Copper Demand Remains High–Here’s Why

After the early weakness, the market experienced
a steady flow of speculative buying which was considered follow-through buying
from Monday’s positive technical action and helped establish the early highs.
The market managed to close mixed in quiet, two-sided trade. Positioning ahead
of the USDA stocks and planted acreage reports has kept the trade slow and on
both sides of yesterdays close. Traders are looking for a jump of near 1.5
million acres from last year and for stocks for March 1st to come in near 6.72
billion bushels as compared with 5.271 billion last year. Lower planted acreage
in winter wheat and fears of dealing with Asian rust are factors which might
trigger increased corn plantings. The outlook for wet weather across the central
and eastern cornbelt for late this week may help support the December contract
with traders aware that early planted corn seems to yield better than later
planted corn with all other factors equal. Support for May corn comes in at 212
1/4 with 217 1/2 as resistance.

Technical Outlook

CORN (MAY) 03/30/2005: Momentum studies are
declining, but have fallen to oversold levels. The major trend has turned down
with the cross over back below the 18-day moving average. The market has a
slightly positive tilt with the close over the swing pivot. The next downside
target is now at 210. The next area of resistance is around 214 1/2 and 216,
while 1st support hits today at 211 1/2 and below there at 210.

 

SOY COMPLEX RECAP

3/29/2005

May Soybeans finished down 1 3/4 at 624, 4 1/2
off the high and 2 1/2 up from the low. November Soybeans closed down 3 1/2 at
597 1/2. This was 1/2 up from the low and 3 1/2 off the high.

May Soymeal closed up 0.5 at 186.6. This was 1.1
up from the low and 0.9 off the high.

May Soybean Oil finished up 0.08 at 22.87, 0.18
off the high and 0.07 up from the low.

The market pushed lower after the higher opening
but managed to hold support as the speculative long liquidation trend of last
week seems to have dwindled to just light spec selling ahead of key reports for
Thursday morning. Firm demand continues to provide support as US soybeans are
still competitive against Brazil. In fact, Taiwan bought 60,000 tonnes of
soybeans from the US for shipment in May from the Pacific Northwest. Demand in
general is still firm in spite of the sharp rally off of the February lows.
Positioning ahead of the key USDA reports on Thursday morning for planted
acreage and for March 1st stocks has kept the trade choppy. The weather is less
of a factor for Brazil but generally dry conditions this week should help boost
harvest. Traders are looking for planted acreage to drop by 1.8 million acres
from last year. Weakness in the dollar and a firm tone for cash basis in the
country helped provide underlying support. Short-term support for May soybeans
comes in at 617 1/4 with 643 1/2 as first good overhead resistance.

Technical Outlook

BEANS (MAY) 03/30/2005: The moving average
crossover down (9 below 18) indicates a possible developing short-term
downtrend. Daily stochastics are trending lower but have declined into oversold
territory. The close below the 18-day moving average is an indication the
longer-term trend has turned down. It is a slightly negative indicator that the
close was lower than the pivot swing number. The next downside objective is now
at 617 1/2. The next area of resistance is around 627 1/2 and 631 1/2, while 1st
support hits today at 620 1/2 and below there at 617 1/2.

MEAL (MAY) 03/30/2005: A negative indicator was
given with the downside crossover of the 9 & 18 bar moving average. 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’s close below the pivot swing number is a mildly negative setup. The next
downside objective is 184.6. The next area of resistance is around 187.6 and
188.5, while 1st support hits today at 185.6 and below there at 184.6.

BEANOIL (MAY) 03/30/2005: Momentum studies are
declining, but have fallen to oversold levels. 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 lower than the pivot swing
number. The next downside objective is now at 22.65. The next area of resistance
is around 22.99 and 23.14, while 1st support hits today at 22.75 and below there
at 22.65.

 

WHEAT MARKET RECAP

3/29/2005

May Wheat finished down 1 1/2 at 334 1/2, 6 1/2 off the high
and 1/2 up from the low. July Wheat closed down 2 at 343 1/2. This was 1/2 up
from the low and 5 1/2 off the high.

