For Bonds To Take Out 112, This Must Happen
BOND MARKET RECAP
3/31/2005
March Bonds finished up 0-22 at 111-12, 0-02 off
the high and 0-23 up from the low.
March 10 Yr Treasury Notes finished up 0-165 at
109-085, 0-015 off the high and 0-160 up from the low.
Although the economic reports Thursday were
mixed, the bond market interpreted them as positive with focus on the core
personal consumption expenditure price index (watched closely by Greenspan)
showing an annual rate of 1.6% for March and within the Fed’s comfort zone. The
other economic data was mixed with the weekly initial claims up 20,000 while the
Chicago Purchasing Managers Employment Index showed the highest index level
since 1983, which clouds the outlook for Friday’s payroll number. Factory orders
came in below expectations. With June bonds already showing solid gains so far
this week, the payroll data may have to show less than a +180,000 gain to take
out resistance near 112.
Technical Outlook
BONDS (JUN) 04/01/2005: Momentum studies are
trending higher from mid-range, which should support 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’s close
above the 2nd swing resistance number is a bullish indication. The near-term
upside target is at 112-04. The next area of resistance is around 111-29 and
112-04, while 1st support hits today at 111-02 and below there at 110-13.
TNOTES (JUN) 04/01/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
major trend could be turning up with the close back above the 18-day moving
average. 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. The next upside objective is 109-225. The next area of resistance is
around 109-180 and 109-225, while 1st support hits today at 109-010 and below
there at 108-200.
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STOCK INDICES RECAP
3/31/2005
March S&P finished down 1.5 at 1183.9, 4 off the
high and 1.6 up from the low.
March S&P E-Mini closed down 2 at 1183.5. This
was 1.5 up from the low and 4.75 off the high.
March Dow closed down 38 at 10520. This was 15 up
from the low and 50 off the high.
June S&P saw a choppy trade Thursday as mixed
economic data left the market hesitant to move in either direction ahead of
Friday’s employment report. The median estimate is for a payroll gain of
220,000. A surge in oil prices and a brewing scandal at AIG insurance kept the
upside limited. However, a muted reading in the core personal consumption
expenditure price index (watched closely by Greenspan) showing an annual rate of
1.6% for March was within the Fed’s comfort zone and suggests the Fed will not
have to become more aggressive in raising rates. The Midwest Manufacturing Index
and Chicago Purchasing Managers index were both stronger than expected.
Technical Outlook
S&P 500 (JUN) 04/01/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The major trend has turned down with the cross over back below
the 18-day moving average. The downside closing price reversal on the daily
chart is somewhat negative. The market has a slightly positive tilt with the
close over the swing pivot. The next upside target is 1189.90. The next area of
resistance is around 1186.30 and 1189.90, while 1st support hits today at
1180.70 and below there at 1178.70.
SP EMINI (JUN) 04/01/2005: Rising from oversold
levels, daily momentum studies would support higher prices, especially on a
close above resistance. 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 upside
target is 1190.56. The next area of resistance is around 1186.62 and 1190.56,
while 1st support hits today at 1180.38 and below there at 1178.07.
NASDAQ (JUN) 04/01/2005: 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 market tilt is slightly negative
with the close under the pivot. The near-term upside target is at 1505.25. The
next area of resistance is around 1498.50 and 1505.25, while 1st support hits
today at 1485.50 and below there at 1479.25.
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CURRENCY MARKET RECAP
3/31/2005
March US Dollar finished down 20 at 8405, 33 off
the high and 33 up from the low.
March Euro finished up 0.23 at 129.82, 0.61 off
the high and 0.12 up from the low.
March Euro Dollar closed up 0.025 at 96.485. This
was 0.025 up from the low and 0.01 off the high.
March Canadian Dollar closed up 0.45 at 82.69.
This was 0.2 up from the low and 0.13 off the high.
March British Pound finished up 0.95 at 188.26,
0.27 off the high and 0.68 up from the low.
March Swiss closed up 0.1 at 83.95. This was 0.02
up from the low and 0.52 off the high.
