Beans On The Move–Here’s Why

Technical Outlook

#BONDS (JUN) 4/28/2004: The market setup is
supportive for early gains with the close over the 1st swing resistance.
Near-term resistance for bonds is at 108.18 and then again at 108.25, while
swing support hits at 107.27 and below there at 107.11. A positive signal for
trend short-term was given on a close over the 9-bar moving average. Rising from
over sold levels, daily momentum studies would support higher prices especially
on a close above resistance. The next upside objective is 108.25. Daily studies
suggest buying dips today.

T-NOTES(JUN) The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside objective is at 111.20. The
market’s close above the 2nd swing resistance number is a bullish indication.
Near-term resistance for the T-Notes is at 111.14 and then again at 111.20,
while swing support hits at 110.27 and below there at 110.14. The market’s
short-term trend is negative as the close remains below the 9-day moving
average.

 

STOCK INDICES RECAP

4/27/2004

Given the strength in the economic numbers and
earnings reports so far this week it is surprising that the stock market has not
reacted more positively. Both consumer confidence and existing home sales were
way above market expectations. renewed fighting of coalition forces against
insurgents in Iraq and reports of terrorist bombings in Syria have also shaken
the confidence of the bulls. While the market may see more backing and filling
Wednesday, Thursday’s GDP could be another surprisingly strong number. As the
economic evidence mounts that growth continues to accelerate in the 2nd quarter,
we think stocks will focus more on the economy & earnings potential rather than
minor rate hikes

Technical Outlook

#S&P500 (JUN) 4/28/2004: The close over the pivot
swing is a somewhat positive setup. Underlying support comes in at 1132.15 and
1127.68, with overhead resistance at 1143.65 and 1150.68. The close above the
9-day moving average is a positive short-term indicator for trend. Momentum
studies are rising from mid-range which could accelerate a move higher if
resistance levels are penetrated. The near-term upside objective is at 1150.68.

S&P E-Mini (JUN): Positive momentum studies in
the neutral zone will tend to reinforce higher price action. The next upside
target is 1150.75. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. Near-term resistance for the S&P Mini is at
1143.75 and then again at 1150.75, while swing support hits at 1132.25 and below
there at 1127.75. The market’s close above the 9-day moving average suggests the
short-term trend remains positive.

NASDAQ (JUN) A positive signal for trend
short-term was given on a close over the 9-bar moving average. The market tilt
is slightly negative with the close under the pivot. The market should run into
resistance at 1495.25 and above there at 1506.88 with support at 1474.75 and
1465.88. Stochastics are at mid-range, but trending higher which should
reinforce a move higher if resistance levels are taken out. The next upside
objective is 1506.88.

MINI DOW (MAR) The close above the 9-day moving
average is a positive short-term indicator for trend. The market should run into
resistance at 10516 and above there at 10563 with support at 10430 and 10391.
Momentum studies are rising from mid-range which could accelerate a move higher
if resistance levels are penetrated. The near-term upside target is at 10563.
The close over the pivot swing is a somewhat positive setup.

 

CURRENCY MARKET RECAP

4/27/2004

The Dollar’s failure to rally off the much
stronger than expected economic data is an indication the market needs to
correct technically before heading higher. While the Fed continues to downplay
the timing of a rate hike, the hot economic numbers should begin to foster
concern that the fed will raise rates sooner rather than later. The Euro was
able to get a lift from indications that the ECB does not plan to lower rates
while Swiss National Bank could raise rates soon. The Yen fell sharply on
aggressive Asian position squaring ahead of the Golden Week holiday beginning
Thursday.

Technical Outlook

#CURRENCIES 4/28/2004: YEN (JUN): A negative
signal for trend short-term was given on a close under the 9-bar moving average.
The gap lower on the day session chart is bearish and puts the market on the
defensive. There could be some early pressure today given the market’s negative
setup with the close below the 2nd swing support. Swing resistance is targeted
at 91.72 and above there at 91.87, with the yen finding support around 91.28 and
below there at 90.99. The market back below the 40-day moving average suggests
the longer-term trend could be turning down. A bearish signal was triggered on a
crossover down in the daily stochastics. The next downside objective is 90.99.

