3 Things That Lifted Stocks Today

5/4/2005 Talk of an oversold condition after
funds were noted sellers of as many as 25,000 contracts yesterday helped to
trigger some short-covering. Funds were noted buyers of near 3,000 contracts
into the mid-session. Weather remains as a bearish factor with a warmer forecast
and mostly dry weather expected to support accelerated plantings in the next
several days. Some support also emerged from talk of some light damage to
emerged corn fields due to freezing weather in the past few nights helped to
support. Deliveries remain high at 1,036 contracts. A slowdown in producer
selling on the break added to the positive tone into mid-session with a steady
to firm tone for basis. For the weekly export sales report, released before the
opening, traders are looking for corn sales near 750,000-1.0 million tonnes as
compared with 493,400 tonnes last week. Support for July corn comes in at 205
1/2 with resistance at 211 1/4 and 212 1/2.

Technical Outlook

CORN (JUL) 05/05/2005: The moving average
crossover down (9 below 18) indicates a possible developing short-term
downtrend. Momentum studies are still bearish but are now at oversold levels and
will tend to support reversal action if it occurs. The close below the 18-day
moving average is an indication the longer-term trend has turned down. The
market has a slightly positive tilt with the close over the swing pivot. The
next downside objective is now at 204 1/4. The next area of resistance is around
207 and 208 1/2, while 1st support hits today at 205 and below there at 204 1/4.

 

SOY COMPLEX RECAP

5/4/2005

July Soybeans finished down 1 at 624 1/2, 5 1/2
off the high and 2 1/2 up from the low. November Soybeans closed down 3 1/2 at
615 3/4. This was 1 3/4 up from the low and 5 1/4 off the high.

July Soymeal closed down 1.1 at 190.7. This was
0.4 up from the low and 3.1 off the high.

July Soybean Oil finished up 0.16 at 22.78, 0.17
off the high and 0.33 up from the low.

5/4/2005 The market saw early buying support from
news of a strong commercial stopper for the May deliveries. A strong commercial
stopper took 213 contracts of the 243 deliveries helped boost the market early
but failure at yesterday’s peak in July soybeans turned the market lower on the
day. The warmer and relatively dry forecast for the next week is seen as a
limiting factor on rallies as planting progress should accelerate. Talk of
another adjustment higher in exports and lower in ending stocks for next week’s
supply/demand report helped to provide underlying support. For the weekly export
sales report, released before the opening, traders are looking for soybean sales
near 250,000-475,000 tonnes as compared with 273,900 tonnes last week. Meal
sales are expected near 50,000-75,000 tonnes with oil sales near 2,000-7,000
tonnes. July soybean support comes in at 623 1/4 and 621 1/2 with 629 and 631
1/2 as resistance.

Technical Outlook

BEANS (JUL) 05/05/2005: Momentum studies trending
lower at mid-range could accelerate a price break if support levels are broken.
The major trend has turned down with the cross over back below the 18-day moving
average. The market’s close below the pivot swing number is a mildly negative
setup. The next downside target is now at 617 1/4. The next area of resistance
is around 628 1/2 and 633 1/4, while 1st support hits today at 620 1/2 and below
there at 617 1/4.

MEAL (JUL) 05/05/2005: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The close under the 18-day moving average indicates the longer-term trend
could be turning down. It is a slightly negative indicator that the close was
under the swing pivot. The next downside objective is 187.9. The next area of
resistance is around 192.4 and 194.8, while 1st support hits today at 189.0 and
below there at 187.9.

BEANOIL (JUL) 05/05/2005: The downside crossover
(9 below 18) of the moving averages suggests a developing short-term downtrend.
A bullish signal was given with an upside crossover of the daily stochastics.
Momentum studies are rising from mid-range, which could accelerate a move higher
if resistance levels are penetrated. The cross over and close above the 18-day
moving average is an indication the longer-term trend has turned positive. The
market setup is supportive for early gains with the close over the 1st swing
resistance. The next upside objective is 23.24. The next area of resistance is
around 23.03 and 23.24, while 1st support hits today at 22.53 and below there at
22.24.

 

WHEAT MARKET RECAP

5/4/2005

July Wheat finished down 1/2 at 317 1/4, 3 1/2 off the high
and 1 3/4 up from the low. December Wheat closed down 1 at 334 1/4. This was 1
up from the low and 4 1/4 off the high.

