Filed 8:05 pm Wednesday
Last Last Week
June Crude 50.59
June Heat 133.65
June XRB (Blended Gas)
Crude oil and gasoline both rose in price after the Department of Energy
released its weekly supply and demand figures Tuesday morning. While crude oil
showed a gain of 4.5 million barrels, it was the drawdown in gasoline stocks
of 4.7 million barrels that sent the market higher. The drawdown in gasoline
was the biggest reduction since September. The trade had been looking for
gasoline stockpiles to have declined by 20,000 barrels. Another supportive
feature to the session was the weakness in the dollar ahead of the Federal
Open Market Committee meeting. Crude oil is up 14% on the year. Gasoline was
higher by five cents on the session or 3.6 and is at its highest price since
April 17. Refiners operated 82.7%, slightly lower by 0.8 percentage points
from last week. A surge in crude oil stocks of 374.7 million barrels puts
supplies at their highest levels since September 1990. Crude stocks are
running 15% higher than the five year average. Traders had been looking for
crude stocks to have increased by 1.8 million barrels. In another story
regarding the terminal port of Rotterdam, it was reported that they are
running out of room to store crude oil due to excess quantity and slow
demand. Crude oil stocks have risen 18 of the last 21 weeks. Total fuel
demand in the United States averaged 18.4 million barrels, down 6.8% last year
at this time. The oil complex was positively influenced by higher equities and
the lower dollar. Also consumer confidence came in higher than expected,
another market positive. The next regularly scheduled meeting OPEC is May 28.
Money flow in crude oil remains positive.
June Gas 135.00
Last Last Week
June Gold 897.00
July Silver 12.735
July Platinum 1099.80
Despite the fact that the dollar had a very poor performance on Tuesday
against other major counterparts, the gold turned in a very mixed performance.
The Federal Reserve left interest rates unchanged at its meeting today as many
had expected. The Federal Reserve went on to state that the economy remains
fragile and that with excess capacity and slack demand, inflationary pressures
are not a problem at this time. There was some selling after the markets
closed and gold is currently down $3.90 on Wednesday evening. Another negative
for gold was the rise in the price of equities over the past several weeks.
Gold continues to look for a theme to trade against. Gold could trade down to
875 over the next several sessions looking for a base of support.
Last Last Week
July Coffee 116.50
July Sugar 14.08
Coffee prices remained fairly strong. Declining coffee production in
Colombia is helping to support prices. A weaker dollar on Wednesday was also a
supportive feature. Columbia's expected production 10.5 million bags this year
is 16% less than last year at this time.
Sugar was also steady as India, the world's largest sugar producer, may
produce less next year than previously forecast. This may result in India
importing sugar for the second year in a row. Last February, the world global
deficit in sugar was estimated at 4.27 million tons by the International Sugar
Organization. Brazil is not expected to be able to make up this deficit. Too
many of their factories process sugar only for ethanol use.
Last Last Week
July Soybeans 10.25
July Corn 4.012
July Wheat 5.316
Corn and soybeans managed to maintain their current price levels as the
market speculated that the recent swine flu outbreak will be less disruptive
to demand for food and animal feed stocks than had been previously expected .
Corn and soybeans both fell earlier in the week as the swine flu outbreak
moved from Mexico to the United States and six other nations. Traders reason
that the previous outbreaks of severe acute respiratory syndrome and avian flu
proved not to be detrimental on a long-term basis to the world's economy.
Wednesday's gains for soybeans and corn were the largest was March 31. A
weaker dollar was also positive for grains and their export potential.
Soybeans found additional support after the forecast for Argentina's harvest
came in at 34 million metric tons, a reduction from last week’s forecast of
36.2 million tons because of drought. Argentina is the third largest exporter
in the world for soybeans. Brazil's crop of soybeans will total 57million tons
down from 61 million as previously thought. The combination of the drop in
South American production and increased demand from China is a positive for US
Heavy rains in the Midwest has delayed planting of the corn crop and may
eventually reduce yields. The weather models call for continued rain. Cool and
wet weather forecast for central growing regions will limit the corn planting
progress. About 22% of the corn crop is in the ground as of April 26. The
market is keenly aware of the swine flu situation and is looking to see if it
can be contained and not affect demand for the crop.
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.