March Japanese Yen closed up 0.28 at 93.83. This
was 0.06 up from the low and 0.5 off the high.
The Dollar came under pressure Thursday after the
core personal consumption expenditure price index (watched closely by Greenspan)
showed an annual rate of 1.6% for March which was within the Fed’s comfort zone.
Currency trader surmised that the Fed would not have to become more aggressive
in tightening rates which took some of the appeal away from the Dollar. The
Midwest Manufacturing Index and Chicago Purchasing Managers index were both
stronger than expected. The median estimate for Friday’s payroll number is for a
220,000 gain for March. Given the sharp price gains in the June Dollar Index
since mid-March, the currency may need to see a bullish surprise to avoid more
of a profit taking break.
Technical Outlook
YEN (JUN) 04/01/2005: 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. With the
close over the 1st swing resistance number, the market is in a moderately
positive position. The next downside objective is now at 93.38. The 9-day RSI
under 30 indicates the market is approaching oversold levels. The next area of
resistance is around 94.10 and 94.50, while 1st support hits today at 93.55 and
below there at 93.38.
EURO (JUN) 04/01/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. It is a mildly bullish indicator that the market closed over the
pivot swing number. The next downside objective is now at 129.22. The next area
of resistance is around 130.18 and 130.67, while 1st support hits today at
129.46 and below there at 129.22.
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PRECIOUS METALS RECAP
3/31/2005
April Gold closed up 1.8 at 428.7. This was 1.5
up from the low and 0.3 off the high.
March Silver finished up 0.033 at 7.18, 0.045 off
the high and 0.025 up from the low.
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A weaker Dollar and surging energy prices enabled
June gold to close back over $430 as funds continued to add to long positions.
The gold market had little reaction to news the European Central Bank sold 47
tonnes of gold as the bank does not plan any future sales. The surge in energy
prices also seemed to offset remarks by the IMF Managing Director that IMF gold
stocks could be sold to relieve third world debt, but US officials did not think
this was necessary. Near-term direction for gold may be influenced by Friday’s
payroll data, with the market looking for a 220,000 payroll gain, and its impact
on the Dollar.
Technical Outlook
SILVER (MAY) 04/01/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The major trend has turned down with the cross over back below
the 18-day moving average. The close over the pivot swing is a somewhat positive
setup. The next upside objective is 725.5. The next area of resistance is around
721.5 and 725.5, while 1st support hits today at 714.5 and below there at 711.5.
GOLD (APR) 04/01/2005: 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 setup
is supportive for early gains with the close over the 1st swing resistance. The
next downside objective is 426.6. The next area of resistance is around 429.6
and 430.2, while 1st support hits today at 427.8 and below there at 426.6.
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COPPER MARKET RECAP
3/31/2005
March Copper closed up 1.05 at 150.25. This was
1.15 up from the low and 1.35 off the high.
May copper rallied back towards the contract
highs set earlier in March and closed strong, but the market gave back much of
the earlier gains by the close. The market started the day in a strong posture
after the London market traded to all time highs on strong fund buying and a
weaker dollar. The dollar had weakened after some key inflation readings came
out close to expectations, but trading quieted down in advance of the payrolls
report Friday morning.
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ENERGY MARKET RECAP
3/31/2005
April Crude Oil closed up 1.41 at 55.40. This was
0.50 up from the low and 0.70 off the high.
April Heating Oil closed up 5.19 at 161.61. This
was 2.61 up from the low and 1.89 off the high.
April Unleaded Gas finished up 4.66 at 166.31,
1.64 off the high and 2.51 up from the low.
April Natural Gas finished up 0.19 at 7.65, 0.09
off the high and 0.10 up from the low.
April Propane closed up 0.02 at 0.87. This was
equal to the low and equal to the high.
