Here’s What China Is Rumored To Be Doing In Sugar

Technical Outlook

BONDS (MAR) 12/3/2003: The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for bonds is at 108.01 and then again at 108.11, while swing support hits at 107.03 and below there at 106.15. A negative signal for trend short-term was given on a close under the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 106.15.

T-NOTES(MAR) Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 109.26. It is a mildly bullish indicator that the market closed over the pivot swing number. Near-term resistance for the T-Notes is at 110.29 and then again at 111.03, while swing support hits at 110.08 and below there at 109.26. The market’s short-term trend is negative as the close remains below the 9-day moving average.

STOCK INDICES RECAP

12/2/2003

One might call the action in the stock market a little disappointing after the layoff report showing a 42% decline in the month of November. It is possible that the private weekly chain store sales activity was disappointing to the stock market and it is also possible that the market was overbought and in need of a temporary correction. Some traders suggested that higher energy prices and a declining Dollar prompted some investors to dump stocks. In conclusion, the stock market wasn’t significantly undermined by the events Tuesday and the bulls look to be waiting on the sidelines in greater numbers than is present in the bear camp.

Technical Outlook

S&P500 (DEC) 12/3/2003: It is a slightly negative indicator that the close was under the swing pivot. The daily closing price reversal down is a negative indicator for prices. Underlying support comes in at 1063.25 and 1060.63, with overhead resistance at 1069.75 and 1073.63. Stochastics are rising from over sold levels which is bullish and should support higher prices. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside objective is at 1073.63.

S&P E-Mini (DEC): A new contract high was made on the rally. The downside closing price reversal on the daily chart is somewhat negative. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 1073.94. 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 1070.13 and then again at 1073.94, while swing support hits at 1063.38 and below there at 1060.44. A positive indicator was given with the upside crossover of the 9 & 18 bar moving average.

NASDAQ (DEC) The market could take on a defensive posture with the daily closing price reversal down. 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 1445.00 and above there at 1456.00 with support at 1427.00 and 1420.00. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 1456.00.

CURRENCY MARKET RECAP

12/2/2003

A real telling tale in the Dollar, as the Dollar Index fell to new contract lows after three straight days of very favorable US economic information. In other words, one might wonder just exactly what it might take to alter the trend in the Dollar? Since the economic differential argument isn’t playing in the market it is possible that the interest rate differential might turn the tide. However, early Monday morning the trade was talking about higher US rates but that support was apparently short lived. In the near term the trends in the currency markets look to extend aggressively.

Technical Outlook

YEN (DEC): A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Swing resistance is targeted at 92.44 and above there at 92.65, with the yen finding support around 91.75 and below there at 91.27. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 91.27.

EURO (DEC): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 1.2174. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Swing support for the Euro comes in at 1.1930, with overhead resistance at 1.2174. The close above the 9-day moving average is a positive short-term indicator for trend. The market is becoming somewhat overbought now that the RSI is over 70. Follow-through selling is indicated by the key reversal down. The market rallied to a new contract high. More selling pressure is likely given yesterday’s gap lower price action on the day session chart.

PRECIOUS METALS RECAP

12/2/2003

It is a little disappointing that gold only managed a slight rally considering that the Dollar was down sharply and into new contract lows. It is also surprising that gold prices failed to peg prices to the upside with comments from Barrick that they would continue to reduce their hedge book and that thy currently had 71 million ounces of gold un-hedged. Once de-hedging is largely in place de-hedging is no longer a bullish fundamental as all that is left is the return of hedging.

Technical Outlook

SILVER (MAR): The market has a slightly positive tilt with the close over the swing pivot. Initial support for silver is at 546.0 and below there at 538.3 with resistance likely at 551.5 and 558.0. A positive signal for trend short-term was given on a close over the 9-bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 551.5.

GOLD (FEB): Support for gold today comes in near 397.43, while resistance is pegged at 410.83. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 410.83. The close over the pivot swing is a somewhat positive setup. The close above the 9-day moving average is a positive short-term indicator for trend. The market rallied to a new contract high.

COPPER MARKET RECAP

12/2/2003

A massive rally in copper prices once again reconfirms the interest on the part of the Chinese and clearly suggests that buyers are on the sidelines and they are not scared off by moderately high prices. The trade continued to see professional buying on Tuesday suggesting that the current move isn’t just small spec players chasing prices higher. Dow Jones news wires reported broker buying in London and that might be considered commercial or professional buying. Many times a big up trend culminates with the small spec buyers’ pushing prices up on the last leg but so far that isn’t the case in the copper market.

