How The News From China Will Impact Copper Prices

The market found outside influences as bearish
but with a significant part of the crop in the northwest still not harvested,
rains for Friday and a wet forecast for next week could provide underlying
support. Weekly export sales came in at 1.09 million tons as compared with trade
expectations at 1.1 to 1.4 million tons and 838,700 tons necessary each week to
reach the USDA projection. Cumulative sales have reached 28.6% of the USDA
forecast for the year as compared with 30.2% on average for this time of the
year. While South Korea has been an active buyer of optional origin corn this
week which looks like the sales could go to the US, there have also been reports
of a sale of 20,000 tons and 15,000 tons to South Korea from China. Iowa and
Minnesota harvest progress could be slow into next week. The International Grain
Council raised their forecast for world coarse grain production to a record high
987.2 million tonnes from 962.7 million last month and 914.1 million tonnes last
year. World ending stocks for the 2004/2005 season were pegged at 156 million
tonnes from 136 million tonnes last year. Support for December corn comes in at
204 and 202 with 207 1/4 and 209 1/2 as resistance.

Technical Outlook

CORN (DEC) 10/29/2004: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The market’s
close above the 9-day moving average suggests the short-term trend remains
positive. The market’s close below the pivot swing number is a mildly negative
setup. The near-term upside target is at 208 1/4. The next area of resistance is
around 207 1/4 and 208 1/4, while 1st support hits today at 205 1/4 and below
there at 204 1/4.

 

SOY COMPLEX RECAP

10/28/2004

November Soybeans finished down 1/2 at 529 1/2, 4
1/2 off the high and 2 1/2 up from the low. January Soybeans closed up 1 3/4 at
535 1/2. This was 4 1/2 up from the low and 2 1/2 off the high.

December Soymeal closed up 0.1 at 155.4. This was
0.8 up from the low and 1.1 off the high.

December Soybean Oil finished up 0.28 at 21.49,
0.03 off the high and 0.29 up from the low.

While traders expected lower price action due to
the move by China officials to raise interest rates and slow their economy, the
market lacked the selling interest to follow-through to the downside from
Wednesday’s break and the speculative short-covering emerged to support a bounce
into the mid-session. However, fears of China cancellations of previously booked
US soybeans, talk of high deliveries against the November contract next week and
ideas that a slower import pace from China could shift some demand to South
America into the spring helped pressure. Weekly export sales came in at 925,400
tons for soybeans as compared with trade expectations at 900,000-1.1 million
tons and 348,000 tons necessary each week to reach the USDA projection.
Cumulative sales have reached 44% of the USDA forecast for the year as compared
with 43.4% on average for this time of the year. China was the best buyer at
463,200 tons. Weekly export sales for meal were 182,900 tons as compared with
trade expectations at 150,000-200,000 tons and 55,400 tons necessary each week
to reach the USDA projection. Cumulative sales have reached 44.4% of the USDA
forecast for the year as compared with 33.6% on average for this time of the
year. Oil sales were 12,300 tons. Census crush for September came in at 120.708
million bushels which was slightly below expectations. Meal stocks were below
expectations at 212,294 tons and oil stocks were pegged at 1.057 billion pounds,
also in line with expectations. January soybean resistance comes in at 537 3/4
and 539 3/4 with support at 530 1/2 and 526 1/2.

Technical Outlook

BEANS (NOV) 10/29/2004: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The market’s short-term trend is negative as the close
remains below the 9-day moving average. It is a slightly negative indicator that
the close was lower than the pivot swing number. The near-term upside target is
at 537. The next area of resistance is around 533 and 537, while 1st support
hits today at 526 and below there at 523.

MEAL (DEC) 10/29/2004: The upside crossover of
the 9 & 18 bar moving average is a positive signal. Negative momentum studies in
the neutral zone will tend to reinforce lower price action. The close below the
9-day moving average is a negative short-term indicator for trend. It is a
slightly negative indicator that the close was under the swing pivot. The next
downside objective is now at 153.6. The next area of resistance is around 156.3
and 157.3, while 1st support hits today at 154.5 and below there at 153.6.

BEANOIL (DEC) 10/29/2004: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The close above the 9-day moving average is a positive short-term
indicator for trend. The market has a slightly positive tilt with the close over
the swing pivot. The near-term upside target is at 21.74. The next area of
resistance is around 21.65 and 21.74, while 1st support hits today at 21.33 and
below there at 21.11.