EURO (JUN): Stochastics are rising from over sold
levels which is bullish and should support higher prices. The near-term upside
target is at 1.1994. The defensive setup, with the close under the 2nd swing
support, could cause some early weakness. Swing support for the Euro comes in at
1.1812, with overhead resistance at 1.1994. The close above the 9-day moving
average is a positive short-term indicator for trend. The close below the 40-day
moving average is an indication the longer-term trend is down. More selling
pressure is likely given yesterday’s gap lower price action on the day session
chart.

 

PRECIOUS METALS RECAP

4/27/2004

June gold garnered more support Tuesday from a
weaker dollar and a rebound in the Euro. However, the market would still need a
close back over 411.60 before convincing us that a low is in place. The economic
numbers continue to come out much higher than expected. Once the Dollar corrects
technically, the market should resume its uptrend and attract investment away
from the precious metals and a much stronger than expected GDP number could be
the catalyst to do just that.

Technical Outlook

#P-METALS 4/28/2004: SILVER (JUL): The market has
a bullish tilt coming into today’s trade with the close above the 2nd swing
resistance. Initial support for silver is at 632.0 and below there at 632.0 with
resistance likely at 632.0 and 632.0. A negative signal for trend short-term was
given on a close under the 9-bar moving average. Daily stochastics declining
into oversold territory suggest the selling may be drying up soon. The next
downside objective is 632.0. The market is approaching over sold levels on an
RSI reading under 30. If yesterday’s gap higher on the day session chart holds,
additional buying could develop this session.

GOLD (JUN): Support for gold today comes in near
395.08, while resistance is pegged at 402.08. Stochastics are rising from over
sold levels which is bullish and should support higher prices. The near-term
upside target is at 402.08. Short-term indicators suggest buying pullbacks
today. Market positioning is positive with the close over the 1st swing
resistance. The close above the 9-day moving average is a positive short-term
indicator for trend.

 

COPPER MARKET RECAP

4/27/2004

Like the stock market, the copper market seems to
be held back by fears that the fed will raise rates rather than focusing on the
developing strength in the economy which is bullish for copper demand. Copper
trades poor especially given the weakness in the Dollar and the continuing
decline in LME stocks. Funds have yet to return on the spec side of the copper
market after the recent sell-off.

 

ENERGY MARKET RECAP

4/27/2004

Energy markets had somewhat of a delayed reaction
to the weekend terrorist attempts to disrupt Iraq oil production with Jun
unleaded and June crude oil rallying to new contract highs Tuesday. The
uncertainty surrounding the possibility of another attempt by terrorist to
disrupt world oil production has sharply raised market anxiety levels. As a
result, the bulls still have full control of the complex. With coalition forces
launching an air strike against insurgents in Fallujah and reports of a
terrorist band setting off several explosions in Damascus, Syria the fear that
oil supplies from a destabilized Middle East will be disrupted should keep
energy prices firm and market volatility high.

Technical Outlook

#ENERGIES 4/28/2004: CRUDE OIL (JUN): The market
rallied to a new contract high. Follow through buying looks likely if the market
can hold yesterday’s gap on the day session chart. There could be more upside
follow through since the market closed above the 2nd swing resistance. Support
for crude is keyed on 37.29 and below there at 37.00, with resistance pegged at
37.78 and 37.98. The close above the 9-day moving average is a positive
short-term indicator for trend. Daily stochastics have risen into overbought
territory which will tend to support reversal action if it occurs. The near-term
upside target is at 37.98.

UNLEADED GAS (JUN): Rising stochastics at
overbought levels warrant some caution for bulls. The next upside objective is
121.56. The market has a bullish tilt coming into today’s trade with the close
above the 2nd swing resistance. Resistance today is at 121.56, while support
should be found around 118.16. The market made a new contract high on the rally.
If yesterday’s gap higher on the day session chart holds, additional buying
could develop this session. A positive signal for trend short-term was given on
a close over the 9-bar moving average.

