Chocolate Delight
Cocoa
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fundamentals became apparent. Cocoa has rallied $200 per ton since hitting its low
on December 12.
As pointed out in this morning’s futures
Pre-Opening Outlook, crop forecasts are feared to be lower because of continued
delays of harvested cocoa arriving into ports in the Ivory Coast, the world’s largest
producer of cocoa. Germany said its grindings of cocoa beans rose 19% last
quarter. The German report acted as something of a leading indicator for next
week’s anticipated European Cocoa Association (ECA) report on grindings. The ECA
accounts three-quarters of the continent’s cocoa bean grindings.
Friday’s
Commitments Of Traders Report also showed a large number of commodity funds
short the contract, leaving cocoa ripe for a short-covering rally. Cocoa soared
51 to 911.
T-bonds
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PowerRating) rose 9/32 to 103 6/32, rebounding from a three-day
slide. The threat of bankruptcy from California utilities also played a role.
Defaulting utilities could weaken bank stocks that have lent to firms such as
Southern California Edison and some traders bought bonds in a flight-to-safety
move.
Stock index futures bifurcated with drugs, basics and cars
doing well while tech languished ahead of Intel’s earnings release.
Dow futures
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fell 24.50 to 2515.50, and
S&P futures
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Reports from Vienna today where OPEC is holding a meeting
on output quotas, indicated that a 1.5 million-barrel-per-day cut was
essentially a done deal. Some OPEC officials had been calling for as much as a 2-million-barrel a day cutback. The lower 1.5 million figure is likely nearly
fully priced into the market and the 30.50 pivot resistance may be hard to break
above. Look for a short-term reversal in this contract as it may make good on
its Turtle Soup Plus One
Sell signal for today, one day late. February crude oil
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closed .24 higher at 30.29.
Unleaded gasoline left an engulfing bar at its
recent high at the .9000 level, implying a price cap and additional downside in
the energies. Unleaded gas closed down .0226 at .8782.
Also in the energies,
natural gas
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temperatures in major consuming regions.
February live cattle
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on forecasts for snow to cover Northern Texas, Oklahoma and Nebraska, the
nation’s major
producing areas. Cattle eat less and lose weight more quickly in cold weather.
Lighter animal weights mean less available supply at a time of steady to higher
demand. Cattle, from the Momentum-5
List, rallied its daily limit to an eight-year high, up 1.500 to 81.075. Back months of cattle–May and
June–are not up as steeply, suggesting the perceived demand imbalance will be
rectified in coming months.
In the metals, March copper
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down 1.85 to 82.30 after filling a gap left on January 2. Copper has rallied
off six-month lows on perceptions the economy may not be skidding into recession and
curb demand for the industrial metal.
Other softs rallied along with cocoa: March sugar
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climbed .23 to 10.23 out of a Pullback From
High,
coffee
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juice
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