 

WHEAT MARKET RECAP

10/28/2004

December Wheat finished up 3 at 322 1/4, 1 3/4 off the high
and 4 1/4 up from the low. March Wheat closed up 3 1/2 at 333 1/2. This was 5
1/2 up from the low and 1 off the high.

Continued fund buying helped support another
positive day with December wheat moving to the highest level since September
28th. The market pushed lower on the opening as general China fears helped
pressure many commodity markets. Earlier this year when China officials tried to
slow their economy, many commodity markets fell sharply. Weekly export sales
came in at 430,700 tons for wheat as compared with trade expectations at
300,000-400,000 tons and 324,800 tons necessary each week to reach the USDA
projection. Japan, Philippines and Egypt were the best buyers. Cumulative sales
have reached 61% of the USDA forecast for the year as compared with 50.3% on
average for this time of the year. Talk of dry weather conditions in Western
Australia and hopes for further export business from Pakistan helped support.
The International Grain Council raised their forecast for world wheat production
for the 5th month in a row to 616.9 million tonnes from 614.7 million last month
and 554 million tonnes last year. World ending stocks for the 2004/2005 season
were left unchanged from last month at 138 million tonnes from 126 million
tonnes last year. Basis was firm due to tight producer holding. December wheat
support moves up to 318 and 312 with resistance at 324 1/4 and 331.

Technical Outlook

WHEAT (DEC) 10/29/2004: Rising stochastics at
overbought levels warrant some caution for bulls. The market’s short-term trend
is positive on the close above the 9-day moving average. The market setup is
supportive for early gains with the close over the 1st swing resistance. The
near-term upside target is at 327 1/2. The next area of resistance is around 325
1/4 and 327 1/2, while 1st support hits today at 319 1/4 and below there at 315
3/4.

 

LIVE CATTLE RECAP

10/28/2004

December Live Cattle closed down 0.37 at 86.25.
This was 0.35 up from the low and 0.55 off the high.

November Feeder Cattle finished down 0.15 at
111.45, 0.45 off the high and 0.35 up from the low.

The market collapsed under the weight of
continued fund long liquidation selling as the poor action in the beef market
this week helped trigger a weaker tone for cash cattle. In addition, lower beef
prices helped confirm suspicions that beef demand might have put in a temporary
peak as retailer interest shifts to poultry and hams for the Thanksgiving
holiday. Excess supplies of heavy weight, market-ready cattle from feedlots
added to the bearish tone. Boxed-beef prices were up down 98 cents to $141.56 at
mid-session as compared with $142.96 last week at this time.

Technical Outlook

CATTLE (DEC) 10/29/2004: Momentum studies are
still bearish but are now at oversold levels and will tend to support reversal
action if it occurs. The market’s short-term trend is negative as the close
remains below the 9-day moving average. It is a slightly negative indicator that
the close was lower than the pivot swing number. The next downside target is now
at 85.420. The next area of resistance is around 86.670 and 87.170, while 1st
support hits today at 85.820 and below there at 85.420.

 

LEAN HOGS RECAP

10/28/2004

December Lean Hogs closed up 0.50 at 66.35. This
was 0.35 up from the low and 0.25 off the high.

February Pork Bellies finished up 0.67 at 94.72,
0.02 off the high and 0.82 up from the low.

A steady tone for live cash hog markets was
enough to support significant short-covering and a 75 point burst in December
hogs as the discount of futures to the cash market was enough to discourage the
shorts. The CME 2-Day Lean Index for the period ending October 26th was reported
at 70.92, up 35 cents from the previous session and up from 69.89 the previous
week. This helped support December hogs under 66.00 as higher pork cut-out
values from Wednesday afternoon added to the positive tone. Gains were trimmed
by weakness in cattle and fears of hefty total meat production in the weeks just
ahead.

Technical Outlook

HOGS (DEC) 10/29/2004: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. The market setup is supportive for early
gains with the close over the 1st swing resistance. The next upside target is
66.900. The next area of resistance is around 66.620 and 66.900, while 1st
support hits today at 66.050 and below there at 65.750.

 

COCOA MARKET RECAP

10/28/2004

December Cocoa finished up 15 at 1485, 15 off the
high and 4 up from the low.