Fund traders were noted as light buyers and the
active speculative long liquidation selling of last week appears to have
subsided ahead of key USDA reports for release Thursday morning. Crop conditions
are favorable for the start of the key growing season for the winter wheat crop.
With traders looking for winter wheat planted acreage to be down 1.75 million
acres from last year and spring wheat planted acreage near unchanged from last
year, traders are less bearish regarding the good crop conditions to start the
season. In addition, traders are looking for March 1st stocks near 993 million
bushels as compared with 1.021 billion bushels last year. In the weekly
state-by-state reports, Kansas crops rated in good to excellent condition
improved to 72% this week from 67% last week and 37% last year. Oklahoma crops
are rated 72% in good to excellent condition from 74% last week and 58% last
year. Nebraska winter wheat crops are rated 59% in good to excellent condition.
A dry weather trend seems to be developing for the western sections of the
plains but with conditions favorable at present, it will take several weeks of
dryness to raise concerns. May wheat support comes in at 332 1/2 with resistance
at 341.

Technical Outlook

WHEAT (MAY) 03/30/2005: 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 daily closing price reversal down puts the market on the
defensive. It is a slightly negative indicator that the close was under the
swing pivot. The next downside target is now at 329. The next area of resistance
is around 338 and 343, while 1st support hits today at 331 and below there at
329.

 

LIVE CATTLE RECAP

3/29/2005

April Live Cattle finished up 0.30 at 90.10, 0.35
off the high and 0.10 up from the low.

May Feeder Cattle closed up 0.57 at 105.50. This
was 0.25 up from the low and 0.30 off the high.

June cattle opened moderately higher and closed
near the lows but managed to end with a 5 point gain. The close below the
opening and near the low end of the trading range might attract some technical
selling on Wednesday. After a 245 point jump off of last weeks lows, the market
seems a bit overbought. Boxed-beef cut-out values at mid-session were up $1.11
to $150.39 as compared with $153.30 last week. Slaughter came in at 112,000 head
as compared with 118,000 head last week and 127,000 head last year. The August
cattle hit a new contract high before closing lower on the session.

Technical Outlook

CATTLE (APR) 03/30/2005: The crossover up in the
daily stochastics is a bullish signal. Momentum studies are rising from
mid-range, which could accelerate a move higher if resistance levels are
penetrated. The major trend could be turning up with the close back above the
18-day moving average. If yesterday’s gap higher on the day session chart holds,
additional buying could develop this session. The close over the pivot swing is
a somewhat positive setup. The near-term upside objective is at 90.600. The next
area of resistance is around 90.300 and 90.600, while 1st support hits today at
89.870 and below there at 89.720.

 

LEAN HOGS RECAP

3/29/2005

April Lean Hogs finished down 0.37 at 69.27, 0.92
off the high and 0.92 up from the low.

May Pork Bellies closed up 2.50 at 97.65. This
was 2.30 up from the low and 0.35 off the high.

June hogs opened and closed sharply higher on the
session as cash markets were sharply higher on the session after expectations
for a $.50-$1.00 lower trade. Strength in cattle and a lack of competition from
Canadian beef helped to support. In addition, fund buying was noted which helped
push the trade into buy-stops above the market. Slaughter came in at 399,000
head as compared with 391,000 head last week and 381,000 head last year. The
2-day lean index for the period ending March 25th came in at 67.72, down.43 on
the session and down from 68.77 one week previous.

Technical Outlook

HOGS (APR) 03/30/2005: Daily stochastics are
trending lower but have declined into oversold territory. 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 objective is 67.450. The market is approaching oversold levels on an
RSI reading under 30. The next area of resistance is around 70.200 and 71.120,
while 1st support hits today at 68.370 and below there at 67.450.

 

COCOA MARKET RECAP

3/29/2005

May Cocoa finished up 11 at 1581, 12 off the high
and 5 up from the low.

The cocoa market gapped high but failed to really
extend the opening salvo. Apparently some physical or commercial buying stepped
into the fray as if to signal that recent low prices were a value to the trade.
It is also possible that the slightly weaker US Dollar was providing some short
covering incentive to the buyers during the action Tuesday. Given the reversal
we have to think that some weak handed small spec longs might become a little
more emboldened or at least willing to weather additional adversity.