The energy complex surged higher Thursday as a
report by Goldman Sachs warned that oil prices could rise to $105/barrel. The
Goldman Sachs report predicted that the US is embarking on a “super-spike”
period in oil prices where oil prices will stay high enough over a multiyear
period to actually reduce energy consumption. The steady decline in gasoline
stocks over the last 4 weeks continues to leave traders hyper sensitive to
supply issues and has given the Goldman Sachs report more impact. While gasoline
stocks according to the EIA are 12.6 million barrels above last year and are
also above the 13 year average, energy traders remain convinced that demand will
remain strong throughout the year to whittle away at supplies. Reuters reports
that Shell Oil Company replaced less than half the oil it pumped in 2004 with
new finds and that its proven reserves at the end of last year equaled to less
than 9 years production at an average 2004 rate.
Technical Outlook
CRUDE OIL (MAY) 04/01/2005: The downside
crossover (9 below 18) of the moving averages suggests a developing short-term
downtrend. Stochastics trending lower at midrange will tend to reinforce a move
lower especially if support levels are taken out. The cross over and close above
the 18-day moving average indicates the longer-term trend has turned up. The gap
up on the day session chart gave a bullish indicator and more follow through
could be seen this session. The market’s close above the 2nd swing resistance
number is a bullish indication. The next downside objective is 54.25. The next
area of resistance is around 56.00 and 56.65, while 1st support hits today at
54.80 and below there at 54.25.
UNLEADED (MAY) 04/01/2005: A bullish signal was
given with an upside crossover of the daily stochastics. Rising stochastics at
overbought levels warrant some caution for bulls. The market now above the
18-day moving average suggests the longer-term trend has turned up. 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. The near-term upside objective is at 170.24. The
9-day RSI over 70 indicates the market is approaching overbought levels. The
next area of resistance is around 168.38 and 170.24, while 1st support hits
today at 164.24 and below there at 161.95.
HEATING OIL (MAY) 04/01/2005: A bullish signal
was given with an upside crossover of the daily stochastics. Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The major trend could be turning up with the close back above the
18-day moving average. The gap upmove on the day session chart is a bullish
indicator for trend. The market setup is supportive for early gains with the
close over the 1st swing resistance. The next upside objective is 165.93. The
market is becoming somewhat overbought now that the RSI is over 70. The next
area of resistance is around 163.86 and 165.93, while 1st support hits today at
159.36 and below there at 156.93.
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CORN MARKET RECAP
3/31/2005
May Corn finished up 1/2 at 213, 5 1/4 off
the high and 1 1/2 up from the low. December Corn closed up 1/2 at 234 3/4. This
was 1/4 up from the low and 5 1/2 off the high.
The USDA news combined with surging soybean
prices appeared to be enough to attract new fund buying to corn and to all of
the grain markets for most of the session as outside market influences of
inflation and a cheap dollar combined with the increased interest in owning
commodities by world money managers seemed to be a positive force. The weak
close, however, could attract some technical selling early Friday. The USDA
pegged planted acreage at 81.4 million acres as compared with the average trade
estimate at 82.4 million acres (range 81.7-83.4) and last years 80.93 million.
For the grain stocks report, the USDA pegged March 1st corn stocks at 6.754
billion bushels as compared with the average trade estimate of 6.72 billion
bushels (range 6.69-6.75) and 5.27 billion bushels last year. Planted acreage is
about 1 million acres below expectations which is approximately 143 million
bushels and this news more than offsets the 34 million extra bushels of corn
found in the grain stocks report. Weekly export sales, also released before the
opening, came in at 1.159 million tons as compared with trade expectations at
650,000-850,000 tons. Cumulative sales have reached 71% of the USDA forecast for
the season as compared with 69.2% as the 5-year average for this time of the
year. December corn resistance comes in at 238 with 229 1/2 as next support if
last weeks lows can not hold. May corn support comes in at 210 3/4 with 214 1/4
as next resistance.
Technical Outlook
CORN (MAY) 04/01/2005: 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.
With the close higher than the pivot swing number, the market is in a slightly
bullish posture. The next downside objective is now at 207 1/4. The next area of
resistance is around 216 1/4 and 220 1/2, while 1st support hits today at 209
3/4 and below there at 207 1/4.
