Greenspan Generally Supportive To Stocks

The lower close after a successful test of the
highs might be considered bearish technical action. Funds were noted buyers on
the opening with weather in Brazil the driving force for the strong gains. A
lack of significant export news and talk of good yields in Argentina seemed to
be limiting factors for the corn market and another morning of hefty deliveries
also has traders second-guessing the short-term demand. The strong gains in
soybeans, however, have eased fears of a significant jump in planted acreage in
the US for the coming year as the sharp rally could give producers an incentive
to plant soybeans instead of switching some rotation acreage to corn on corn.
Deliveries were 1,097 contracts as compared with 1,392 lots posted yesterday.
Traders will monitor the Taiwan tender for 56,000-60,000 tons of corn from the
US or Argentina closely to see if the recent rally has made US corn less
competitive on the world market. For the weekly export sales report, released
before the opening, traders are looking for corn sales near 650,000-900,000 tons
as compared with 910,300 tons last week. Support for May corn comes in at 218
1/2 and 216 with resistance at 224 and 225.

Technical Outlook

CORN (MAY) 03/03/2005: A crossover down in the
daily stochastics is a bearish signal. Momentum studies are trending lower from
high levels which should accelerate a move lower on a break below the 1st swing
support. The market now above the 18-day moving average suggests the longer-term
trend has turned up. The daily closing price reversal down is a negative
indicator for prices. It is a slightly negative indicator that the close was
lower than the pivot swing number. The next downside objective is 213 3/4. The
next area of resistance is around 222 and 226, while 1st support hits today at
216 and below there at 213 3/4.

 

SOY COMPLEX RECAP

3/2/2005

May Soybeans finished up 14 at 627 1/4, 5 3/4 off
the high and 6 3/4 up from the low. November Soybeans closed up 9 3/4 at 624.
This was 4 1/2 up from the low and 3 1/2 off the high.

May Soymeal closed up 4.6 at 186.2. This was 3.2
up from the low and 0.3 off the high.

March Soybean Oil finished up 0.3 at 23, 0.32 off
the high and 0.18 up from the low.

A continued dry weather trend through next week
helped trigger renewed fund and speculative buying in soybeans and the products
with May soybeans moving to the highest level since September 3rd early in the
session. Inflationary concerns, index fund buying and weather have kept fund
buyers active in the past few weeks with May soybeans gaining $1.32/bushel in
the past 17 trading sessions. Funds were noted buyers of at least 4000 contracts
into the mid-session. Traders continue to lower production forecast due to
stressful conditions for the late developing crop. The Brazil Vegetable Oils
Industry Association cut their forecast for Brazil production to 58.3 million
tonnes as compared with 61.5 million tons last month. Private forecasts are
beginning to dip under 58 million tons as compared with the last USDA forecast
at 63 million tons. Deliveries against March soybeans were 378 contracts this
morning with 76 meal and 183 oil. Hefty deliveries could ease the support from
weather but until the forecast shows some rain, the sellers could remain timid.
Some forecasters are calling for increased chances of rain for next week.
Futures are extremely overbought basis traditional technical indicators. For the
weekly export sales report, released before the opening, traders are looking for
soybean sales near 300,000-450,000 tons, meal sales at 50,000-100,000 tons and
oil sales at 5,000-10,000 tons. Resistance for May soybeans comes in at 631 and
638 with support at 618 and 610 3/4.

Technical Outlook

BEANS (MAY) 03/03/2005: Momentum studies are
trending higher but have entered overbought levels. The cross over and close
above the 18-day moving average indicates the longer-term trend has turned up. A
positive setup occurred with the close over the 1st swing resistance. The next
upside objective is 639 1/2. With a reading over 70, the 9-day RSI is
approaching overbought levels. The next area of resistance is around 633 1/2 and
639 1/2, while 1st support hits today at 621 and below there at 614 1/2.

MEAL (MAY) 03/03/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The cross over and close above the 18-day moving average indicates
the longer-term trend has turned up. 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 near-term upside target is at 191.1.
The market is approaching overbought levels with an RSI over 70. The next area
of resistance is around 190.2 and 191.1, while 1st support hits today at 187.0
and below there at 184.7.

BEANOIL (MAY) 03/03/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The cross over and close above the 18-day moving average indicates
the longer-term trend has turned up. The close over the pivot swing is a
somewhat positive setup. The near-term upside objective is at 23.77. The 9-day
RSI over 70 indicates the market is approaching overbought levels. The next area
of resistance is around 23.41 and 23.77, while 1st support hits today at 22.81
and below there at 22.58.

