This Is What We Neeed To Turn Sentiment To The Bull Camp

Solid export news along with news from the COT
reports that the speculative net short position in corn reached a record high on
January 18th helped to support the solid gains this morning. A gap higher on a
Monday is sometimes considered a positive technical development. Funds were
noted buyers of near 2000 contracts into the mid-session but when the fund
buying slowed, futures retreated to fill the gap and test unchanged on the
session. Weekly export sales came in at 915,000 tons this morning as compared
with trade expectations at 600,000-800,000 tons. Cumulative sales have reached
50.4% of the forecast for the season as compared with 51.1% on average for this
time of the year. For the weekly export inspections report, also released today,
corn shipments hit 37.97 million bushels last week as compared with trade
expectations at 25-30 million bushels. Cumulative shipments reached 35.2% of the
forecast for the season as compared with 38.2% on average for this time of the
year. Friday’s Cattle-on-Feed report showed record placements in December which
is a positive development for feed demand. Resistance for March corn comes in at
199 and 200 3/4 with support at 197 and 195 1/2.

Technical Outlook

CORN (MAR) 01/25/2005: Momentum studies are still
bearish but are now at oversold levels and will tend to support reversal action
if it occurs. The major trend has turned down with the cross over back below the
18-day moving average. With the close higher than the pivot swing number, the
market is in a slightly bullish posture. The next downside target is 195 3/4.
The next area of resistance is around 199 and 200 1/2, while 1st support hits
today at 196 1/2 and below there at 195 3/4.

 

SOY COMPLEX RECAP

1/24/2005

March Soybeans finished up 3 1/4 at 520, 5 off
the high and 1/2 up from the low. May Soybeans closed up 4 1/4 at 520 1/4. This
was 1/4 up from the low and 4 1/4 off the high.

March Soymeal closed up 0.1 at 155.9. This was
0.1 up from the low and 2.1 off the high.

March Soybean Oil finished up 0.16 at 19.74, 0.23
off the high and 0.04 up from the low.

Solid export news combined with news from the
CFTC that the speculative net short position for soybeans, meal and oil were are
all at record high levels as of January 18th helped provide solid support. Funds
were noted buyers of near 1500 oil and 1500 soybeans into the mid-session.
However, failure to move much above last weeks highs helped pull the market
lower late in the day. While there is some dryness concerns left in parts of
Argentina, drought areas of southern Brazil are expected to get good gains this
week which helped limit the buying support. Weekly export sales came in at
859,800 tons this morning as compared with trade expectations at 500,000-800,000
tons. Cumulative sales have reached 80.2% of the forecast for the season as
compared with 76.6% on average for this time of the year. Sales for meal hit
98,500 tons as compared with trade expectations at 50,000-125,000 tons. Oil
sales were solid at 43,000 tons vs. trade expectations at 10,000-30,000 tons.
For the weekly export inspections report, also released today, soybean shipments
hit 39.02 million bushels last week as compared with trade expectations at 22-28
million bushels. Cumulative shipments reached 62.1% of the forecast for the
season as compared with 55.5% on average for this time of the year. Resistance
for March soybeans comes in at 524 1/2 and 528 3/4 with support at 515 and 510.

Technical Outlook

BEANS (MAR) 01/25/2005: Momentum studies are
declining, but have fallen to oversold levels. The close below the 18-day moving
average is an indication the longer-term trend has turned down. It is a mildly
bullish indicator that the market closed over the pivot swing number. The next
downside target is 515 3/4. The next area of resistance is around 522 3/4 and
526 1/2, while 1st support hits today at 517 1/4 and below there at 515 3/4.

MEAL (MAR) 01/25/2005: Momentum studies are
declining, but have fallen to oversold levels. The close under the 18-day moving
average indicates the longer-term trend could be turning down. The market tilt
is slightly negative with the close under the pivot. The next downside objective
is now at 154.2. The next area of resistance is around 157.0 and 158.6, while
1st support hits today at 154.8 and below there at 154.2.

BEANOIL (MAR) 01/25/2005: The crossover up in the
daily stochastics is a bullish signal. Daily momentum studies are on the rise
from low levels and should accelerate a move higher on a push through the 1st
swing resistance. The major trend has turned down with the cross over back below
the 18-day moving average. The gap up on the day session chart gave a bullish
indicator and more follow through could be seen this session. With the close
over the 1st swing resistance number, the market is in a moderately positive
position. The near-term upside target is at 20.05. Consider buying pull-backs
since daily studies are bullish. The next area of resistance is around 19.87 and
20.05, while 1st support hits today at 19.61 and below there at 19.52.

