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Crude oil at years highs - Most futures markets rally as US dollar still weak.

Weekly Futures Report

06.10.09

Filed 6.25 pm Wednesday     

                                                       Last                                            Last Week   

July Crude                                   71.29                                                 66.30

July Heat                                     183.12                                             174.25

July XRB (Blended Gas)           201.02                                              177.00

Crude oil shot to a seven month high after the Department of Energy released its current data regarding weekly supply and demand. At the same time as crude soared higher, gasoline traded above two dollars a gallon for the first time since October. Crude stocks dropped 4.3 million barrels to 361.6 million barrels for the latest reporting week. The trade had been looking for increase of a hundred thousand barrels. The report was viewed as being incredibly bullish. The trade was also looking for increase in gasoline stocks. Crude oil for July delivery rose almost 2%. Gasoline was higher by 2.5%. The psychology behind this market remains positive. Gasoline prices at the pump rose to an average of $2.62 a gallon nationwide, the highest since October. Stockpiles of gasoline fell by 1.55 million barrels to 201.6 million barrels. Fuel demand averaged 18.3 million barrels a day, down 6.9% from last year at this time. Fuel imports are down 2.55 million barrels. The trade is expecting to see a reduction in supplies during the summer as refiners continue to import less oil and work off inventories.  The weaker dollar also was a benefit to the price of crude oil. There has been roughly an 82% correlation between the dollar and the price of oil over the past several years. OPEC also stated that they are not going to consider production increases until the price rises to $100 a barrel. The next regularly scheduled OPEC meeting is September 9. Traders are now prepared to work with a new trading range between $60 to $90 a barrel.

           

                                                          

 

 

 

 

                                                                Support                                     Resistance

July Crude                                             68.50                                                72.00 

July Heat                                               176.00                                         185.00

July Gas                                                194.00                                          205.00                                                               

***********************     

METALS

                                                                     Last                                              Last Week     

Aug Gold                                               956.80                                                965.60

July Silver                                              15.20                                                  15.67              

July Platinum                                       1272.00                                              1293.30            

Gold turned in a lackluster session on Wednesday as a rebounding dollar offset demand. Even though crude oil reached a new, fresh seven-month high, gold languished by comparison. As short-term rates moved higher in the US and the yield on the 10 year note brushed up against 4%, the dollar rebounded modestly. Many players view the pullback in gold based on stronger dollar as temporary. Many players believe that the amount of liquidity, 12.8 trillion dollars, that has been pumped into the US banking system and the idea that the Federal Reserve would be willing to monetize debt and virtually increase the money supply by doing so will eventually create inflationary pressures in the economy. Even though money flow remains positive, gold is having a difficult time mounting any sort of sustained rally. Gold bugs have been somewhat disappointed to see the price of copper and crude oil shoot higher without being able to generate enough buying interest to participate.

 

                                                             Support                                      Resistance

Aug Gold                                             940.00                                            972.00

July Silver                                            14.80                                           15.65                           

July Plat                                               1233.00                                       1285.00

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

SOFTS

                                                                       Last                                     Last Week

July Coffee                                                  130.15                                        138.35

July Sugar                                                    15.38                                           14.89

Coffee fell in price in New York as the intermediate trend is now negative. The weather continues to be favorable in Brazil. Lower prices were blamed on profit-taking, producer selling and a generally stronger dollar. Coffee has rallied 18% this year due to tight supplies from Central America and Colombia. Money flow is positive in sugar. The general strength of the Goldman Sachs Commodity Index has proved a support to most commodities.

 

                                                           Support                                   Resistance

July Coffee                                         125.00                                      133.00           

July Sugar                                          15.20                                        15.80

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

                                                                  Last                                    Last Week

 July Soybeans                               12.46                                              11.82

July Corn                                        4.356                                               4.324

July Wheat                                       5.96                                             6.174

 A stronger dollar triggered some profit-taking in corn. The market really isn't focusing on weather as much as it's focusing on corn as being part of a commodity asset class. Corn had been up as much as 8% this month on speculation that planting delays would reduce acreage in yield potential. The CRB index of 19 raw materials was up 14% in May, the biggest monthly rise since July of 1974. Prices have been under some pressure lately due to a reduction in the forecast for livestock feed demand. Corn used to feed livestock should fall to 5.15 million bushels down from 5.3 million bushels last year at this time.

 

Wheat futures fell to their lowest price level in almost 3 weeks as the US Department of Agriculture predicted that US inventories will be higher than previously forecast next year. Futures were down 17.75 cents or 2.9% as livestock producers look to reduce herd size.

 

                                                          Support                                    Resistance

July Soybeans                                      12.175                                        12.60

July Corn                                                 4.30                                          4.52

July Wheat                                              5.89                                           6.29

Chuck Kespert

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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