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SOY COMPLEX RECAP
3/31/2005
May Soybeans finished down 13 1/2 at 627 1/2, 33
1/2 off the high and 4 1/2 up from the low. November Soybeans closed down 5 3/4
at 605 1/2. This was 1 1/2 up from the low and 24 1/2 off the high.
May Soymeal closed down 5 at 187.0. This was 2.0
up from the low and 11.5 off the high.
May Soybean Oil finished down 0.58 at 22.9, 1.15
off the high and 0.05 up from the low.
The USDA news was not enough to cause funds to
back away from the buying trend of the past few days but the buying slowed late
and heavy long liquidation selling helped to pressure the market to a weak
close. Pit traders indicated that when funds turned inactive late that small
orders to sell managed to drive the price sharply lower. The news was considered
bullish enough to keep funds as active buyers and as resistance levels were
violated, more money seems to be flowing into the grain markets. However, the
poor close could attract some technical selling on Friday. Planted acreage was
higher than expected but the stocks report showed that demand for the past
quarter was much stronger than expected with demand running 44 million bushels
higher than expected. The USDA pegged planted acreage at 73.9 million acres as
compared with the average trade estimate at 73.37 million acres (range
72.1-74.5) and last years 75.2 million. For the grain stocks report, the USDA
pegged March 1st soybean stocks at 1.381 billion bushels as compared with the
average trade estimate of 1.425 billion bushels (range 1.405-1.454) and 906
million bushels last year. Weekly export sales, also released before the
opening, came in at 323,400 tons as compared with trade expectations at
400,000-600,000 tons. Cumulative sales have reached 95.1% of the USDA forecast
for the season as compared with 90.1% as the 5-year average for this time of the
year. Meal sales came in at 195,100 tons as compared with trade expectations at
75,000-125,000 tons. Cumulative sales have reached 82.1% of the USDA forecast
for the season as compared with 74% as the 5-year average for this time of the
year. Oil sales were 6900 tons from expectations at 0 to 5,000 tons. Resistance
for May soybeans comes in at 637 1/2 with 617 1/4 as support.
Technical Outlook
BEANS (MAY) 04/01/2005: 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 daily closing
price reversal down is a negative indicator for prices. The market’s close below
the 1st swing support number suggests a moderately negative setup for today. The
next downside objective is 596 3/4. The next area of resistance is around 646
1/2 and 672 3/4, while 1st support hits today at 608 1/2 and below there at 596
3/4.
MEAL (MAY) 04/01/2005: Momentum studies are
declining, but have fallen to oversold levels. The close below the 18-day moving
average is an indication the longer-term trend has turned down. The outside day
down and close below the previous day’s low is a negative signal. The market’s
close below the 1st swing support number suggests a moderately negative setup
for today. The next downside target is 175.9. The next area of resistance is
around 193.7 and 202.8, while 1st support hits today at 180.3 and below there at
175.9.
BEANOIL (MAY) 04/01/2005: A crossover down in the
daily stochastics is a bearish signal. Negative momentum studies in the neutral
zone will tend to reinforce lower price action. The market back below the 18-day
moving average suggests the longer-term trend could be turning down. The market
could take on a defensive posture with the daily closing price reversal down.
The close below the 1st swing support could weigh on the market. The next
downside target is 21.98. The next area of resistance is around 23.50 and 24.37,
while 1st support hits today at 22.30 and below there at 21.98.
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WHEAT MARKET RECAP
3/31/2005
May Wheat finished down 2 1/2 at 331, 10 1/2 off the high and
1 up from the low. July Wheat closed down 1 1/2 at 341. This was 1 up from the
low and 8 1/2 off the high.
Fund buying across the grain floor helped support
solid gains early in the session but when the soybean market turned lower; the
buying halted and light speculative selling managed to push May wheat to the
lowest close since February 24th. The USDA pegged spring wheat planted acreage
at 14.37 million acres as compared with the average trade estimate at 13.7
million acres (range 13.4-14.4) and 13.76 million last year. The higher spring
wheat number helped pressure Minneapolis wheat relative to other wheat markets.
