Here’s What Soybeans’ Second-Highest Close In History Suggests…

Technical Outlook

BONDS (JUN) 03/15/04: It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for bonds is at 115.13 and then again at 116.05, while swing support hits at 114.11 and below there at 114.01. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 116.05. The 9-day RSI over 70 indicates the market is approaching overbought levels.

T-NOTES(JUN) Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 116.19. The market’s close below the pivot swing number is a mildly negative setup. The major trend is down with the cross over back below the 40-day moving average. Near-term resistance for the T-Notes is at 116.04 and then again at 116.19, while swing support hits at 115.14 and below there at 115.07. The market’s short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels.

STOCK INDICES RECAP

3/12/2004

We are both surprised and impressed by the initial positive reaction in stock prices over the last two sessions. It would appear that the stock market has become less concerned about the threat of terrorism and we are not sure why that is the case. Maybe some inventors think terrorism threats are a way of life and are something to accept. Certainly the stock was supposed by another Greenspan reiteration that job growth was coming but that story is becoming stale. We doubt that the stock market took too much confidence from the slide in energy prices but a series of declines in energy prices would be supportive.

Technical Outlook

S&P500 (JUN) 03/15/04: With the close over the 1st swing resistance number, the market is in a moderately positive position. Underlying support comes in at 1112.75 and 1104.98, with overhead resistance at 1124.05 and 1127.58. The market’s short-term trend is negative as the close remains below the 9-day moving average. Daily stochastics are trending lower, but have declined into oversold territory. The next downside objective is now at 1104.98.

S&P E-Mini (JUN): The daily closing price reversal up is a positive indicator that could support higher prices. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The next downside objective is 1095.69. The market setup is supportive for early gains with the close over the 1st swing resistance. Near-term resistance for the S&P Mini is at 1127.88 and then again at 1133.19, while swing support hits at 1109.13 and below there at 1095.69. A negative signal for trend short-term was given on a close under the 9-bar moving average.

NASDAQ (JUN) The market’s close below the 9-day moving average is an indication the short-term trend remains negative. A positive setup occurred with the close over the 1st swing resistance. The market should run into resistance at 1440.25 and above there at 1445.88 with support at 1422.75 and 1410.88. The daily stochastics have crossed over up which is a bullish indication. The next upside target is 1445.9.

MINI DOW (JUN) The daily closing price reversal up is positive. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market should run into resistance at 10286 and above there at 10329 with support at 10135 and 10027. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 10027. A positive setup occurred with the close over the 1st swing resistance.

CURRENCY MARKET RECAP

3/12/2004

The Dollar is either getting the benefit of the doubt on the recovery front or is being given credit for its head start in the Homeland Security efforts. It might also be that terrorists have limited reach and financing and that the risk and cost of hitting the US is greater for a domestic attack and therefore, other countries are becoming targets. Prior to this week most of the trade expected a concentrated terrorist focus on US targets and now the risk would seem to be spread around.

Technical Outlook

YEN (JUN): The market’s close above the 9-day moving average suggests the short-term trend remains positive. It is a slightly negative indicator that the close was lower than the pivot swing number. Swing resistance is targeted at 90.76 and above there at 91.08, with the yen finding support around 90.06 and below there at 89.68. The close under the 40-day moving average indicates the longer-term trend could be turning down. Daily stochastics are showing positive momentum from oversold levels which should reinforce a move higher if near-term resistance is taken out. The next upside target is 91.08.

EURO (JUN): Momentum studies are trending higher from mid-range which should support a move higher if resistance levels are penetrated. The near-term upside objective is at 1.2290. The market is in a bearish position with the close below the 2nd swing support number. Swing support for the Euro comes in at 1.2094, with overhead resistance at 1.2290. The market’s short-term trend is negative as the close remains below the 9-day moving average. The major trend is down with the cross over back below the 40-day moving average. The gap down on the day session chart is bearish with more selling pressure possible today.