 

WHEAT MARKET RECAP

3/2/2005

May Wheat finished up 2 1/4 at 340 1/2, 6 off the high and 1
3/4 up from the low. July Wheat closed up 2 3/4 at 347 1/4. This was 2 1/4 up
from the low and 4 3/4 off the high.

The early rally was fed by active fund buying but
buying slowed when May futures matched Monday’s highs. A weaker tone for cash
basis levels due to talk of increased producer selling helped pressure the
market off of the early highs but fund buying (noted at near 2000 contracts)
helped the market hold on to part of the day’s gains. South Korea is tendering
to buy 20,000 tons of US wheat and other export news is quiet. Deliveries were
light again today at 90 contracts vs. 73 contracts yesterday. Ahead of first
notice day, traders were looking for up to 1000 deliveries. Weather in Brazil
continues to support soybeans and in turn the wheat market but US weather looks
favorable for the central and southern plains with soil conditions near ideal
for this time of the year. For the weekly export sales report, released before
the opening, traders are looking for wheat sales near 300,000-450,000 tons as
compared with 562,800 tons last week. May wheat support comes in at 338 and 334
with 346 1/2 and then 355 as next resistance.

Technical Outlook

WHEAT (MAY) 03/03/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The market now above the 18-day moving average suggests the
longer-term trend has turned up. It is a mildly bullish indicator that the
market closed over the pivot swing number. The next upside objective is 349 1/4.
The market is approaching overbought levels with an RSI over 70. The next area
of resistance is around 344 1/4 and 349 1/4, while 1st support hits today at 336
3/4 and below there at 334.

 

LIVE CATTLE RECAP

3/2/2005

April Live Cattle finished up 0.30 at 86.80, 0.35
off the high and 1.45 up from the low.

March Feeder Cattle closed up 0.35 at 100.32.
This was 1.47 up from the low and 0.67 off the high.

Cattle tested last week’s lows before a surge
higher late in the day with April cattle closing 30 higher on the session and up
145 from the lows of the day. A Federal Judge ordered a temporary halt to the US
plans to open up trade with young Canadian cattle which was set for March 7th.
The border is to remain closed until the lawsuit by R-CALF USA can be considered
by the federal court. A lack of cash activity and disappointment over progress
to re-open trade with Japan helped pressure the market early. Boxed-beef cut-out
values at mid-session were up $1.09 to $141.91 as compared with $138.76 last
week. Slaughter came in at 118,000 head from trade expectations for
116,000-120,000 head.

Technical Outlook

CATTLE (APR) 03/03/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The market back below the 18-day moving average suggests
the longer-term trend could be turning down. The upside closing price reversal
on the daily chart is somewhat bullish. The market has a slightly positive tilt
with the close over the swing pivot. The next upside objective is 88.320. The
next area of resistance is around 87.700 and 88.320, while 1st support hits
today at 85.920 and below there at 84.750.

 

LEAN HOGS RECAP

3/2/2005

April Lean Hogs finished down 0.60 at 74.65, 1.30
off the high and 0.20 up from the low.

March Pork Bellies closed down 0.67 at 89.35.
This was equal to the low and 0.90 off the high.

April hogs moved to the highest level since
January 26th early in the session on talk of higher cash markets for later this
week and talk of firm export demand for US pork. However, commercial selling
emerged to turn the market lower. Fears that packer profit margins will be
pinched with higher cash prices and fears of increasing supply in the weeks
ahead along with the premium of futures to cash helped trigger the sell-off and
moderately lower close. The 2-day lean index for the period ending February 28th
came in at 70.57, up.08 on the session and up from 68.14 last week. Slaughter
came in at 387,000 head from trade expectations for 385,000-392,000 head.

Technical Outlook

HOGS (APR) 03/03/2005: The market back below the
40-day moving average suggests the longer-term trend could be turning down.
Rising stochastics at overbought levels warrant some caution for bulls. The
cross over and close above the 18-day moving average is an indication the
longer-term trend has turned positive. The market could take on a defensive
posture with the daily closing price reversal down. The market’s close below the
pivot swing number is a mildly negative setup. The next upside target is 76.420.
The next area of resistance is around 75.400 and 76.420, while 1st support hits
today at 73.920 and below there at 73.450.