5/4/2005 The market found some early support from
news that Egypt bought 110,000 tonnes of US wheat in their overnight tender for
30,000-60,000 tonnes of optional origin wheat. Ideas that the wheat was sold at
a discounted and aggressive price helped ease the bullish influence of the
purchase. Forecasts from crop scouts in northern Kansas for bumper-type yields
helped to limit the buying support as well. In addition, traders are expecting a
big crop production forecast (as of May 1st) for next weeks USDA production
report and a bearish export demand forecast from the USDA for the Supply/demand
report. Talk that the cold weather impact in Kansas might show up as scouts move
to the southern and western parts of the country helped to provide some
underlying support. Deliveries were smaller this morning at 376 lots with a
strong stopper taking 200. For the weekly export sales report, released before
the opening, traders are looking for wheat sales near 300,000-400,000 tonnes as
compared with 467,400 tonnes last week. Talk of increased chances for rain in
the dry areas of the western winter wheat belt added to the bearish tone late.
July wheat support comes in at 315 1/4 with 324 and 325 1/2 as resistance.

Technical Outlook

WHEAT (JUL) 05/05/2005: 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.
It is a slightly negative indicator that the close was under the swing pivot.
The next downside target is now at 312 1/2. The next area of resistance is
around 319 3/4 and 322 3/4, while 1st support hits today at 314 3/4 and below
there at 312 1/2.

 

LIVE CATTLE RECAP

5/4/2005

June Live Cattle finished down 0.47 at 84.92,
0.47 off the high and 0.07 up from the low.

May Feeder Cattle closed down 0.45 at 109.60.
This was 0.30 up from the low and 0.32 off the high.

The cattle market closed at the lowest level
since April 18th which increases the possibility of more long liquidation from
fund traders who were holding a hefty net long position in last weeks COT
report. Ideas that cash cattle will trade $90-$91 this week from $93 last week
along with talk of increasing supply of market-ready cattle in the weeks ahead
helped to pressure. Boxed beef cutout values at mid session were up $.38 to
$163.87 as compared with $162.90 one week ago. Slaughter came in at 124,000 head
as compared with trade expectations of 115,000-126,000 head. The higher than
expected slaughter of the past few sessions could be a sign of firm packer
demand.

Technical Outlook

CATTLE (JUN) 05/05/2005: The major trend has
turned down with the cross over back below the 40-day moving average.
Stochastics trending lower at midrange will tend to reinforce a move lower
especially if support levels are taken out. The close below the 18-day moving
average is an indication the longer-term trend has turned down. The close below
the 1st swing support could weigh on the market. The next downside objective is
84.500. The next area of resistance is around 85.200 and 85.570, while 1st
support hits today at 84.670 and below there at 84.500.

 

LEAN HOGS RECAP

5/4/2005

June Lean Hogs finished up 0.25 at 76.82, 0.27
off the high and 0.42 up from the low.

May Pork Bellies closed down 0.57 at 83.35. This
was 1.05 up from the low and 0.60 off the high.

June hogs closed 25 higher on the session as a
mild uptrend in the cash market and a moderate jump in pork values helped
support. June is not holding the typical premium to the cash market at this time
of the year and commercial buyers helped support. Talk that the break on Tuesday
was overdone and talk of higher cash markets for Thursday morning helped
support. The CME 2-Day lean Index for the period ending May 2nd came in at 73.47
which was up 1.13 from the previous session and up from 70.45 the previous week.
Slaughter came in at 371,000 head as compared with trade expectations of
370,000-384,000 head.

Technical Outlook

HOGS (JUN) 05/05/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The close below the 18-day moving average is an
indication the longer-term trend has turned down. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. The near-term
upside target is at 77.470. The next area of resistance is around 77.150 and
77.470, while 1st support hits today at 76.470 and below there at 76.100.

 

COCOA MARKET RECAP

5/4/2005

July Cocoa finished up 6 at 1496, 9 off the high
and 10 up from the low.

The cocoa market managed a new low for the move
but then managed to close slightly higher. We are beginning to note a slight
pattern of rising exchange stocks and that could also serve to pressure prices.
However, we have to think that the residual of a lower Ivory Coast crop and talk
of lower Brazilian cocoa arrivals is supportive. On the other hand, the Press is
suggesting that favorable weather on the Nigerian crop is going to promote
favorable production and that might serve to countervail some of the bullishness
off the Ivory Coast setback. We also think that persistent declines in the US
Dollar will eventually lend some support to cocoa prices.

