Here’s Why The Action In Corn Is Historic

Technical Outlook

BONDS (MAR) 2/25/2004: The market has a slightly positive tilt with the close over the swing pivot. Near-term resistance for bonds is at 113.17 and then again at 114.01, while swing support hits at 112.23 and below there at 112.13. 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 114.01.

T-NOTES(MAR) Momentum studies are trending higher, but have entered overbought levels. The near-term upside objective is at 115.19. The market’s close above the 2nd swing resistance number is a bullish indication. 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 115.10 and then again at 115.19, while swing support hits at 114.26 and below there at 114.19. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

2/24/2004

All things considered, the stock market performed fairly well in action Tuesday. After starting out weak, making another new low for the move, the market then managed a mid day recovery back into positive territory. However, the market couldn’t hold the mid day bounce showing that the bear camp is still in control of prices. However, the fact of the stock market managed the recovery at all, in the wake of the extremely disappointing Conference Board readings, shows that the bull camp has some wherewithal. The Nasdaq and the Dow both continue to be weaker than the S&P, which highlights a disjointed lack of consensus in the marketplace. Furthermore, it would not seem as if the economic report slate is set to improve anytime soon, with contractions expected in existing home sales on Wednesday and a nondescript initial claims report due out on Thursday.

Technical Outlook

S&P500 (MAR) 2/25/2004: It is a slightly negative indicator that the close was under the swing pivot. Underlying support comes in at 1133.40 and 1127.90, with overhead resistance at 1144.20 and 1149.50. 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 objective is now at 1127.90.

S&P E-Mini (MAR): A new contract high was made on the rally. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1127.50. It is a slightly negative indicator that the close was lower than the pivot swing number. Near-term resistance for the S&P Mini is at 1143.75 and then again at 1149.50, while swing support hits at 1132.75 and below there at 1127.50. The market’s close below the 9-day moving average is an indication the short-term trend remains negative.

NASDAQ (MAR) A negative signal for trend short-term was given on a close under the 9-bar moving average. The market tilt is slightly negative with the close under the pivot. The market should run into resistance at 1475.00 and above there at 1486.50 with support at 1452.00 and 1440.50. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The next downside objective is 1440.50.

MINI DOW (MAR) The close below the 9-day moving average is a negative short-term indicator for trend. The market should run into resistance at 10627 and above there at 10692 with support at 10506 and 10450. 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 10450. It is a slightly negative indicator that the close was under the swing pivot.

CURRENCY MARKET RECAP

2/24/2004

The Dollar index started the session out weak and eventually ended up collapsing. Adding to the downside momentum were extremely disappointing Conference Board consumer confidence readings. With the main index down and some of the minor components down as much as 10 points, there is rising concern toward the U.S. economic recovery effort. With another set of weak numbers anticipated Wednesday morning and the residual from the Conference Board lingering in the minds of the foreign-exchange markets, the Euro Swiss and Pound look to have continued upside capacity. In fact, considering the magnitude of the gains posted in the Euro and the Pound, those markets look to maintain leadership roles.

Technical Outlook

YEN (MAR): A negative signal for trend short-term was given on a close under the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. Swing resistance is targeted at 92.68 and above there at 92.78, with the yen finding support around 92.39 and below there at 92.20. The market back below the 40-day moving average suggests the longer-term trend could be turning down. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The next downside objective is 92.20.

EURO (MAR): 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 1.2520. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Swing support for the Euro comes in at 1.2520, with overhead resistance at 1.2798. The close below the 9-day moving average is a negative short-term indicator for trend. More selling pressure is likely given yesterday’s gap lower price action on the day session chart.

PRECIOUS METALS RECAP

2/24/2004

The gold market started out the session slightly higher, but then managed to gather momentum as the session progressed. The fact that the Dollar fell through several layers of support on the charts and now looks to move even lower is more than enough reason to see gold prices move higher. In fact with every break in the Dollar its understandable that more and more speculative longs move back into gold and silver positions. Many traders suggest that gold will have very little resistance until April returns to the $410 level, while others suggest that silver lacks resistance until the $6.75 level. As in the past, the primary driving force behind bull camp in gold and silver will continue to be the U.S. Dollar.