All wheat planted acreage came in at 58.59 million acres as compared with the
average trade estimate of 57.9 million and last years plantings at 59.67 million
acres. This is the lowest planted acreage since 1972. The jump in spring wheat
plantings is a bearish development. For the grain stocks report, the USDA pegged
March 1st wheat stocks at 981 million bushels as compared with the average trade
estimate of 993 million bushels (range 973-1.04) and 1.021 billion bushels last
year. Weekly export sales, also released before the opening, came in at 415,400
tons as compared with trade expectations at 375,000-575,000 tons. Cumulative
sales have reached 90.4% of the USDA forecast for the season as compared with
85.9% as the 5-year average for this time of the year. The International Grain
Council pegged 2005/2006 world wheat production at 602 million tonnes as
compared with 623 million tonnes for 04/05. Consumption for 04/05 is pegged at
610 million tonnes. World trade is expected to increase to 108 million tonnes
for the 2005/2006 season from 103 this year and 102 last year. With Argentina
wheat prices up nearly 35% since the start of the year, Brazil millers seem to
be caught short-bought which could help provide some commercial support to
wheat. May wheat resistance is at 336 with 323 1/4 as next support.
Technical Outlook
WHEAT (MAY) 04/01/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. A negative signal was given by the outside day down. The
market’s close below the pivot swing number is a mildly negative setup. The next
downside objective is now at 322. The next area of resistance is around 336 3/4
and 344 3/4, while 1st support hits today at 325 1/4 and below there at 322.
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LIVE CATTLE RECAP
3/31/2005
April Live Cattle finished up 0.07 at 89.82, 0.27
off the high and 0.42 up from the low.
May Feeder Cattle closed up 0.10 at 104.95. This
was 0.15 up from the low and 0.80 off the high.
June cattle inched higher in choppy, two-sided
trade with the strength in the cash market failing to provide much support.
After trading at $93 in Kansas yesterday, packers were bidding $90 in the Texas
panhandle today with offers at $94 but there is still no active trade. Traders
seem convinced that feedlot supplies are going to move up enough in the next 8
weeks to see a sharp break in the cash market. Seasonally, demand has a tendency
to increase at this time of the year as the barbeque season begins to slowly
build up steam in the southern US. Boxed-beef cut-out values at mid-session were
up $.49 to $151.53 as compared with $149.95 last week. Slaughter came in at
120,000 head as compared with trade expectations at 114,000-118,000 head which
suggests that packer demand is higher than expected.
Technical Outlook
CATTLE (APR) 04/01/2005: 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 tilt is
slightly negative with the close under the pivot. The next upside objective is
90.470. The next area of resistance is around 90.150 and 90.470, while 1st
support hits today at 89.470 and below there at 89.100.
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LEAN HOGS RECAP
3/31/2005
April Lean Hogs finished unchanged at 68.70, 0.10
off the high and 0.67 up from the low.
May Pork Bellies closed up 0.05 at 96.25. This
was 0.55 up from the low and 0.70 off the high.
June hogs pushed slightly higher in choppy trade
as improving packer demand to move hogs quickly through the pipeline is clashing
with trader concerns that pork production may be burdensome over the near-term.
Cash hogs were mostly steady to $.50 higher in the country as packers are trying
to put together a hefty slaughter for Saturday. Weekly average weights were
higher than expected yesterday and up nearly 5 pounds from the 5-year average
which suggests a few hogs might have been backed-up in the country before the
Hog report. Slaughter came in at 399,000 head as compared with trade
expectations at 396,000-400,000 head. The 2-day lean index for the period ending
March 29th came in at 67.02, down.31 on the session and down from 68.39 one week
previous.
Technical Outlook
HOGS (APR) 04/01/2005: 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.
The market has a slightly positive tilt with the close over the swing pivot. The
next downside target is now at 67.800. Some caution in pressing the downside is
warranted with the RSI under 30. The next area of resistance is around 69.070
and 69.320, while 1st support hits today at 68.320 and below there at 67.800.