 

WHEAT MARKET RECAP

1/24/2005

March Wheat finished down 1/2 at 295 1/4, 3 3/4 off the high
and 1 1/2 up from the low. May Wheat closed unchanged at 302 3/4. This was 1 1/2
up from the low and 3 1/4 off the high.

The early bounce was impressive and funds were
noted buyers of near 2500 contracts into the mid-session but a lack of a supply
threat so far for new crop and EU competition fears helped pressure the market
to the lows late in the session. The oversold condition of the market and the
bounce in the other grains helped support the early strength. Friday’s
Commitment-of-Traders report with options showed the speculative net short
position and the fund short position at a record high. Weekly export sales came
in at 476,700 tons this morning as compared with trade expectations at
250,000-400,000 tons. Cumulative sales have reached 78.2% of the forecast for
the season as compared with 69.4% on average for this time of the year. For the
weekly export inspections report, also released today, wheat shipments hit 17.39
million bushels last week as compared with trade expectations at 12-17 million
bushels. Cumulative shipments reached 69.7% of the forecast for the season as
compared with 66.7% on average for this time of the year. Fears of increased
competition from Europe helped limit the buying support and in order to compete,
traders view lower US prices as a necessity. March wheat support comes in at 293
1/2 and 292 1/4 with resistance at 296 1/2 and 298 1/2.

Technical Outlook

WHEAT (MAR) 01/25/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
close below the 18-day moving average is an indication the longer-term trend has
turned down. The downside closing price reversal on the daily chart is somewhat
negative. The market’s close below the pivot swing number is a mildly negative
setup. The next downside target is now at 290 3/4. The next area of resistance
is around 297 3/4 and 301, while 1st support hits today at 292 3/4 and below
there at 290 3/4.

 

LIVE CATTLE RECAP

1/24/2005

February Live Cattle finished down 0.57 at 88.70,
0.20 off the high and 0.55 up from the low.

January Feeder Cattle closed down 1.17 at 104.55.
This was 0.07 up from the low and 0.80 off the high.

Cattle traded lower from the start with a record
placements figure in the Cattle-on-Feed report for the month of December and
continued concerns about Canadian cattle in March helping to pressure the
market. With huge open interest and fund traders holding a hefty net long
position of over 37,000 contracts (as of January 18th) the market is vulnerable
to long liquidation selling as support levels are violated. While the supply of
cattle on feedlots for 120 days or more is at 111% of last year as of January
1st, slaughter last week was down 5.9% from last year. It may take a jump in
slaughter to see the feedlots clean-up any back-log of slaughter. In order to
achieve a higher slaughter pace, beef prices may need to move lower to attract
increased consumer demand. Boxed-beef cut-out values were down $1.04 to $151.31
at mid-session as compared with $154.92 one week ago.

Technical Outlook

CATTLE (FEB) 01/25/2005: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The major trend has turned down with the cross over back below the
18-day moving average. More selling pressure is likely given yesterday’s gap
lower price action on the day session chart. The defensive setup, with the close
under the 2nd swing support, could cause some early weakness. The next downside
objective is 87.870. The next area of resistance is around 89.070 and 89.350,
while 1st support hits today at 88.350 and below there at 87.870.

 

LEAN HOGS RECAP

1/24/2005

February Lean Hogs finished down 0.45 at 75.42,
0.07 off the high and 0.57 up from the low.

February Pork Bellies closed down 0.42 at 93.67.
This was 0.57 up from the low and 0.42 off the high.

The outlook for a hefty supply of red meet to
consume in the months just ahead helped trigger moderate selling pressures early
in the session for the hog market. Throw in a hefty net long position of the
fund trader and a weekly reversal from a contract high and April hogs may have
to endure increasing selling over the near-term. The 2-Day Lean index for the
period ending January 20th was up.36 to 73.76 as compared with 72.20 one week
previous. Ideas that meat demand could be weak over the near-term as the east
coast digs out from a snow storm added to the selling pressure as weekend
clearance could have been slow and the lost demand is not retrievable. The
Monthly cold Storage for this afternoon could impact the opening for bellies and
hogs. Traders are looking for January 1st stocks near 56-65 million pounds of
bellies as compared with 49 million last year at this time.