PRECIOUS METALS RECAP

3/12/2004

The gold market came under aggressive liquidation pressure possibly because of significant upside gains in the US Dollar. We have to think that the failure to see any flight to quality buying in gold and silver off the recent bombing prompted some bulls to exit especially considering the added pressure thrown off by the higher Dollar. The silver market was significantly overbought around the highs of the week and neither silver nor copper showed any initial negative reaction to the Madrid bombing and therefore the action Friday could have been catch-up.

Technical Outlook

SILVER (MAY): The swing indicator gave a moderately negative reading with the close below the 1st support number. Initial support for silver is at 692.3 and below there at 679.2 with resistance likely at 710.0 and 720.3. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 710.0.

GOLD (APR): Support for gold today comes in near 390.70, while resistance is pegged at 403.10. Momentum studies are trending higher from mid-range which should support a move higher if resistance levels are penetrated. The near-term upside objective is at 403.10. The market is in a bearish position with the close below the 2nd swing support number. The market’s short-term trend is negative as the close remains below the 9-day moving average.

COPPER MARKET RECAP

3/12/2004

The copper market finished sharply lower after failing to react negatively to the initial bombing stories in the action Thursday. In fact, given the nearly straight up action in the copper on Thursday it is not surprising that copper backed off just in case the world economy comes under a sustained threat of terrorism. The volatility potential in the copper market is certainly increasing as the economy is less secure, prices are relatively high historically and the market is overbought technically.

ENERGY MARKET RECAP

3/12/2004

The energy markets seemed to have played catch-up to the disturbing macro economic threats of the week but the break could be a little overdone if OPEC appears to be poised to take the full April 1st production cut. While the market is still aware of the Venezuelan overproduction, many OPEC members are wondering if Venezuela is going to pare back their 1.3 million barrel per day overproduction especially after the recent political problems in that country. Unless there is a lasting economic threat lodged by the Madrid bombing we doubt that energy prices will be consistently pressured.

Technical Outlook

CRUDE OIL (MAY): The market’s close below the 1st swing support number suggests a moderately negative setup for today. Support for crude is keyed on 34.95 and below there at 34.25, with resistance pegged at 36.20 and 36.75. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The next downside objective is now at 34.25. Daily studies pointing down suggests selling minor rallies.

UNLEADED GAS (MAY): Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 105.21. The swing indicator gave a moderately negative reading with the close below the 1st support number. Resistance today is at 112.61, while support should be found around 105.21. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Short-term indicators on the defensive. Consider selling an intraday bounce.

HEATING OIL (MAY):The market’s close below the 1st swing support number suggests a moderately negative setup for today. Heating oil should encounter support around 84.19, with resistance is at 90.39. Daily studies pointing down suggests selling minor rallies. The market’s short-term trend is negative as the close remains below the 9-day moving average. 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 84.19.

CORN MARKET RECAP

3/12/2004

The corn market followed soybeans higher into the close and managed to put up positive gains for the week. The market is finding support from the strength in the soybean complex and a lack of selling pressures in the wheat market. Brazil crop concerns continue to support the soybean complex and the market seems to be consolidating in an attempt to correct the overbought condition of the market. With corn competing with soybeans and cotton for this springs planted acreage, the trade logic is that unless corn keeps pace, the jump in soybeans could attract additional plantings. Strength in the March contract and reports of still slow producer selling helped support. Taiwan bought 42,000 tons of US corn overnight. Other news is slow today and traders await the Commitment-of-Traders reports for release after the close to get a better feel on the extent of the speculative net long position in the market. A strong stopper took 67 of the 103 deliveries this morning. March contracts expire at noon today. March corn closed (and expired) at noon at 295 1/2 which was 2 1/2 cents higher on the session and down just 3 cents from the contract highs.

Technical Outlook

CORN (MAY) 03/15/04: 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 297 1/4. The market’s close above the 2nd swing resistance number is a bullish indication. Market resistance comes in at 304 1/4 today, with support at 297 1/4. The market’s short-term trend is positive on a close above the 9-day moving average.

