Will We See Beans In The Teens?

Technical Outlook

BONDS (MAR) 02/24/04: The daily closing price reversal up is positive. A positive setup occurred with the close over the 1st swing resistance. Near-term resistance for bonds is at 113.16 and then again at 113.24, while swing support hits at 112.15 and below there at 111.22. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 113.24. Short-term indicators suggest buying dips today.

T-NOTES(MAR) The upside closing price reversal on the daily chart is somewhat bullish. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 115.14. With the close over the 1st swing resistance number, the market is in a moderately positive position. The major trend is down with the cross over back below the 40-day moving average. Near-term resistance for the T-Notes is at 115.08 and then again at 115.14, while swing support hits at 114.18 and below there at 114.01. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

2/23/2004

The stock market was mostly off balance Monday but many expected the market to rise off the fact that Lowe’s managed to hit their earnings target. However, Lowe’s also failed to hit their revenue target and that limited the benefit of the earnings. Supposedly Wal-Mart released some favorable sales projections for the current month but even that failed to inspire the bull camp. We also think that comments from Greenspan were seen as mostly negative as the Chairman of the Federal Reserve suggested that he was not seeing increased household financial stress and that was a peculiar statement that would hint at ongoing uncertainty in the US economy.

Technical Outlook

S&P500 (MAR) 02/24/04: The market’s close below the pivot swing number is a mildly negative setup. Underlying support comes in at 1135.05 and 1130.13, with overhead resistance at 1145.95 and 1151.93. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 1130.13.

S&P E-Mini (MAR): The market made a new contract high on the rally. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 1129.38. The market tilt is slightly negative with the close under the pivot. Near-term resistance for the S&P Mini is at 1145.75 and then again at 1152.38, while swing support hits at 1134.25 and below there at 1129.38. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (MAR) The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The swing indicator gave a moderately negative reading with the close below the 1st support number. The market should run into resistance at 1484.75 and above there at 1504.88 with support at 1449.25 and 1433.88. Short-term indicators on the defensive. Consider selling an intraday bounce. The daily stochastics have crossed over down which is a bearish indication. The next downside target is 1433.9.

MINI DOW (MAR) The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market should run into resistance at 10656 and above there at 10704 with support at 10555 and 10502. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 10502. It is a slightly negative indicator that the close was lower than the pivot swing number.

CURRENCY MARKET RECAP

2/23/2004

The Dollar started out weak and mostly stayed at the opening level. However, it would appear that the Euro, Swiss and Pound are set to make some consistent gains against the Dollar especially after the Chairman of the Federal Reserve could hardly find anything positive to say about the current state of the US recovery. For instance, the Chairman suggested that he did not see signs of rising financial stress in US households. The Chairman also went on to suggest that current US spending was being boosted by real estate gains and that almost sounds like the US economy is doing anything but self propagating its expansion.

Technical Outlook

YEN (MAR): The market’s close below the 9-day moving average is an indication the short-term trend remains negative. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Swing resistance is targeted at 92.40 and above there at 92.75, with the yen finding support around 91.85 and below there at 91.65. The close under the 40-day moving average indicates the longer-term trend could be turning down. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 91.65. The 9-day RSI under 30 indicates the market is approaching oversold levels.

EURO (MAR): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 1.2466. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2466, with overhead resistance at 1.2616. The market’s short-term trend is negative as the close remains below the 9-day moving average. The major trend is down with the cross over back below the 40-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

2/23/2004

A minor short covering rally was seen in gold and with the Dollar lower Monday it would seem that the liquidation tilt in the metals last week is at least temporarily removed. However, in order to rekindle fresh buying in gold and silver, the market would seem to need something new that it hasn’t been getting. From the slight firming into the close Monday in gold it would seem that some gold longs are willing to anticipate upcoming weakness in the Dollar. The economic report slate from the US would hardly seem to foster support for the Dollar and that could be why the longs are favoring gold over silver.

Technical Outlook

SILVER (MAY): It is a slightly negative indicator that the close was lower than the pivot swing number. Initial support for silver is at 645.7 and below there at 638.8 with resistance likely at 650.4 and 656.2. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near-term support is penetrated. The next downside target is 638.8.