Technical Outlook

HOGS (FEB) 01/25/2005: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The close under
the 18-day moving average indicates the longer-term trend could be turning down.
The market’s close below the pivot swing number is a mildly negative setup. The
next downside objective is now at 74.670. The next area of resistance is around
75.750 and 75.950, while 1st support hits today at 75.120 and below there at
74.670.

 

COCOA MARKET RECAP

1/24/2005

March Cocoa finished up 40 at 1526, 4 off the
high and 40 up from the low.

The cocoa market managed an extension up on the
charts, but since the market mostly discounted the demand information last
Friday, it is a little surprising that the market would manage to mount such a
sharp rally in the wake of news that Chinese cocoa imports in 2005 would hold
steady to the prior year. Maybe the forecast for a slight rise in Chinese cocoa
products was behind the rally, as few commodity markets have been able to fully
discount the positive benefits of Chinese demand potentials when they are
floated in the Press. The total amount of cocoa imported into China was pegged
at 20,000 metric tons by Dow Jones but a progressive expansion of Chinese cocoa
products could certainly become a key issue in the future.

Technical Outlook

COCOA (MAR) 01/25/2005: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The market now above the 18-day moving average suggests the
longer-term trend has turned up. The market’s close above the 2nd swing
resistance number is a bullish indication. The next upside objective is 1561.
The next area of resistance is around 1548 and 1561, while 1st support hits
today at 1504 and below there at 1473.

 

COFFEE MARKET RECAP

1/24/2005

March Coffee closed up 1.40 at 104.65. This was
1.55 up from the low and 0.15 off the high.

Once again the coffee market was given an initial
lift by the London market but with the roasters reportedly pushing up prices it
is possible that the upside might have some extension capacity. The funds were
noted buyers during the action Monday and that means that the spec long
positioning continues to expand to what some are already calling excessively
overbought levels. The fund position remains about 10,000 contracts below the
record, but with the market climbing above the level where the last COT report
was measured in coffee could mean the fund long is tracking back toward the old
record fund positions of 48,596 contracts.

Technical Outlook

COFFEE (MAR) 01/25/2005: The moving average
crossover up (9 above 18) indicates a possible developing short-term uptrend.
Momentum studies are trending higher from mid-range, which should support a move
higher if resistance levels are penetrated. The market now above the 18-day
moving average suggests the longer-term trend has turned up. Market positioning
is positive with the close over the 1st swing resistance. The near-term upside
objective is at 106.00. The next area of resistance is around 105.50 and 106.00,
while 1st support hits today at 103.85 and below there at 102.65.

 

SUGAR MARKET RECAP

1/24/2005

March Sugar closed up 0.02 at 8.90. This was 0.05
up from the low and 0.03 off the high.

The sugar market might have been partially
undermined by talk from the USDA that they will hold talks on the import of raw
sugar for alcohol. A disruption of the domestic sugar supply would certainly
undermine sugar prices and with the sugar market short term overbought off the
January rally we can understand the markets setback off the highs Monday.
Apparently the trade also noted some producer selling around the highs Monday,
which could mean that the fund buyers were outnumbered by the producer selling.
It should also be noted that the Euro zone is throwing around some sugar reform
ideas and therefore, it is possible that some longs are growing uncomfortable
will their current positions.

Technical Outlook

SUGAR (MAR) 01/25/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The cross over and close above the 18-day moving average
indicates the longer-term trend has turned up. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. The next upside
target is 8.97. The next area of resistance is around 8.94 and 8.97, while 1st
support hits today at 8.86 and below there at 8.82.

 

COTTON MARKET RECAP

1/24/2005

March Cotton finished down 0.53 at 46.44, 0.41
off the high and 0.39 up from the low.

The market pushed moderately lower on the session
in spite of solid export sales news and strength in many of the other commodity
markets. Weekly export sales came in at 331,200 bales this morning as compared
with trade expectations at 280,000-325,000 bales. Cumulative sales have reached
72.7% of the forecast for the season as compared with 77.3% on average for this
time of the year. Export shipments came in at just 252,200 bales from
expectations of 280,000-325,000 bales. Ideas that the market was overbought
after recent strong gains helped to trigger additional long liquidation selling
and the market is finding a lack of commercial buying support beneath.

Technical Outlook

COTTON (MAR) 01/25/2005: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. The cross over and close above the 18-day moving
average indicates the longer-term trend has turned up. The market’s close below
the pivot swing number is a mildly negative setup. The next downside target is
now at 45.65. The next area of resistance is around 46.84 and 47.24, while 1st
support hits today at 46.04 and below there at 45.65.