Weekly Futures Report
Crude futures declined on Wednesday as the tropical depression Ida made
landfall and oil workers were able to return to work
Filed Wednesday 2:30 pm
ALL CHARTS THIS WEEK ARE Daily Bars
Jan XRB (Blended Gas)
Oil was only slightly higher during mid
day trading on Wednesday as the report from the Department of Energy regarding
weekly supply and demand was delayed by one day due to the observance of
Veterans Day. On Tuesday night, the American Petroleum Institute stated that
crude stocks rose 1.22 million barrels and this was viewed as a slight
negative for the market. At the same time, the stock market remained resilient
by trading above 10,200 and at the same time gold traded to a new high at
1119. Also, the perception that the dollar will remain week due to fiscal
policy, deficit spending and very low interest rates gives crude oil a floor
to any pullback in price action. Also, expansion of Chinese industrial demand
was seen as a positive. Another negative feature to the API report was a net
increase of 1.4 million barrels in gasoline. Crude oil declined on Wednesday
as the tropical depression Ida made landfall and oil workers were able to
return to work and the Houston shipping channel was able to reopen. Money flow
in crude oil remains positive.
Gold rallied for the eighth straight day
in New York on Wednesday. Gold continues to trade as the anti-currency. The
dollar is being sold to finance carry trades. Also, with interest rates near
zero in the US and the Federal Reserve unwilling to take back stimulus,
reluctant to drain liquidity from the system gold really doesn't have too much
competition for investment. The longer the unemployment rate shows no signs
of improving and the housing sector remains under duress the Federal Reserve
will not change its policy. Investors arenít that eager to own currency of any
nationality as just today the Bank of England downgraded prospects for the
British economy. Meanwhile, Jean Claude Trichet continues to push against the
idea of the EC becoming the world reserve currency. As for the Australian
dollar, it's a nation of 21 million people. Gold then is the winner by
default. Money flow in gold of course is positive. Also, central bank buying
notably by India was viewed as a market positive.
Last Last Week
Coffee fell in price over the last five
sessions mostly on technical considerations. It attempted to trade higher than
1.45 but failed and fell by 10 cents to 135.50 by Wednesday. Buyers were
disappointed as they had loaded up on coffee hoping that the market would
coattail the price of gold and other markets to trade higher but that failed
Sugar also fell in price over the past
five sessions as India stated that the country's second-largest producer will
start crushing sugarcane on time and avoid a possible delay as a result of a
dispute between farmers and the millers. This timely start to the crushing of
cane will ease the shortage that has made India a net importer. This will
increase the supply of sugar in the local market and further depress prices.
So far sugar has rallied 82% this year. Money flow in sugar is negative.
Last Last Week
Money flow in January soybeans remains
negative. An expansion in Chinese industrial production was a positive feature
for soybeans on Wednesday. Also higher Canadian equities were a positive. The
Canadian index is up 28% from a year. Another positive for soybeans was news
from Monsanto, the world's largest seed producer, that yields generated by
farmers with their new gender genetically modified soybean is at the low end
of its forecast range. Monsanto's genetically altered soybeans were planted on
1.5 million acres during its first year on the market. The projection was that
they would boost yields by 7.3%. The soybeans are known as Roundup ready #2.
Money flow in wheat is positive. Profit
taking didn't hurt prices midweek as wheat was up by $.13 midday on Wednesday.
More than ample supplies worldwide overhang this market.
Corn fell in price over the past week as
demand for the grain is expected to erode because of increased global
inventories of wheat. The smaller than projected US corn crop is offset by the
fact that supplies of wheat have increased. Prices on Wednesday have to close
above $4.074 basis March wheat to flip the intermediate term trend positive.
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.