GOLD (APR): Support for gold today comes in near 396.90, while resistance is pegged at 401.70. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 396.90. The market’s close below the pivot swing number is a mildly negative setup. The market’s short-term trend is negative as the close remains below the 9-day moving average.

COPPER MARKET RECAP

2/23/2004

The copper market showed a little more volatility than usual with the market starting out strong, giving back the big early gains but generally managing to close higher. The copper market is still getting persistent deficit forecasts to keep the bias up and with the LME stocks falling below the psychologically important 300,000 ton level it’s becoming easier to buy into the idea that stocks might exhaust themselves sometime later this summer. About the only negative facing copper is the overbought condition and the less than stellar US economic recovery.

ENERGY MARKET RECAP

2/23/2004

The energy complex was mostly higher Monday probably in response to the big down thrust last Friday and not because of a fresh bullish development. Apparently there were some buyers in the market Monday off the idea that cold in the US and elsewhere is serving to pull down supplies and provide prices with an underpin. Reports that January OPEC oil output increased by 1.7% to 28.46 million barrels per day, probably countervailed some of the bullish sentiment that was in place for most of last week. Furthermore, gasoline prices continued to show significantly volatility in the action Monday and that is a sign that both the bulls and bears have strong opinions.

Technical Outlook

CRUDE OIL (APR): It is a mildly bullish indicator that the market closed over the pivot swing number. Support for crude is keyed on 34.08 and below there at 33.84, with resistance pegged at 34.63 and 34.94. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 34.94.

UNLEADED GAS (APR): Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near-term support is penetrated. The next downside target is 105.93. It is a slightly negative indicator that the close was lower than the pivot swing number. Resistance today is at 108.93, while support should be found around 105.93. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

HEATING OIL (APR):The market’s close below the pivot swing number is a mildly negative setup. Heating oil should encounter support around 85.81, with resistance is at 89.61. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily stochastic’s gave a bearish indicator with a crossover down. The next downside objective is now at 85.81.

CORN MARKET RECAP

2/23/2004

May corn closed 3 cents higher on the session at 294 but 3 cents below the high of the session. The surge in soybeans supported the corn just as it did for most of last week but the soybean gains Monday were much larger in scope than most of the trade seen last week. For the weekly export inspections report, corn exports were 41.2 million bushels as compared with trade expectations between 25-30 million bushels. Cumulative shipments for the season have reached 884.2 million bushels as compared with 719.9 million last year at this time. The Commitment-of-Traders report with options showed a record high net long position by the speculator of 128,312 contracts as of February 17th. The overbought condition and continued concerns and uncertainties associated with the bird flu problems in the US and in China helped to limit the buying support as well. While Argentine weather is driving soybeans higher the net impact on corn from the Argentine growing region is generally thought to be less significant. Many in the trade seem to be focusing on the corn market buying acres from the soybean market which supported a 3 1/2 cent higher trade in December corn to close at 288 1/4.

Technical Outlook

CORN (MAY) 02/24/04: Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 299 . The market’s close above the 2nd swing resistance number is a bullish indication. Market resistance comes in at 299 today, with support at 289 1/2. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. The rally brought the market to a new contract high.

SOY COMPLEX RECAP

2/23/2004

The soybean market exploded for another gain of 23 1/2 cents in the May contract to close at 907 and 33 1/4 cents in November contract to close at 705. New contract highs were achieved across the board and nearby futures hit the highest level since 1988. The market was concerned about too much rain being seen in parts of Brazil while others were concerned about ongoing dry and warm conditions in southern Brazil and Argentina. With many areas in Brazil seeing heavy rains, in the later stages of development, the market is effectively putting in a risk premium to take into consideration the rising threat to yield. The fact that Brazilian sources lowered production estimates late last week probably made the market more sensitive to the weather stories. For the weekly export inspections report, soybean exports were 18.179 million bushels as compared with trade expectations between 20-25 million bushels. Cumulative shipments for the season have reached 683.5 million bushels as compared with 735.5 million last year at this time. The soybean market might actually have been held back by shipping problems in the Gulf as some shippers pulled bids when a ship blocked one of the main channels on the Mississippi River. May oil closed 97 points higher and into new contract highs at 33.55. Nearby oil hit new 19 year highs. May Meal closed $4.70 higher to $247.60 but the close below the opening was seen as a slightly negative technical development. Bird flu uncertainties in China and Texas may have limited gains.