ENERGY MARKET RECAP

12/2/2003

The energy complex seemed to fuel up off two themes Tuesday. Initially the market seemed to be sparked higher by ideas that Iraqi production contracted by 200,000 to 300,000 barrels per day. Later in the session we think that some spec longs came into position because they expect the recent pattern of declines in US crude stocks to be seen in the reports Wednesday morning. Also supporting prices Tuesday were suggestions from Libya that there was no excess oil supply in the market place and that is why no production cut was needed in the December OPEC meeting.

Technical Outlook

CRUDE OIL (JAN): The cross over and close above the 40-day moving average is an indication the longer-term trend is 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. Support for crude is keyed on 30.40 and below there at 29.91, with resistance pegged at 31.17 and 31.45. The close below the 9-day moving average is a negative short-term indicator for trend. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 29.91.

UNLEADED GAS (JAN): Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 81.92. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Resistance today is at 86.12, while support should be found around 81.92. A negative signal for trend short-term was given on a close under the 9-bar moving average. The market now above the 40-day moving average suggests the longer-term trend is up.

HEATING OIL (JAN): There could be more upside follow through since the market closed above the 2nd swing resistance. Heating oil should encounter support around 83.52, with resistance is at 88.42. The close above the 9-day moving average is a positive short-term indicator for trend. The cross over and close above the 40-day moving average is an indication the longer-term trend is up. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 83.52. Follow through buying looks likely if the market can hold yesterday’s gap on the day session chart.

CORN MARKET RECAP

12/2/2003

March corn closed 1 cent lower on the session in the middle of a tight trading range. Ideas that the market is overbought helped trigger some light long liquidation selling. A lack of producer selling and steady basis at the gulf provided underlying support. Taiwan bought 56,000 tons of US corn but there is still no word from South Korea. Traders are hopeful that South Korea buys some corn from the US this week. News of 80 deliveries against the Dec contract and weakness in wheat helped pressure the market early on but the late rally in soybeans helped provide some support. Traders seemed to turn slightly negative for the short-term after viewing a hefty net long position by fund traders in the COT report.

Technical Outlook

CORN (MAR) 12/3/2003: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 250 1/2. It is a slightly negative indicator that the close was under the swing pivot. Market resistance comes in at 250 1/2 today, with support at 246 . The upside crossover of the 9 & 18 bar moving average is a positive signal.

SOY COMPLEX RECAP

12/2/2003

The market pushed sharply higher on the session as a recovery in the meal market and expectations for continued strong demand for soybeans helped support active buying from funds and speculators. A lack of confirmation of China buying US soybeans in the past week, weakness at the China exchange overnight and weakness for palm futures helped trigger the early weakness. Some commercial buying was also noted near the lows and the market managed to hold support at the 40-day moving average for the 3rd session in a row before the 24 cent surge off of the lows of the session. January meal was up more than $4/ton and January oil closed higher and into new contract and 5 1/2 year highs. Taiwan bought 56,000 tons of US soybeans.

Technical Outlook

SOYBEANS (JAN) 12/03/03 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 785 and 793 , while 1st support hits today at 761 and below there at 745 . The market’s close on the 9-day moving average is neutral. 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 793 .

MEAL (JAN): Stochastics are rising from over sold levels which is bullish and should support higher prices. The near-term upside target is at 238.8. First resistance comes in at 236.2, with support at 229.1. 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 (JAN): A positive signal for trend short-term was given on a close over the 9-bar moving average. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 28.15. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The outside day up is somewhat positive. The market made a new contract high on the rally. The daily closing price reversal up is a positive indicator that could support higher prices. Daily swing resistance is found at 27.99 and above there at 28.15. Support should be encountered at 27.46 and 27.09.

WHEAT MARKET RECAP

12/2/2003

March wheat closed 2 1/2 cents lower on the session but up 7 1/2 cents from the lows of the day as there was plenty of buying support on the early corrective break. Long liquidation selling, thought to be profit-taking, emerged to pressure the market early after the COT reports showed a hefty net long position. Dryness in the western plains and talk of lower production in China this winter provided underlying support. The market also found some support at mid-session on news that Morocco will lower their import tariffs on wheat to 55% from 90% on December 8th.

Technical Outlook

WHEAT (MAR) 12/3/2003: The market tilt is slightly negative with the close under the pivot. Expect near-term support around 402 and below there at 396 , with resistance levels at 411 and 414 . 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 414 .

LIVE CATTLE RECAP

12/2/2003

February cattle closed sharply higher and December ending up higher after early weakness as hopes for improving cash markets helped support and the rolling of longs into February helped keep December under pressure early in the session. Cash bids from packers emerged at $96-$98 with asking prices at $102-$103. Boxed-beef cut-out values were up $1.36 to $163.10 which added to the positive tone. December cattle closed near the highs of the day and up near 165 points off of the lows of the day. February cattle closed near the highs as well and into new contract high territory.