Technical Outlook

SILVER (MAY): The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Initial support for silver is at 657.9 and below there at 649.4 with resistance likely at 663.2 and 670.4. A positive signal for trend short-term was given on a close over the 9-bar moving average. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 649.4. If yesterday’s gap higher on the day session chart holds, additional buying could develop this session.

GOLD (APR): Support for gold today comes in near 400.65, while resistance is pegged at 407.45. 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 400.65. There could be more upside follow through since the market closed above the 2nd swing resistance. The close below the 9-day moving average is a negative short-term indicator for trend. Follow through buying looks likely if the market can hold yesterday’s gap on the day session chart.

COPPER MARKET RECAP

2/24/2004

The copper market started out with nondescript early action but then managed post a strong finish and highest close yet in the May contract. The trade continues to see strength in many base metals particularly lead and zinc and that is giving copper bulls confidence. In other words, the demand outlook for most industrial metals would appear to be broad based and entrenched. In other words, current demand patterns are not just a passing Chinese fluke and the buying isn’t apparently discouraged by sharply higher prices. Certainly with the ongoing rally the fund and small spec long position in copper is approaching the record of 60,000 contracts but considering the appetite of the physical players, it would not seem as if the market is ready to top.

ENERGY MARKET RECAP

2/24/2004

It appeared as if speculator funds and small specs decided to bank some profits Tuesday ahead of the weekly U.S. inventory reports Wednesday morning. However the trade did start out firmer off ideas that Nigeria might reduce crude exports. Apparently some sources feel the Nigerian reduction is unlikely considering such lofty price levels. However, from the technical action Tuesday, it would seem as if the market is still somewhat overbought and vulnerable to periodic setbacks. The general expectations for the weekly stocks data call for a 1 million increase in crude-oil stocks, a 1.5 million increase in gasoline stocks and a 2 million decrease in heating oil stocks.

Technical Outlook

CRUDE OIL (APR): The market rallied to a new contract high. The close over the pivot swing is a somewhat positive setup. Support for crude is keyed on 34.25 and below there at 33.99, with resistance pegged at 34.92 and 35.33. The close above the 9-day moving average is a positive short-term indicator for trend. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 35.33.

UNLEADED GAS (APR): Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 105.37. The market has a slightly positive tilt with the close over the swing pivot. Resistance today is at 110.17, while support should be found around 105.37. The daily closing price reversal up is a positive indicator that could support higher prices. A negative signal for trend short-term was given on a close under the 9-bar moving average.

HEATING OIL (APR):The close over the pivot swing is a somewhat positive setup. Heating oil should encounter support around 86.72, with resistance is at 89.32. 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 86.72.

CORN MARKET RECAP

2/24/2004

May corn closed 3 3/4 cents higher on the session at 297 3/4, which is 1 tick below the high of the session. It would seem that the sharp rise in November soybeans propelled the buying in corn, as the corn market is in the process of buying acres. Furthermore, the speculative fervor off the sharply higher soybean price action is fostering aggressive hedge and spec buying. With some corn contracts pushing up through psychologically important $3.00 pricing the action is taking on a historical tilt. So far, corn option premium values have not expanded at the rate being seen in soybeans and that suggests to some that the corn has more upside ahead.

Technical Outlook

CORN (MAY) 2/25/2004: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 302 3/4. There could be more upside follow through since the market closed above the 2nd swing resistance. Market resistance comes in at 302 3/4 today, with support at 289 3/4. The upside crossover of the 9 & 18 bar moving average is a positive signal. The market is becoming somewhat overbought now that the RSI is over 70. The outside day up gives the market a positive tilt. The market rallied to a new contract high. The upside daily closing price reversal gives the market a bullish tilt.

SOY COMPLEX RECAP

2/24/2004

May soybeans opened 9 cents lower at 898 but quickly bounced back as buying emerged on a test of Monday’s lows. Into the close the May beans managed to gain 19 cents on the session and closed within a cent of the session highs. Weather concerns in Brazil and Argentina were still present but some rain possibilities were in the forecast for Argentina for later this week and that helped to ease the crop concerns for that region. In addition, the rain threat to the recently wet areas of Brazil does not seem to be as significant as earlier believed but that didn’t seem to pare spec interest. A reversal in palm oil to close lower in overnight trade triggered the weakness in oil early, but the US market showed no sign of correcting after reaching new contract highs and new 19 year highs for the nearby futures. Basis was steady at the gulf, with talk that producer selling could slow further in the even that prices back off. Meal opened lower on the Texas bird flu fears but quickly rallied $4.00 on renewed tightness concerns.