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COCOA MARKET RECAP
3/31/2005
May Cocoa finished up 34 at 1613, 13 off the high
and 11 up from the low.
May cocoa gapped higher and closed back above the
$1,600 level as fund traders became active buyers again. A weaker Dollar and
stronger price action in them London market were supportive factors. However,
tensions in the Ivory Coast could heat up again if the April 3rd meeting between
government leaders and rebels can not resurrect their peace plan. Dow Jones is
reporting that Ivory Coast government soldiers have been aggressively recruiting
soldiers from neighboring Liberia over the past month while UN peacekeepers have
reported a government military buildup in the western zone they patrol. This
action suggests the government may be preparing for more violence if Sunday’s
talks are a failure.
Technical Outlook
COCOA (MAY) 04/01/2005: Daily stochastics are
trending lower but have declined into oversold territory. The close under the
18-day moving average indicates the longer-term trend could be turning down. The
gap up on the day session chart gave a bullish indicator and more follow through
could be seen this session. The market has a bullish tilt coming into today’s
trade with the close above the 2nd swing resistance. The next downside objective
is now at 1590. The next area of resistance is around 1625 and 1637, while 1st
support hits today at 1601 and below there at 1590.
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COFFEE MARKET RECAP
3/31/2005
May Coffee closed up 1.40 at 126.40. This was
1.30 up from the low and 1.35 off the high.
July coffee closed 145 higher on the session as
trade house and fund buying helped support. Strength in other commodity markets
and tightness in cash markets helped support. End of month long liquidation
selling helped pull the market off of the highs. London coffee also closed firm
on a recovery from last week’s washout. Brazil announced that 100,000 bags of
2002/2003 season coffee will be auctioned for sale on Friday which might help
ease the cash tightness.
Technical Outlook
COFFEE (MAY) 04/01/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
close under the 18-day moving average indicates the longer-term trend could be
turning down. The close over the pivot swing is a somewhat positive setup. The
next downside objective is now at 123.80. The next area of resistance is around
127.70 and 129.05, while 1st support hits today at 125.10 and below there at
123.80.
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SUGAR MARKET RECAP
3/31/2005
May Sugar closed up 0.15 at 8.70. This was 0.05
up from the low and 0.02 off the high.
May sugar closed 15 points higher on the session
finding support from trade house and renewed speculative buying. Ideas that the
increase in interest from the cash market will translate into higher cash prices
helped to support. In addition, ideas that the market is technically overbought
after a steady flow of long liquidation selling over the past several weeks
helped to support the market. The EU sold 75,500 tonnes of sugar at their weekly
tender after expectations for 30,000-60,000 tonnes. Talk of a smaller crop for
next year in Australia added to the positive tone.
Technical Outlook
SUGAR (MAY) 04/01/2005: Daily stochastics are
trending lower but have declined into oversold territory. The close under the
18-day moving average indicates the longer-term trend could be turning down.
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. The next downside objective is 8.63. The
next area of resistance is around 8.73 and 8.76, while 1st support hits today at
8.67 and below there at 8.63.
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COTTON MARKET RECAP
3/31/2005
May Cotton finished down 0.35 at 53.03, 1.07 off
the high and 0.38 up from the low.
December cotton ended higher on the session
finding support from the USDA planted acreage report but May cotton was lower
from continued technical follow-through selling after disappointing action for
the bulls this week. Weekly export sales, also released before the opening, came
in at 164,900 bales as compared with trade expectations at 150,000-250,000
bales. Cumulative sales have reached just 88.6% of the USDA forecast for the
season as compared with 96% as the 5-year average for this time of the year. The
slow sales were offset by export shipments at 377,400 bales which was a
marketing year high. The USDA pegged planted acreage at 13.815 million acres as
compared with the average trade estimate near 14 million acres and 13.76 million
last year.
Technical Outlook
COTTON (MAY) 04/01/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. 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 upside target is
54.65. The next area of resistance is around 53.75 and 54.65, while 1st support
hits today at 52.31 and below there at 51.76.