Technical Outlook

CATTLE (FEB) 12/3/2003: Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 95.90. The market setup is supportive for early gains with the close over the 1st swing resistance. Support should be encountered at 93.90 and below there at 92.75. Market resistance is at 95.47 and then again at 95.90. The market made a new contract high on the rally. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market is approaching overbought levels with an RSI over 70.

LEAN HOGS RECAP

12/2/2003

Hog futures closed moderately lower with an inside trading session as the market is consolidating recent gains. Cash hogs were steady at Peoria and $1.00 lower in St Louis which helped pressure the market. The weaker cash market had a little more of an impact than normal after the surge in futures to a hefty premium in the past week. Slaughter came in at a hefty 394,000 head. Traders are looking for the weekly cold storage report to show an in-movement of 1.6-2.0 million pounds as compared with 2.163 million in-movement last week. The 2-day CME Lean Index was up 19 points to 49.27 as compared with 49.21 back on November 17th.

Technical Outlook

HOGS (FEB) 12/3/2003: It is a slightly negative indicator that the close was under the swing pivot. Resistance levels comes in at 56.70 and 57.22 today, while support is around 55.60 and then 55.02. 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 target is at 57.22.

COCOA MARKET RECAP

12/2/2003

After another attempt to rally the cocoa market settled lower on the session, suggesting that near term political concerns haven’t escalated. Apparently origin hedging pressured prices as growers are seeing prices significantly above last week’s price levels. A sharp rise in CSCE warehouse stocks could be considered a negative but we haven’t detected a pattern in that factor to be overly excited about. It should be noted that an Ivory Coast Youth Leader has asked protestors to leave French Civilians alone and that would seem to be an effort to contain the violence.

Technical Outlook

COCOA (MAR)12/03/03 The downside closing price reversal on the daily chart is somewhat negative. The market tilt is slightly negative with the close under the pivot. Cocoa should run into resistance at 1564 and above there at 1596 with support at 1516 and 1500. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 1596.00.

COFFEE MARKET RECAP

12/2/2003

Heavy short covering by funds continued this session prompted by growing expectations that Brazil’s 2004/05 coffee crop could come in lower than a 45 million bag crop. A lack of rain during the flowering period is raising ideas of a smaller crop, which would be on the heels of a small 2003/04 crop of just 30 million bags. Funds had been building a large net short position prior to last week and are now getting out of those positions ahead of the Brazilian government’s crop estimate released Dec 10th. This week, a US attach‚ report should be released and will give traders an idea about the condition of the crop, but will not include a crop estimate. Brazil’s green coffee exports were down 40% in November vs year ago.

Technical Outlook

COFFEE (MAR)12/3/03 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. 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 66.80.The Coffee contract should run into resistance at 66.00 and above there at 66.80 with support at 63.9 and 62.60. The market’s short-term trend is positive on a close above the 9-day moving average. The major trend could be turning up with the close back above the 40-day moving average.

SUGAR MARKET RECAP

12/2/2003

Similar to many other commodity markets, China is a major consumer and producer of Sugar and depending on the year, a significant importer or sometimes an exporter of sugar. After several years of large crops, the current crop season is showing uncertain production and there is more and more talk of China becoming a more significant importer for the coming season. If China begins to import, and fund traders shift from a net short position of near 12,000 contracts in this weeks report to a net long position, the market seems to have plenty of potential to move higher in the weeks just ahead. Talk that China could end up importing more than 1 million tons in the next year helped provide solid buying support.

Technical Outlook

SUGAR (MAR) 12/3/2003: There could be more upside follow through since the market closed above the 2nd swing resistance. Swing resistance comes in at 6.44, with support found at 6.28. The close above the 9-day moving average is a positive short-term indicator for trend. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 6.28.

COTTON MARKET RECAP

12/2/2003

After 4 straight limit moves, March cotton closed slightly higher with two-sided trade. It was a much quieter trading session and with the recent volatility, the market seemed to need a break. Ideas that China has bought near 1.0-1.5 million bales of US cotton in the past week helped provide underlying support but the trade is now looking for confirmation of the buying in the weekly sales report. Small spec selling helped pressure the market early in the session. On top of the China situation, a smaller crop in Egypt and a strong world economy combined with recent weakness in the US dollar is seen as bullish.

Technical Outlook

COTTON (MAR) 12/3/2003: A positive signal for trend short-term was given on a close over the 9-bar moving average. Daily studies suggest buying dips today. The market setup is supportive for early gains with the close over the 1st swing resistance. Next resistance area comes in at 74.41 and then again at 74.98, while support is targeted at 72.76 and 71.68. 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 74.98. The outside day up is somewhat positive. The daily closing price reversal up is a positive indicator that could support higher prices.