Technical Outlook

SOYBEANS (MAY) 02/25/04 The market made a new contract high on the rally. 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 940 1/2 and 948 1/4, while 1st support hits today at 911 1/2 and below there at 890 1/4. The market’s close on the 9-day moving average is neutral. Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 948 1/4. The market is approaching overbought levels with an RSI over 70.

MEAL (MAY): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 287.2. The market rallied to a new contract high. First resistance comes in at 284.7, with support at 275.9. The close above the 9-day moving average is a positive short-term indicator for trend. Market positioning is positive with the close over the 1st swing resistance. The market is becoming somewhat overbought now that the RSI is over 70.

BEAN OIL (MAY): 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 34.56. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The market made a new contract high on the rally. Daily swing resistance is found at 34.32 and above there at 34.56. Support should be encountered at 33.52 and 32.96. The market is approaching overbought levels with an RSI over 70.

WHEAT MARKET RECAP

2/24/2004

May wheat closed slightly higher with a relatively quiet trading range as compared with the other grains. It was an inside trading day as the market successfully consolidated yesterdays sharp gains. Exporters confirmed this morning that China bought another 280,000 tons of US spring wheat and 150,000 tons of white wheat. While the visiting team from China indicated that additional purchases in the past week have totaled 900,000 tons, the official announcements in the past several days have added up to 875,000 tons. Total wheat commitments from China now stand at just under 3 million tons. While old crop is higher, July wheat recovered from a lower opening as new crop grain futures and the CRB rallied sharply into the close. July was under light selling pressure early with talk of a wet forecast for the central plains into early March and with talk of light rains even possible for western Kansas this weekend. Deliverable stocks for the week (as of February 20th) were down to 19.931 million bushels as compared with 20.259 million last week and 15.153 million bushels last year. CBOT registrations on Monday were at 1960 contracts from 2030 on Friday. The July wheat close was the 2nd highest for the life-of-contract.

Technical Outlook

WHEAT (MAY) 2/25/2004: The market has a slightly positive tilt with the close over the swing pivot. Expect near-term support around 395 and below there at 391 1/2, with resistance levels at 402 and 405 1/2. 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 405 1/2.

LIVE CATTLE RECAP

2/24/2004

April cattle closed sharply higher and to the highest level since January 23rd finding support from the steep discount to the cash market with February trading above $80. Ideas that cash may trade higher on the week again this week and the stiff discount of futures to the cash market helped support. A USDA official indicating that it could be just a few days before Canada and Mexico take steps to ease the bans on US beef and cattle helped provide underlying support. Boxed-beef cut-out values were up $1.93 to $129.20 as compared with $128.03 last week at this time. Slaughter came in at 124,000 head as compared with trade expectations at 119,000-126,000 head. Fund buyers were active.

Technical Outlook

CATTLE (APR) 2/25/2004: Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 77.22. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Support should be encountered at 74.62 and below there at 73.22. Market resistance is at 76.62 and then again at 77.22. If yesterday’s gap higher on the day session chart holds, additional buying could develop this session. A positive indicator was given with the upside crossover of the 9 & 18 bar moving average. The market now above the 40-day moving average suggests the longer-term trend is up.

LEAN HOGS RECAP

2/24/2004

April hogs rallied sharply to the highest level since October 16ht (contract high date) before closing lower on the session. Support was seen from the surge in cattle, hopes that US beef exports could make progress in the days just ahead and from higher pork cut-out values. The reversal could attract some technical selling early on Wednesday. Cash hogs were .50 to $1.00 lower on the session and helped trigger the lower opening but a general surge in many commodity markets and strength in the cattle was the primary supportive factor. The CME 2-day lean index was down 25 cents to $63.13 as compared with 64.01 last week at this time. Slaughter came in at 382,000 head as compared with 380,000-388,000 expected.