SOY COMPLEX RECAP

3/12/2004

The second highest close for the history of the contract with solid gains on the week is considered positive technical action; especially with a bearish USDA report from the USDA this week and rains in the southern drought areas of Brazil. The trade action suggests that the crop losses in Brazil may be on the rise. The market is finding support from a steady flow of reports from Brazil that the soybean crop could be down more significantly than the USDA forecast this week at 59.5 million tons. The current trade sentiment seems to be near 56 million tons but between flood damage in the north, drought damage in the south and Asian rust losses the trade remains on edge with reports coming in significantly below and above the 56 million ton mark. Private forecast of 54-55 million tons this week helped support the market and there are concerns that production estimates will drop further as producers move deeper into harvest. Basis levels are firmer at the gulf which is supportive after yesterday’s rally. South Korea bought 50,000 tons of meal from South America overnight. Deliveries this morning were at 295 lots for soybeans, 290 for meal and 276 lots for oil. March contracts expire at noon today. March soybeans closed (and expired) at noon at 954 which was 10 cents higher on the session but down 25 cents from the contract highs. March meal closed (and expired) at noon at 290.00 and made new contract highs and a new high close for the contract on the last trading day. March soyoil closed (and expired) at noon at 33.05 which was 25 lower on the session but down 198 points from the contract highs.

Technical Outlook

SOYBEANS (MAY) 03/15/04: A positive setup occurred with the close over the 1st swing resistance. The next area of resistance is around 963 1/2 and 969 1/4, while 1st support hits today at 948 and below there at 938 1/4. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 938 1/4.

MEAL (MAY): The daily stochastics gave a bullish indicator with a crossover up. The near-term upside objective is at 297.7. The rally brought the market to a new contract high. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. First resistance comes in at 295.8, with support at 289.6. The market’s short-term trend is positive on a close above the 9-day moving average. The market’s close above the 2nd swing resistance number is a bullish indication.

BEAN OIL (MAY): The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 32.43. It is a slightly negative indicator that the close was lower than the pivot swing number. Daily swing resistance is found at 33.36 and above there at 33.65. Support should be encountered at 32.75 and 32.43.

WHEAT MARKET RECAP

3/12/2004

A new low for the year followed by a higher close may be a short-term positive technical factor but the sharp drop on the week is considered another bearish force. The market found support from strength in the other grains and ideas that futures are oversold after the recent losses. The USDA released a report on the winter grain situation in Russia with indications of more favorable soil conditions and less winterkill but a drop in planted acreage for winter grains of 10%. The report also indicated good conditions for Ukraine as well. Basis bids were steady. The perception of improving crop conditions in the US has helped to trigger long liquidation selling this week and some short-covering from the oversold condition seems to be providing support. Deliveries this morning were 53 contracts. Registrations with the CBOT are at 2143 contracts which is down from 2160 lots reported late Wednesday. March wheat closed (and expired) at noon at 357 which was 2 cents higher on the session but down 57 cents from the February highs.

Technical Outlook

WHEAT (MAY) 03/15/04: The daily closing price reversal up is positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Look for near-term support at 360 1/2 and below there at 356 1/4, with resistance levels at 368 1/2 and 372 1/4. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 356 1/4.

LIVE CATTLE RECAP

3/12/2004

The market pulled lower in quiet choppy trade as fears of a near-term top in cash and beef markets helped to trigger some light long liquidation selling. However, the huge discount of futures to the cash market provided underlying support. Boxed-beef cut-out values were down 48 cents to $143.11 as compared with $141.58 last week at this time. With the higher cash market and the lower beef price late in the week, the packer margins may have been pinched.

Technical Outlook

CATTLE (APR) 03/15/04: Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 82.47. The swing indicator gave a moderately negative reading with the close below the 1st support number. Support should be encountered at 80.95 and below there at 80.62. Market resistance is at 81.87 and then again at 82.47. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The 9-day RSI over 70 indicates the market is approaching overbought levels.