 

COCOA MARKET RECAP

3/2/2005

May Cocoa finished down 32 at 1720, 5 off the
high and 15 up from the low.

Cocoa closed lower today amid reports of new crop
selling by Ghana. Apparently this was surprising to the trade, as hedge selling
usually occurs later in the season. The market had become overbought after the
sharp runup in prices over the past few weeks and was due for a correction. The
International Cocoa Organization forecast 2004/05 global cocoa production at
3.215 million tons, down from 3.473 in 2003/04, while demand was forecast at
3.233 versus 3.205 a year earlier. There little news out of the Ivory Coast
today, in sharp contrast to the reports of civil war and labor strife that
fueled the market’s rise earlier in the week. Farmers’ labor unions had called a
strike for Thursday.

Technical Outlook

COCOA (MAY) 03/03/2005: Rising stochastics at
overbought levels warrant some caution for bulls. 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 below the 1st swing support number suggests a
moderately negative setup for today. The near-term upside objective is at 1737.
The next area of resistance is around 1730 and 1737, while 1st support hits
today at 1710 and below there at 1698.

 

COFFEE MARKET RECAP

3/2/2005

May Coffee closed up 0.10 at 121.55. This was
0.25 up from the low and 3.55 off the high.

May coffee closed just 10 higher on the session
and down 355 points from the highs of the day. The successful test of the highs
and close below the opening could be considered bearish technical action. The
market is still operating under the negative influence of the weekly closing
price reversal from a contract high last week. The rally was led by surging fund
buying in London and a move to the highest level since February 2003 for the
nearby futures and the highest close in nearly 5 years. The drought in Vietnam
is a potential threat to the robusta supply for next year which supports London
but not necessarily New York futures. Germany imported 787,406 bags which
brought 2004 imports to 15.96 million bags, up 9.9% from 2003.

Technical Outlook

COFFEE (MAY) 03/03/2005: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The major
trend could be turning up with the close back above the 18-day moving average.
The market has a slightly positive tilt with the close over the swing pivot. The
next downside target is 118.60. The next area of resistance is around 123.45 and
126.15, while 1st support hits today at 119.65 and below there at 118.60.

 

SUGAR MARKET RECAP

3/2/2005

May Sugar closed down 0.02 at 9.04. This was 0.07
up from the low and 0.05 off the high.

The sugar market drifted lower to close 2 lower
for the May futures with a lack of new cash buying news helping to keep the
market in a long liquidation mode. The worst prolonged drought in 64 years has
traders believing that Cuba exports to Russia will be down for the coming year.
Cuba officials still talk of a crop no more than 1.8 million tons (harvest
season December to May) as compared with 2.53 million tons and some traders
believe production will be as low as 1.5 million tons. Traders believe that
China will take early supplies and that much of the Russian import demand
(thought to be near 2.5-3.0 million tons) will be fulfilled from other sources.
Trade house sellers in London helped contribute to the weakness in London. Talk
that the coming Russian sugar crop could be as high as last years bumper crop
helped keep buyers on the sidelines.

Technical Outlook

SUGAR (MAY) 03/03/2005: 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. It is a slightly
negative indicator that the close was under the swing pivot. The next downside
target is 8.92. The next area of resistance is around 9.10 and 9.15, while 1st
support hits today at 8.98 and below there at 8.92.

 

COTTON MARKET RECAP

3/2/2005

May Cotton finished down 0.40 at 50.19, 1.46 off
the high and 0.44 up from the low.

The outside day down after hitting the highest
level since September 27th could attract additional technical selling for May
cotton tomorrow unless export sales can provide support. For the weekly export
sales report, released before the opening, traders are looking for cotton sales
near 150,000-200,000 bales as compared with 243,900 bales last week. Trade house
selling emerged to knock the market down after speculative buying helped support
early. Hopes for increased demand ahead from world textile manufacturers,
especially China, helped to support. For shipments, traders are looking for near
300,000-320,000 bales as compared with 316,200 bales last week.

Technical Outlook

COTTON (MAY) 03/03/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market now above the 18-day moving average suggests the longer-term
trend has turned up. The daily closing price reversal down puts the market on
the defensive. The market’s close below the pivot swing number is a mildly
negative setup. The near-term upside target is at 52.34. The next area of
resistance is around 51.14 and 52.34, while 1st support hits today at 49.24 and
below there at 48.55.