A series of gap up trades in the cocoa certainly
highlight a growing threat of violence at the Ivory Coast. Supposedly the rebels
are declaring a state of emergency because the Ivory Coast government is
amassing troops in the North. After some French troops were shot at we can
understand a military show but the rebels claim the government is set to attack.
Also supporting prices were reports of low quality beans coming from some
regions of the Ivory Coast. In yet another story out Thursday morning, the Press
also reported rain damage of cocoa.

Technical Outlook

COCOA (DEC) 10/29/2004: Momentum studies are
trending higher but have entered overbought levels. The market’s short-term
trend is positive on the close above the 9-day moving average. If yesterday’s
gap higher on the day session chart holds, additional buying could develop this
session. There could be more upside follow through since the market closed above
the 2nd swing resistance. The next upside objective is 1506. The next area of
resistance is around 1494 and 1506, while 1st support hits today at 1476 and
below there at 1469.

 

COFFEE MARKET RECAP

10/28/2004

December Coffee closed down 0.20 at 77.70. This
was 0.35 up from the low and 1.15 off the high.

The coffee market closed slightly lower in
choppy, two-sided trade as a more positive tone in coffee was offset by weakness
in a wide range of commodity markets due to fears of a slowdown in the China
economy. Rains in Brazil this month have failed to provide much selling
pressures. The sharp break in sugar and gold failed to attract much selling in
coffee as fund traders seem to be unwinding short position and considering a
long stance in coffee. The US imported 1.862 million bags in August vs. 1.832
million last year. The 8 month total for 2004 reached 15.612 million bags, up
.44% from last years pace.

Technical Outlook

COFFEE (DEC) 10/29/2004: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
close above the 9-day moving average is a positive short-term indicator for
trend. The market tilt is slightly negative with the close under the pivot. The
near-term upside target is at 79.40. The next area of resistance is around 78.45
and 79.40, while 1st support hits today at 77.00 and below there at 76.45.

 

SUGAR MARKET RECAP

10/28/2004

March Sugar closed down 0.20 at 8.56. This was
0.01 up from the low and 0.22 off the high.

March sugar collapsed to the lowest level since
September 22nd as speculative long liquidation selling seems to have intensified
at the end of the month. India has been quiet on the raw market and traders are
beginning to be concerned that India will hold off for lower raw sugar prices
and if they don’t get the price they need then they will buy processed white
sugar to import next year. Speculators are coming off of a record high net long
position so the market does not need much in the way of bearish news to attract
selling. Brazil exported 1.3 million tons of sugar from the main port at Santos
in September, up 39% from last years pace which brought the 2004 9-month total
to 7.97 million tons, up 36% from last year. Cane ethanol exports for the first
9 months of 2004 have totaled 699,218 tonnes, up 258% from last year.

Technical Outlook

SUGAR (MAR) 10/29/2004: Momentum studies are
declining, but have fallen to oversold levels. The market’s close below the
9-day moving average is an indication the short-term trend remains negative. The
defensive setup, with the close under the 2nd swing support, could cause some
early weakness. The next downside target is 8.39. The next area of resistance is
around 8.67 and 8.84, while 1st support hits today at 8.45 and below there at
8.39.

 

COTTON MARKET RECAP

10/28/2004

December Cotton finished down 1.52 at 45.31, 1.09
off the high and 0.31 up from the low.

The cotton market collapsed and fell to the
lowest level since October 13th as weak exports and fears of a slowing economy
from China helped turn the market lower. China officials raised interest rates
in an attempt to slow the economy which might impact buying patterns and could
slow cotton import activity. Weekly export sales came in at just 72,500 bales as
compared with trade expectations at 130,000-160,000 bales and 131,000 bales
necessary each week to reach the USDA projection. China and Turkey were the best
buyers. Cumulative sales have reached 52.3% of the USDA forecast for the year as
compared with 53.4% on average for this time of the year. Shipments were 105,400
bales from expectations at 90,000-120,000 bales.

Technical Outlook

COTTON (DEC) 10/29/2004: The daily stochastics
gave a bearish indicator with a crossover down. Negative momentum studies in the
neutral zone will tend to reinforce lower price action. 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. The market is in a bearish position with the close below the 2nd swing
support number. The next downside objective is now at 44.11. The next area of
resistance is around 46.01 and 46.90, while 1st support hits today at 44.61 and
below there at 44.11.