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Reopening of Enbrige Pipeline which supplies Canadian crude to the US dampen the Crude oil futures

Weekly Futures Report

 

9.15.10 Filed Wednesday 3:45 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week

October Crude 75.64 74.61

October Heat 212.35 2.0800

October Gas (Blended) 1.9540 1.9377

Crude oil came off in price on Wednesday as the Enbridge Pipeline

which supplies Canadian crude to the US was scheduled to reopen at the

end of the week. Traders believe that with the pipeline coming back on

stream sty the end of the week, concerns about supply should be

alleviated. By the close of floor trading crude was lower by 85 cents a

barrel. The pipeline had previously been breached and was losing 6,500

barrels a day. Of course, the United States is Canada’s best oil

customer. Crude had touched $78.04, the highest level since the

beginning of August due to the pipeline shutdown. Another negative for

oil, was the Bank of Japan intervention in the currency market after the

Yen had traded at 15 year highs. Another negative was a lower than

expected reading for manufacturing in the New York region. The

Federal Reserve Bank of New York’s general economic index fell t its

lowest level since July 2009. Prices did come back after the Department

of Energy stated that crude stocks for the latest reporting week fell by

2.49 million barrels to 357 million barrels. The trade was looking for a

decline of 2.5 million barrels. Supplies at Cushing, Oklahoma, the

terminus for the benchmark traded in the US fell 581,000 barrels for

the sixth straight week. Gasoline inventories also dropped by 694,000

barrels to 224 million barrels while distillates fell by 340,000 barrels.

Crude could reverse its positive intermediate trend with a negative close

tomorrow. Gasoline could also reverse with a lower close on Thursday.

Money flow for heating oil and subsequently the trend is positive for

heating oil.

Support Resistance

October Crude 75.00 78.50

October Heat 2.08 2.16

October Gas 1.925 2.025

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

METALS

Last Last Week

December Gold 1266.50 1257.20

Dec Silver 20.61 19.970

Oct Platinum 1607.70 1568.00

Gold continued to grind higher as German consumer confidence

suggested to some that the economic recovery may be slowing. Silver as

a store of value continued to push higher to its best levels in two years.

The dollar strengthened against its major trading counterparts,

particularly against the Yen after the Bank of Japan intervened. The

Yen had been trading at 15 year highs against the dollar. The key to

persistently higher gold prices isn’t inflation or a slowing or expanding

economy, the key is the cost of money. Some believe that the Chairman

of the Federal Reserve wants to return the interest rate environment

back to the 1950’s. There are those who believe that at some point in

November, the Fed will announce another round of quantitative easing

and buy as much as 1 trillion dollars in government debt to liquefy the

system. As long as interest rates hover near zero, gold will find buyers

as a way to avoid wealth erosion. Seasonal influences are a positive for

the metals. Money flow remains positive as well.

Support Resistance

December Gold 1246.00 1275.00

Dec Silver 19.63 21.00

Oct Plat 1550.00 1625.00

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

SOFTS

Last Last Week

December Coffee 194.15 191.60

March Sugar 23.82 20.79

Both coffee and sugar fell in price on Wednesday even as trends remain

positive. Sugar has surged 66% over the past four months back to levels

seen last March. Cash buyers are motivated by the idea that crops may

have been damaged in Russia and Pakistan by adverse weather.

Pakistan which is Asia’s 3rd largest user may import more sugar than

ever due to severe flood damage. At least 15% of the crop is lost. The

cash market remains tight. Prices will continue to experience high

volatility.

Coffee dropped in sympathy.

Support Resistance

December Coffee 187.00 200.00

October Sugar 21.50 25.00

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

Last Last Week

November Soybeans 10.424 10.486

December Corn 4.952 4.624

December Wheat 7.266 7.11

Soybeans continue to show overall strength as weather models for

Brazil suggest low precipitation levels and less moisture will result in

smaller crops. This La Nina weather model may persist well into next

year. A weaker dollar is also a positive for US soybean exports. Prices

had reached an 8 month high. La Nina is created by colder than normal

ocean temperatures at the surface which can change rainfall patterns.

Wheat was lower for the second consecutive session as wet weather

should improve crop yields. Wheat is 6% higher this month. Traders

expect a production reduction in Russia and the Ukraine helping to

maintain a strong bid for US wheat.

As the price of corn advances, China is attempting to find ways to boost

domestic production. China continues to be a buyer of US corn and also

continues to sell from its domestic stockpiles to prevent prices from

spiking higher. Money flow remains positive.

Support Resistance

Nov Soybeans 10.20 10.65

Dec Corn 4.75 5.054

Dec Wheat 7.15 7.58

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.0000

 

 

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