Technical Outlook

COCOA (MAY) 03/30/2005: 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. A positive setup occurred with the close over the 1st swing
resistance. The next downside objective is 1566. The market is approaching
oversold levels on an RSI reading under 30. The next area of resistance is
around 1589 and 1599, while 1st support hits today at 1573 and below there at
1566.

 

COFFEE MARKET RECAP

3/29/2005

May Coffee closed down 0.30 at 122.05. This was
0.70 up from the low and 1.25 off the high.

The market closed slightly lower in quiet,
two-sided trade as the higher opening failed to attract new buying. London
recovered from last week’s poor action to close sharply higher. The 180 point
range for July coffee is considered tight as trade house buying emerged to
support the market on the break. Tightness is developing in Vietnam due to tight
producer selling and from Brazil has provided support. Brazil exports for 2005
are expected to come in near 23 million bags as compared with 26.4 million bags
last year.

Technical Outlook

COFFEE (MAY) 03/30/2005: The close below the
40-day moving average is an indication the longer-term trend has turned down.
The downside crossover of the 9 & 18 bar moving average is a negative signal.
Momentum studies are still bearish but are now at oversold levels and will tend
to support reversal action if it occurs. The market back below the 18-day moving
average suggests the longer-term trend could be turning down. The daily closing
price reversal down puts the market on the defensive. With the close higher than
the pivot swing number, the market is in a slightly bullish posture. The next
downside target is now at 120.25. The next area of resistance is around 123.00
and 124.10, while 1st support hits today at 121.10 and below there at 120.25.

 

SUGAR MARKET RECAP

3/29/2005

May Sugar closed down 0.09 at 8.52. This was
equal to the low and 0.16 off the high.

May sugar closed moderately lower on the session
but managed to hold 1 tick above the November lows. Long liquidation selling
continues to pressure the market in the absence of enough cash market news to
slow the selling trend. In addition, the selling seems to intensify as support
levels are violated as speculators were still holding a net long position of
near 122,000 contracts in Friday’s COT report. News that the EU had received
offers of 320,000 tonnes of white sugar for the season to date helped pressure
the London market late which added to the long liquidation selling in New York
with floor traders estimating that funds sold 12,000 contracts. While the Brazil
sugar harvest may not be quite as large as anticipated, the outlook for a record
crop has added to the bearish tone.

Technical Outlook

SUGAR (MAY) 03/30/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
major trend has turned down with the cross over back below the 18-day moving
average. The market setup is somewhat negative with the close under the 1st
swing support. The next downside target is 8.40. With a reading under 30, the
9-day RSI is approaching oversold levels. The next area of resistance is around
8.59 and 8.71, while 1st support hits today at 8.44 and below there at 8.40.

 

COTTON MARKET RECAP

3/29/2005

May Cotton finished down 0.38 at 53.58, 1.02 off
the high and 0.38 up from the low.

May cotton managed a new high by just 5 points
above Monday’s peak before encountering significant long liquidation selling and
a lower close. The reversal from the highest trade since September may trigger
follow-through technical selling ahead of the planted acreage report on Thursday
morning. Speculators have built a hefty net long position ahead of the report
with traders looking for cotton plantings near 13.5-14.2 million bales as
compared with 13.76 million bales last year. The CotLook A Index for the
2004/2005 North Europe index was up 220 points to 57.85 this morning with the B
Index up 275 points to 56.60.

Technical Outlook

COTTON (MAY) 03/30/2005: A negative indicator was
given with the downside crossover of the 9 & 18 bar moving average. Positive
momentum studies in the neutral zone will tend to reinforce higher price action.
The market now above the 18-day moving average suggests the longer-term trend
has turned up. The downside closing price reversal on the daily chart is
somewhat negative. It is a slightly negative indicator that the close was lower
than the pivot swing number. The next upside target is 55.14. The next area of
resistance is around 54.28 and 55.14, while 1st support hits today at 52.88 and
below there at 52.34.