Where There’s Surprising Resilience

  • February 28, 2002
  • Paul Letourneau

In the midst of the early weakness, the March and May contracts at all three
wheat markets captured new contract lows. May Wheat
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in early trading and broke below both its S1 and S2 Pivot points. May wheat
didn’t recover from the tumble and traded in a sideways pattern for most of the
session. May wheat closed at 276.000 just below the S2 Pivot point, a 3.500 loss
on the session. Corn prices dipped Thursday on reports that U.S. corn sales to
China had been canceled — reflecting uncertainties about the market and recent
Chinese regulatory changes.

March corn
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Chicago Board of Trade. One piece of news that came out of China today was that
the Chinese have tightened regulations of imported agricultural products since
its entry last December to the World Trade Organization. Some critics are
concerned that these tighter controls, including a new certification system for
imports of genetically modified organisms are possibly attempts to protect
China’s farm sector from foreign competition.

May soybeans futures
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Board of Trade dropped before the closing bell. The May contract went as far as
dropping below the 20-day and 50-day moving averages, leaving a double bottom at
a four-day low and closed below the S1 Pivot Point. Soybeans for May delivery
ended at 440.250 down 7.25.

Crude-oil futures were flat on the New York Mercantile Exchange at midday,
then began a rally to end the session positive. April crude oil
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rose .45 to $21.74 a barrel. April heating oil
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57.15 up 1.70 and April unleaded gasoline
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67.78.

Metals were mixed in today’s trading.  April gold
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the Comex division of the New York Mercantile Exchange closed up .500 to 297.00
a troy ounce. May silver
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May copper
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Commerce Department data revealed the U.S. economy grew more than first
estimated during the fourth quarter as record car sales boosted consumer
spending. Gross domestic product, a measure of all goods and services produced
in the U.S., rose at a revised 1.4% annual rate during the quarter after
previously being estimated as a 0.2% rise. The fourth quarter’s rise was
stronger than the expected 1.0% pace of economic growth. For all of 2001, the
U.S. economy grew at a 1.2% rate.

The March U.S. dollar fell
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today’s trade, despite the fact that the U.S. economic growth data showed
surprising resilience. The dollar rose following the GDP report, then dropped to
close at 119.28 down 0.37.