HEATING OIL (JUN): The close over the pivot swing
is a somewhat positive setup. Heating oil should encounter support around 92.63,
with resistance is at 95.63. The close above the 9-day moving average is a
positive short-term indicator for trend. Momentum studies trending lower from
overbought levels is a bearish indicator and would tend to reinforce lower price
action. The next downside target is now at 92.63.

 

CORN MARKET RECAP

4/27/2004

Funds were noted buyers of near 6000 contracts by
mid-session which helped pull futures sharply higher on the day. Aggressive
commercial buying in the July calls, continued concerns with tightness in Asia
and the US and ideas that the market is oversold after the recent correction
helped to support. Gulf basis was steady to higher. The surge in soybeans and
news that Taiwan bought 56,000 tons of US corn overnight were also seen as
positive factors. There is tightness in Asia as countries like Malaysia who
normally buy from Thailand and China are in search of offers. Commercials were
active buyers of the July calls which helped pull futures higher. There are some
concerns with corn crops in Illinois and Iowa which have emerged if temperatures
dip below freezing in the week ahead. As of Sunday, the crop was 37% planted as
compared with 20% last week, 24% last year and 20% as the 14-year average for
this time of the year. The highest planted acreage number for this week in the
past 14 years was in 1994 when 42% of the corn crop was planted. Short-term
support for December corn comes in at 307 1/2 and 304 with 314 1/4 and 319 1/2
(50% correction of the April 8th to April 21st break) as resistance.

Technical Outlook

#CORN (JUL) 4/28/2004: Momentum studies are still
bearish, but are now at oversold levels and will tend to support reversal action
if it occurs. The next downside target is now at 302 3/4. There could be more
upside follow through since the market closed above the 2nd swing resistance.
Market resistance comes in at 326 3/4 today, with support at 302 3/4. The close
above the 9-day moving average is a positive short-term indicator for trend.

 

SOY COMPLEX RECAP

4/27/2004

In spite of a lack of new headline news for the
soybean complex, fund traders were active buyers in old crop soybeans for much
of the session. Tight supplies in the US for this summer and continued revisions
lower in the South American crop size are factors which provided early support.
The lack of large trader or fund selling provided ideas of a higher opening and
the strong economic numbers combined with higher trade for palm oil futures
overnight and China soybean futures helped support. China or even the entire
export market does not seem to be a factor at present for old crop futures as
the focus of attention is on new crop sales out of South America. Brazil’s
2004/2005 soybean export registrations through April 15th totaled 15.74 million
tons as compared with 12.09 million tons last year by this date. Brazil exports
for the entire season are expected to reach 21.2 million tons. November soybeans
moved as high as 7.57 1/2 by late in the session, up 24 3/4 cents on the
session, as the trade still believes that strong corn prices and good weather
will steal acres from soybeans. The lack of fund selling and some commercial
buying helped to drive the market higher into mid-session. The official Brazil
crop estimate will be released on Wednesday which could impact trade tomorrow.
The US soybean crop is now 5% planted as compared with the 14-year average of 6%
for this time of the year. Near-term support for November soybeans comes in at
745 and 739 with 756 and 766 3/4 as resistance.

Technical Outlook

#SOYBEANS (JUL) 04/28/04 The gap upmove on the
day session chart is a bullish indicator for trend. The market has a bullish
tilt coming into today’s trade with the close above the 2nd swing resistance.
The next area of resistance is around 1011 2/4 and 1022 3/4, while 1st support
hits today at 977 2/4 and below there at 954 3/4. The market’s close on the
9-day moving average is neutral. The market now above the 40-day moving average
suggests the longer-term trend is up. Stochastics are at mid-range, but trending
higher which should reinforce a move higher if resistance levels are taken out.
The next upside objective is 1022 3/4.

MEAL (JUL): Stochastics are rising from over sold
levels which is bullish and should support higher prices. The near-term upside
target is at 313.3. First resistance comes in at 310.5, with support at 303.5.
The close above the 9-day moving average is a positive short-term indicator for
trend. There could be more upside follow through since the market closed above
the 2nd swing resistance. The cross over and close above the 40-day moving
average is an indication the longer-term trend is up.

