline.
Wheat is also at its lowest price level since March on export prospects.
Strength of the dollar made wheat less desirable as an export item. Wheat has
fallen in price by 18% over the last two months. Prices have to fall to
improve export demand and overcome the strength of the dollar.
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.