LEAN HOGS RECAP

3/12/2004

The market was mixed on the session with the nearby April finding support from higher cash markets and the recent surge in loin prices while June and the summer months were under pressure from ideas that the market is overbought. New contract highs and a lower close could attract some technical selling next week as the reversal could signal a near-term top. The CME 2-Day Lean index was down 15 cents to 65.09 as compared with 62.03 on March 1st. A $5.00 jump in loin values late this week helped support solid gains in pork cut-out values and supported improving profit margins for the packer. As a result, cash hogs were higher ($1.50 higher at Peoria) and could remain firm early next week.

Technical Outlook

HOGS (APR) 03/15/04: With the close over the 1st swing resistance number, the market is in a moderately positive position. Resistance levels comes in at 64.65 and 64.82 today, while support is around 64.00 and then 63.52. The rally brought the market to a new contract high. Consider buying pull-backs since daily studies are bullish. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 64.82.

COCOA MARKET RECAP

3/12/2004

The cocoa market managed to hold above the recent lows but there doesn’t seem to be any major fundamental reason to suspect a major low is in place. The registered arrivals at the Ivory Coast up to March 10th were still less than 900,000 tons, which might be a little less than prior expectations. It should also be noted that trade buyers were into the equation and that might give some impression of a firming low.

Technical Outlook

COCOA (MAY)03/15/04 The market has a slightly positive tilt with the close over the swing pivot. Cocoa should run into resistance at 1419 and above there at 1428 with support at 1396 and 1382. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1381.75.

COFFEE MARKET RECAP

3/12/2004

July coffee closed 45 lower on the session but 110 higher on the week. The move to a new high for the week early in the session was met with producer selling and some light long liquidation selling from speculators which forced the market lower into the close. Strength in London helped support the early gains but the outlook for good rains in Brazil coffee areas for Sunday and Monday may have helped to trigger the selling. For Monday’s Monthly US Green Coffee stocks report for the end of February, traders are looking for stocks to come in near 5.324-5.954 million bags as compared with 5.624 million bags at the end of January. This would be a decline of 300,000 bags to an increase of 350,000 bags.

Technical Outlook

COFFEE (MAY)3/15/04 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. 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 78.00.The Coffee contract should run into resistance at 76.95 and above there at 78.00 with support at 75.15 and 74.40. The market’s short-term trend is positive on a close above the 9-day moving average.

SUGAR MARKET RECAP

3/12/2004

May sugar close 1 tick higher on the session but the close was below the opening and 10 points below the highs of the day. The aggressive fund buying of the week slowed late in the session and profit-taking set-in. Concerns with the size of the upcoming Brazil crop after drought conditions for the first few months of the year in certain regions helped to support a run to the highest level since August. London sugar closed near the lows and lower on the session after a surge to new contract highs on Thursday. May sugar closed 49 higher on the week.

Technical Outlook

SUGAR (MAY) 03/15/04: It is a mildly bullish indicator that the market closed over the pivot swing number. Swing resistance comes in at 6.82, with support found at 6.58. The market’s short-term trend is positive on a close above the 9-day moving average. Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 6.82. With a reading over 70, the 9-day RSI is approaching overbought levels.

COTTON MARKET RECAP

3/12/2004

The market pushed sharply lower on the session and gave back all of the gains from Thursday as the gap lower opening attracted more long liquidation selling from speculators. Trade house buying came in to support the market near the 66.00 basis July. The market lost near 500 points on the week with the collapse into the Supply/demand report. The Cotlook A Index was up 85 cents to 71.85 and gained $2.60 on the week.

Technical Outlook

COTTON (MAY) 03/15/04: The market’s close below the 9-day moving average is an indication the short-term trend remains negative. Short-term indicators on the defensive. Consider selling an intraday bounce. The swing indicator gave a moderately negative reading with the close below the 1st support number. Next resistance area comes in at 65.21 and then again at 66.06, while support is targeted at 64.04 and 63.72. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 63.72. ORANGE JUICE (MAY)3/15/04 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. Orange Juice should run into resistance at 62.60 and above there at 63.10 with support at 61.80 and 61.50. The market’s short-term trend is negative as the close remains below the 9-day moving average. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside objective is now at 61.5.