Technical Outlook

SOYBEANS (MAY) 02/24/04: A new contract high was made on the rally. The gap upmove on the day session chart is a bullish indicator for trend. Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. The next area of resistance is around 915 and 922 , while 1st support hits today at 898 1/2 and below there at 889 . The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 922 . The 9-day RSI over 70 indicates the market is approaching overbought levels.

MEAL (MAY): Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 280.6. The rally brought the market to a new contract high. First resistance comes in at 277.6, with support at 271.6. The market’s short-term trend is positive on a close above the 9-day moving average. The market’s close above the 2nd swing resistance number is a bullish indication. With a reading over 70, the 9-day RSI is approaching overbought levels.

BEAN OIL (MAY): The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 34.18. Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. A new contract high was made on the rally. Daily swing resistance is found at 33.94 and above there at 34.18. Support should be encountered at 33.16 and 32.62. The 9-day RSI over 70 indicates the market is approaching overbought levels.

WHEAT MARKET RECAP

2/23/2004

May wheat closed 19 cents higher on the session at 3.98 but 6 cents below the highs of the session. The wheat market was pulled along by the gains in the corn and soybeans. The USDA announced the sales of 175,000 tons of hard spring wheat and 150,000 tons of white wheat to China and there was word from the US Wheat Associates that the visiting team from China had bought an additional 900,000 tons of US wheat on their recent visit to the US. This news triggered active buying shortly after the strong opening. For the weekly export inspections report, wheat exports were 15.479 million bushels as compared with trade expectations between 15-20 million bushels. Cumulative shipments for the season have reached 808.3 million bushels as compared with 633.7 million last year at this time. News that Pakistan rejected 80,000 tons of wheat from Australia due to Karnal bunt added to the bullish tone for the session but traders believe the incident will be isolated and that Australia wheat shipments are probably not a widespread detriment to Australia exports. Rains in the southern plains are expected this week but no rain is expected in the western 1/3rd of Kansas, and that seemed to favor the bull camp Monday.

Technical Outlook

WHEAT (MAY) 02/24/04: Since the close was above the 2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early in the session. Look for near-term support at 387 1/2 and below there at 374 3/4, with resistance levels at 408 1/2 and 416 3/4. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The cross over and close above the 40-day moving average indicates the longer-term trend has turned up. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 416 3/4.

LIVE CATTLE RECAP

2/23/2004

April cattle opened lower but managed to close 80 higher on the session and to a new 6-session high. The firm tone in the cash market, the huge discount of futures to cash and talk that last weeks cash purchases of live cattle were needed at slaughter plants for early this week helped offset the disappointing news of a continued ban on beef and poultry exports to many countries. Boxed-beef cut-out values were up $1.26 to $127.27 as compared with $127.00 last week at this time. Slaughter came in at 109,000 head as compared with trade expectations at 105,000-110,000 head. Fund buyers were active.

Technical Outlook

CATTLE (APR) 02/24/04: Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 74.57. A positive setup occurred with the close over the 1st swing resistance. Consider buying pull-backs since daily studies are bullish. Support should be encountered at 73.00 and below there at 72.07. Market resistance is at 74.25 and then again at 74.57. The outside day up and close above the previous day’s high is a positive signal. The daily closing price reversal up is positive. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

LEAN HOGS RECAP

2/23/2004

April hogs closed 92 higher on the session and up 157 points from the lows of the day as selling dried up on the move under 59.50 due to the stiff discount of futures to cash and lower than expected marketings from producers. The talk of bird flu in Texas and weakness in the cash market triggered the early weakness along with bearish Cold Storage report news from Friday but the selling slowed and speculative buying emerged. The CME 2-day lean index was down 44 cents to $63.38 as compared with 64.04 last week at this time. Cash hogs are called .50-$1.00 lower for Tuesday. Slaughter came in near the high end of estimates at 384,000 head.