Technical Outlook

COCOA (JUL) 05/05/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The market back below the 18-day moving average suggests the
longer-term trend could be turning down. The daily closing price reversal up on
the daily chart is somewhat positive. It is a slightly negative indicator that
the close was lower than the pivot swing number. The next upside objective is
1514. The next area of resistance is around 1505 and 1514, while 1st support
hits today at 1487 and below there at 1477.

 

COFFEE MARKET RECAP

5/4/2005

July Coffee closed up 3.55 at 125.45. This was
4.15 up from the low and 3.05 off the high.

July coffee closed 355 higher with a range of
over 700 points with speculative buying noted after the move to the move below
yesterday’s lows failed to attract new selling. A tight supply of higher quality
arabica coffee in Brazil before the main harvest gets underway helped to provide
underlying support. Brazil sold 88.3% of the 45,000 bags of government-owned
coffee stocks offered at auction. Peru production for the 2004/2005 season is
expected at just 3.067 million bags from 3.488 million last year according to
the National Coffee Board.

Technical Outlook

COFFEE (JUL) 05/05/2005: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The market now above the 18-day moving average suggests the
longer-term trend has turned up. A positive signal was given by the outside day
up. With the close over the 1st swing resistance number, the market is in a
moderately positive position. The next downside objective is now at 118.00. The
next area of resistance is around 129.05 and 132.35, while 1st support hits
today at 121.90 and below there at 118.00.

 

SUGAR MARKET RECAP

5/4/2005

July Sugar closed down 0.07 at 8.49. This was
0.04 up from the low and 0.08 off the high.

July sugar closed 7 lower on the session to a 7
session low as a lack of cash market activity has traders nervous that prices
need to move lower to attract new buying. The technical action remains weak with
the market threatening a resumption of the downtrend as a move under 845 on
Thursday would violate the minor uptrend channel in place since the April 15th
lows. Indonesia is negotiating to buy 40,500 tonnes of raw sugar for July
delivery. While the Brazil supply is up due to more active harvest of the main
center-south crop, the stronger Brazil currency is a factor which does not
encourage increased export activity. Italian 2005 sugar output is expected to
increase to near 1.52 million tonnes as compared with 1.16 million last year.
Small speculator selling was noted after weakness in London pressured futures on
the US opening.

Technical Outlook

SUGAR (JUL) 05/05/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The cross over and close above
the 18-day moving average indicates the longer-term trend has turned up. The
swing indicator gave a moderately negative reading with the close below the 1st
support number. The next upside objective is 8.62. The next area of resistance
is around 8.55 and 8.62, while 1st support hits today at 8.43 and below there at
8.38.

 

COTTON MARKET RECAP

5/4/2005

July Cotton finished down 0.18 at 53.89, 0.11 off
the high and 2.09 up from the low.

July cotton closed 18 lower on the session but up
209 points from the lows of the day as trade houses came in to support the
market after futures collapsed to the lowest level since March 24th early in the
session. December cotton challenged the March lows before closing just 29 lower
on the day. Speculative long liquidation selling pressured the market for much
of the day until trade houses emerged to support. For the weekly export sales
report, released before the opening, traders are looking for cotton sales near
200,000-500,000 bales as compared with 227,000 bales last week. For weekly
shipments, traders are looking for 300,000-400,000 bales as compared with
370,100 bales last week.

Technical Outlook

COTTON (JUL) 05/05/2005: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The market back below the 18-day moving average suggests
the longer-term trend could be turning down. It is a slightly negative indicator
that the close was under the swing pivot. The next downside objective is now at
51.20. The next area of resistance is around 54.99 and 55.59, while 1st support
hits today at 52.79 and below there at 51.20.

BOND MARKET RECAP

5/4/2005

June Bonds finished down 0-06 at 114-21, 0-17 off
the high and 1-06 up from the low.

June 10 Yr Treasury Notes finished up 0-065 at
111-185, 0-015 off the high and 0-140 up from the low.

Treasury prices fell aggressively during
the morning session but then regained most of the lost ground in the wake of
weak ISM non manufacturing readings. Even more importantly is the fact that the
ISM non manufacturing readings produced some very weak payroll readings and that
could have ramifications for the Friday morning report. The Treasury also
announced that they would actually begin to study the merits of re-issuing long
bonds and that seemed to spark the morning slide. Certainly seeing a change in
the Treasury offering slate has serious ramifications for the yield curve but
with foreign investors threatening to pull money from the US it might be a good
time to lock up some debt in longer term instruments.