Technical Outlook

HOGS (APR) 2/25/2004: The close over the pivot swing is a somewhat positive setup. Resistance levels comes in at 61.55 and 62.17 today, while support is around 60.42 and then 59.92. The daily closing price reversal down is a negative indicator for prices. 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 62.17.

COCOA MARKET RECAP

2/24/2004

Apparently significant weakness in U.S. Dollar prompted arbitrage traders to become buyers of the New York cocoa. With the market recently oversold and finding some support around 1450, it is possible that the market has managed some type of temporary low. However a soaring British Pound exchange rate might make London cocoa prices less attractive, thereby forcing London prices to a fresh contract low, which in turn could undermine U.S. cocoa market psychology. So far, arrivals at the Ivory Coast’s main ports have not tailed off enough to insinuate a hard bottom in prices but a key low might not be that far off.

Technical Outlook

COCOA (MAY)02/25/04 The outside day up and close above the previous day’s high is a positive signal. The daily closing price reversal up is positive. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Cocoa should run into resistance at 1516 and above there at 1529 with support at 1470 and 1437. Momentum studies are declining, but have fallen to oversold levels. The next downside target is 1436.50.

COFFEE MARKET RECAP

2/24/2004

The coffee market opened near steady on the session but there was a lack of new selling interest from producers and both roaster buyers and fund buyers were active to drive the market sharply higher on the session. Ideas that fund traders have eased back on their hefty net long position helped support the new buying and with commercial traders in Brazil out for a holiday; the selling above the market was limited. CSCE stocks were up 4,880 bags to 4.467 million tons with 113,160 bags pending review. Solid gains in the CRB Index to near last months 15-year highs added to the positive tone.

Technical Outlook

COFFEE (MAY)2/25/04 The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The daily stochastics have crossed over up which is a bullish indication. The near-term upside objective is at 77.50.The Coffee contract should run into resistance at 76.50 and above there at 77.50 with support at 73 and 70.50. 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

2/24/2004

May sugar closed higher on the session and near the high end of a 19 point range with active trade. A surge higher in commodity prices supported solid gains in many commodity markets and may have signaled the fund traders in sugar who are holding a hefty net short position to scramble for cover. Markets such as soybeans, wheat, copper and cotton where China has moved to become a more significant importer have moved significantly higher in the past year and rumors that China is beginning to import sugar could have a significant positive impact on the market. The support in these other markets came from more than just inside of the industry as speculators and world money managers seem to be tracking the actions of China and attempting to buy commodities which China is importing and sell commodities which China is exporting.

Technical Outlook

SUGAR (MAY) 2/25/2004: The outside day up gives the market a positive tilt. The upside daily closing price reversal gives the market a bullish tilt. Market positioning is positive with the close over the 1st swing resistance. Swing resistance comes in at 6.18, with support found at 5.80. The close above the 9-day moving average is a positive short-term indicator for trend. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The near-term upside target is at 6.18. Short-term indicators suggest buying pullbacks today.

COTTON MARKET RECAP

2/24/2004

May cotton closed moderately higher for the 4th session in a row as a surge in the CRB Index and a sharp break in the dollar helped support many commodity markets; especially ones in which China is an importer. Traders are hopeful that China is a buyer of US cotton again for this weeks export sales report and a steady flow of speculative buying supported the higher close. Trade house and producer selling helped limit the gains. December cotton was down early in the session due to good moisture across the south and West Texas regions this week but a surge higher in soybeans helped support the market to a higher close. High priced soybeans and expectations that early harvested soybeans this year may hold a $1.00 or more premium to the new crop has led to ideas that cotton acreage may dip in some areas which are suited for soybeans in the delta and in the southeast.

Technical Outlook

COTTON (MAY) 2/25/2004: A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. Next resistance area comes in at 71.64 and then again at 72.12, while support is targeted at 70.69 and 70.22. 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 72.12. ORANGE JUICE (MAY)2/25/04 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 62.75 and above there at 62.90 with support at 62.45 and 62.30. The market’s short-term trend is negative as the close remains below the 9-day moving average. Momentum studies are declining, but have fallen to oversold levels. The next downside objective is now at 62.3.