BEAN OIL (JUL): A positive signal for trend
short-term was given on a close over the 9-bar moving average. Stochastics are
at mid-range, but trending higher which should reinforce a move higher if
resistance levels are taken out. The next upside objective is 34.99. 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. Daily swing
resistance is found at 34.58 and above there at 34.99. Support should be
encountered at 33.33 and 32.49. The market now above the 40-day moving average
suggests the longer-term trend is up.

 

WHEAT MARKET RECAP

4/27/2004

Solid gains in the other grain markets and
follow-through technical buying after Monday’s reversal-type action helped to
provide support early in the session and surging corn and soybean values late
added to the positive tone. Ideas that the market is oversold after a 55 1/2
cent break off of the April 5th highs was also seen as a positive force. For the
week ending April 25th, the winter wheat crop rated in good to excellent
condition came in at 48% which was up 2% on the week but still down from 55% as
the 14-year average. Poor to very poor readings were at 22%, down 1% from last
week but up from a 14-year average of 15%. Gulf basis was weaker this morning
after yesterday’s loss of Egypt business. French weather officials are warning
of drought conditions again for this season in the key northeast region if water
reserves do not improve soon. In addition, there was some talk that freezing
temperatures could damage some of the soft red crop if weekend Midwest
temperatures were cold enough. Taiwan is tendering for 42,550 tons of wheat and
Japan will tender for 120,000 tons late this week. July wheat support levels
come in at 386 and 383 with 396 1/4 and 402 3/4 as resistance.

Technical Outlook

#WHEAT (JUL) 4/28/2004: The market setup is
supportive for early gains with the close over the 1st swing resistance. Expect
near-term support around 384 2/4 and below there at 380 3/4, with resistance
levels at 391 3/4 and 395 1/4. A negative signal for trend short-term was given
on a close under the 9-bar moving average. Daily stochastics declining into
oversold territory suggest the selling may be drying up soon. The next downside
objective is 380 3/4.

 

LIVE CATTLE RECAP

4/27/2004

Cattle were slightly higher on the session after
the early strong gains eroded due to weakness in the pork market and a reversal
in the Feeder Cattle market. August, October and December contracts moved to a
new contract high. A solid cash tone in the market and the stiff futures
discount to the cash market helped support. Traders believe that feedlots are
current with marketings and demand has been stronger than expected. Beef prices
were mostly higher at mid-session which helped support. Cash markets in the
southern plains showed bids at $80-$82 with offers at $87-$88 after trading near
$85 last week.

Technical Outlook

#CATTLE (JUN) 4/28/2004: A bullish signal was
given with an upside crossover of the daily stochastics. The next upside
objective is 78.92. The market has a slightly positive tilt with the close over
the swing pivot. Support should be encountered at 77.32 and below there at
76.92. Market resistance is at 78.32 and then again at 78.92. A negative
indicator was given with the downside crossover of the 9 & 18 bar moving
average.

 

LEAN HOGS RECAP

4/27/2004

After pushing higher, and to the highest level
since April 16th for June hogs early in the session, futures collapsed to close
sharply lower on the day. The 225 point, high-volume range was outside of the
previous two-day range and the sharply lower close leaves the market vulnerable
to technical selling (long liquidation) ahead. Fund selling into the mid-session
triggered sell-stops and drove the market to limit-down for a short period
before a recovery. Fears of an end to the strong demand period just ahead and
talk that production is running a little higher than expected (pork production
up 4.7% from last year last week) added to the bearish tone. The CME 2-day Lean
Index for the period ending April 23rd was up 20 cents to $68.08 as compared
with 65.32 one week previous. Cash hogs were mostly higher with some locations
up $1.00.

Technical Outlook

#HOGS (JUN) 4/28/2004: The defensive setup, with
the close under the 2nd swing support, could cause some early weakness.
Resistance levels comes in at 72.40 and 73.80 today, while support is around
70.15 and then 69.30. The outside day down gives the market a bearish tilt. The
daily closing price reversal down is a negative indicator for prices. The close
below the 9-day moving average is a negative short-term indicator for trend. The
close below the 40-day moving average is an indication the longer-term trend is
down. A crossover down in the daily stochastics is a bearish signal. The next
downside target is now at 69.30.