Technical Outlook

HOGS (APR) 02/24/04: With the close over the 1st swing resistance number, the market is in a moderately positive position. Resistance levels comes in at 61.82 and 62.27 today, while support is around 60.20 and then 59.02. The outside day up is a positive signal. The upside closing price reversal on the daily chart is somewhat bullish. Consider buying pull-backs since daily studies are bullish. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 62.27.

COCOA MARKET RECAP

2/23/2004

Cocoa prices were mostly unchanged during the session Monday as the fundamental developments continue to be few and far in between. However, the Ivory Coast did note that October through January cocoa exports declined by 22.8% when compared to last year. We have to wonder if the lower export figures were largely the impact of smuggling cocoa out of the country through Ghana. The trade should continue to watch the arrival rate closely as the main crop harvest winds down. Early in the session Monday the cocoa market saw some fund short covering but that trend didn’t continue on later in the session.

Technical Outlook

COCOA (MAY)02/24/04 The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1463 and above there at 1475 with support at 1445 and 1439. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1439.00.

COFFEE MARKET RECAP

2/23/2004

The coffee market made a strong probe down Monday but managed to recoil away from the low into the close. It would seem that both volume and open interest are falling and the technical structure of the market would seem to leave the trend pointing down. Coffee continues to see mostly favorable weather for coffee production and that might be forcing some spec longs to the sidelines. Small spec longs are expected to be pressed out of the market with many in the trade think that real support doesn’t come in until the 70 cent level.

Technical Outlook

COFFEE (MAY)2/24/04 The market tilt is slightly negative with the close under the pivot. Momentum studies are declining, but have fallen to oversold levels. The next downside objective is now at 70.05.The Coffee contract should run into resistance at 72.00 and above there at 72.45 with support at 70.8 and 70.05. The market’s short-term trend is negative as the close remains below the 9-day moving average.

SUGAR MARKET RECAP

2/23/2004

May Sugar closed 8 points higher on the session. The huge net short position of the speculator and the move to the highest level since February 3rd for May sugar leaves the market in a position to see further short-covering from fund traders this week. The Commitment-of-Traders report with options showed that as of February 17th fund traders were still holding a net short position of over 33,000 contracts. The cash markets received a boost from talk of China inquiries and from an uptick in sales to Indonesia. China cane production has been revised lower recently and talk of new import interest could be considered a bullish development is sales are confirmed. The jump in cash differentials with many end users waiting for lower prices to extend coverage could trigger a short-term jump in cash activity from other key importers. Cash premiums from Thailand for May/July delivery were quoted at 110-150 over the CSCE as compared with 50 over in early February.

Technical Outlook

SUGAR (MAY) 02/24/04: The market’s close above the 2nd swing resistance number is a bullish indication. Swing resistance comes in at 6.04, with support found at 5.86. The market’s short-term trend is positive on a close above the 9-day moving average. The major trend could be turning up with the close back above the 40-day moving average. Momentum studies are trending higher from mid-range which should support a move higher if resistance levels are penetrated. The near-term upside objective is at 6.04.

COTTON MARKET RECAP

2/23/2004

May cotton closed 39 higher on the session and to a 10 session high as traders continue to see the export pace as supportive and trader await deliveries for March cotton to get a better gage on interest in the cash markets. Fund buying was noted which helped support the market as well and weekend news from the COT reports that funds had liquidated almost all of their net long position helped provide underlying support. Recent active purchases from China helped provide support as well but there is a growing concern that the new crop situation will show a significant jump in US and world stocks with normal weather in the US and China. The Cotlook A index was unchanged at 73.50.

Technical Outlook

COTTON (MAY) 02/24/04: The market’s close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Next resistance area comes in at 71.18 and then again at 71.79, while support is targeted at 70.13 and 69.69. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The next upside target is 71.79. ORANGE JUICE (MAR)2/24/04 The gap lower price action on the day session chart is a bearish indicator for trend. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. Orange Juice should run into resistance at 60.00 and above there at 60.40 with support at 59.40 and 59.20. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily stochastics have crossed over down which is a bearish indication. The next downside objective is now at 59.2.