 

COCOA MARKET RECAP

4/27/2004

Cocoa closed lower today in quiet trade after
yesterday gap higher and short covering rally. July cocoa traded inside
yesterday’s range, eventually closing 18 lower at 1378 after never having traded
higher on the day. May cocoa also closed 18 lower at 1378 in a narrow range,
below and into the gap it left on yesterday. The fund short covering that
dominated trade action on Monday was apparently absent today and some modest
profit taking was noted. July cocoa is still respecting the gap area that it
left on Monday’s open at l362 to 1373.

Technical Outlook

COCOA (JUL) 04/28/04 The close below the 1st
swing support could weigh on the market. Cocoa should run into resistance at
1387 and above there at 1399 with support at 1369 and 1363. Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The next
upside target is 1399.00.

 

COFFEE MARKET RECAP

4/27/2004

July Coffee closed 105 higher on the session and
near the highs of a 230 point range. The market held support at last week’s
reversal-day lows and the market experienced a surge in short-covering. London
closed lower for the second session in a row to give back some of last weeks
gains but the pull-back has not tested last weeks lows. In New York, the July
contract matched last weeks lows at 69.30 before the surge higher. The upward
revision of the Brazil government crop estimate to 38.3 million bags from 35.8
million bags was seen as a bearish factor in London but New York traders saw the
estimate as positive and above expectations of 40-45 million bags. Some violence
and political instability in Vietnam may have added to the positive tone.

Technical Outlook

COFFEE (JUL) 4/28/04 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 has a bullish tilt coming into today’s trade
with the close above the 2nd swing resistance. Daily stochastics are showing
positive momentum from oversold levels which should reinforce a move higher if
near-term resistance is taken out. The near-term upside objective is at 73.45.
The Coffee contract should run into resistance at 72.80 and above there at 73.45
with support at 70.4 and 68.65. The market’s short-term trend is positive on a
close above the 9-day moving average.

 

SUGAR MARKET RECAP

4/27/2004

July sugar closed sharply higher on the session
supported by active trade house and fund buying. Ideas that Asia will be a
significant deficit region for the second half of the year helped to support the
market. The lower crop in Thailand combined with suspected strong demand from
Indonesia and China helped support. Egypt bought 100,000 tons of raw sugar for
June/July delivery which helped perk-up interest in the cash market. Trade
buying in London triggered a late surge and a new contract high for the August
futures which sent a clear message to New York traders that “if the processed
market can trade new highs, the raw market should not be far behind”. As of
April 26th, there were still 17,183 contracts open in the May futures. Total
open interest was down 3068 to 271,753 contracts.

Technical Outlook

#SUGAR (JUL) 4/28/2004: Follow through buying
looks likely if the market can hold yesterday’s gap on the day session chart.
There could be more upside follow through since the market closed above the 2nd
swing resistance. Swing resistance comes in at 7.25, with support found at 6.87.
The close above the 9-day moving average is a positive short-term indicator for
trend. The crossover up in the daily stochastics is a bullish signal. The
near-term upside target is at 7.25.

 

COTTON MARKET RECAP

4/27/2004

The cotton market tested last weeks lows early in
the session on follow-through selling from the weak action on Monday but ending
up higher on the session. The market found support from a surge in commodity
prices across a wide spectrum of markets and from solid economic numbers which
suggests strong world and US demand for cotton into the 2004/2005 season. The
WTO ruled against the US and for Brazil in the Brazil complaint that the US
cotton subsidies distort world prices and should be illegal. This was a key
longer-term ruling which could spread to other markets. In the long-run, the
ruling could mean less cotton produced in the US. The Cotlook A Index was down
60 cents to 70.00.

Technical Outlook

#COTTON (JUL) 4/28/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. The market
has a slightly positive tilt with the close over the swing pivot. Next
resistance area comes in at 63.45 and then again at 63.98, while support is
targeted at 61.82 and 60.72. Stochastics are at mid-range, but trending higher
which should reinforce a move higher if resistance levels are taken out. The
next upside objective is 63.98. The daily closing price reversal up is a
positive indicator that could support higher prices.