Key Reversal In Wheat?
BOND MARKET RECAP
10/12/2004
December Bonds closed up 0-10 at 112-15. This was
0-03 up from the low and 0-08 off the high.
December 10 Yr Treasury Notes finished up 0-080
at 112-265, 0-050 off the high and 0-020 up from the low.
The Treasury market started out firmer and
managed to hold the gains despite better than expected scheduled information and
a moderate decline in energy prices. The Treasury market might have been
supported by the weakness in the equity market and the idea that both auto and
airline sectors remain under significant duress because of the ongoing high cost
of fuel. All three regional Fed manufacturing surveys showed an up tick and some
of the gains were quite impressive and that could have undermined the Treasuries
unless the trade assumes that the conditions going forward are going to be worse
than those seen in September.
Technical Outlook
BONDS (DEC) 10/13/2004: A bullish signal was
given with an upside crossover of the daily stochastics. 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. With the close higher than the pivot swing
number, the market is in a slightly bullish posture. The next upside objective
is 113-03. The next area of resistance is around 112-27 and 113-03, while 1st
support hits today at 112-07 and below there at 111-26.
TNOTES (DEC) 10/13/2004: The daily stochastics
have crossed over up which is a bullish indication. 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.
It is a mildly bullish indicator that the market closed over the pivot swing
number. The next upside target is 113-075. The next area of resistance is around
113-015 and 113-075, while 1st support hits today at 112-200 and below there at
112-120.
Â
STOCK INDICES RECAP
10/12/2004
December S&P finished down 3.5 at 1122.5, 2.3 off
the high and 6.5 up from the low.
December S&P E-Mini closed down 3.75 at 1122.25.
This was 6.25 up from the low and 4.5 off the high.
December Dow closed down 18 at 10068. This was 58
up from the low and 29 off the high.
December Dow E-Mini finished down 10 at 10076, 21
off the high and 67 up from the low.
The stock market started out weaker and then
mostly held at the lower levels. We would have expected some buyers to surface
in the wake of a surprised reversal in energy prices and a much better than
expected sweep of the scheduled numbers. However, we have to think that a number
of players were discouraged from entering the long side by the Intel earnings
that were due out after the close on Tuesday. The stock market had a mixed
opinion on projections from a large bond fund manager who suggested that the Fed
was poised to raise rates to 2% and then hold steady but we have to think that
some are concerned that the Fed would still be poised to hike in the face of
recent events.
Technical Outlook
S&P 500 (DEC) 10/13/2004: Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative. The swing indicator gave a moderately
negative reading with the close below the 1st support number. The next downside
target is 1112.65. The next area of resistance is around 1126.90 and 1130.25,
while 1st support hits today at 1118.10 and below there at 1112.65.
SP EMINI (DEC) 10/13/2004: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. A negative signal for trend short-term was given on a close under the
9-bar moving average. The market setup is somewhat negative with the close under
the 1st swing support. The next downside objective is 1111.07. The next area of
resistance is around 1127.62 and 1132.56, while 1st support hits today at
1116.88 and below there at 1111.07.
NASDAQ (DEC) 10/13/2004: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. A
negative signal for trend short-term was given on a close under the 9-bar moving
average. The market’s close below the pivot swing number is a mildly negative
setup. The next downside target is 1411.50. The next area of resistance is
around 1452.00 and 1459.50, while 1st support hits today at 1428.00 and below
there at 1411.50.
MINIDOW (DEC) 10/13/2004: Stochastics trending
lower at midrange will tend to reinforce a move lower especially if support
levels are taken out. The market’s close below the 9-day moving average is an
indication the short-term trend remains negative. The daily closing price
reversal down puts the market on the defensive. It is a mildly bullish indicator
that the market closed over the pivot swing number. The next downside objective
is 9977. The next area of resistance is around 10121 and 10153, while 1st
support hits today at 10033 and below there at 9977.
Â
CURRENCY MARKET RECAP
10/12/2004
December US Dollar finished up 48 at 8815, 17 off
the high and 42 up from the low.
December Euro finished down 0.96 at 123.17, 0.08
off the high and 0.3 up from the low.
December Euro Dollar closed up 0.015 at 97.73.
This was equal to the low and 0.02 off the high.
December Canadian Dollar closed down 0.35 at
79.49. This was 0.2 up from the low and 0.08 off the high.
December British Pound finished down 0.69 at
177.97, 0.43 off the high and 0.27 up from the low.
December Swiss closed down 0.49 at 79.74. This
was 0.19 up from the low and 0.06 off the high.
December Japanese Yen closed down 0.25 at 91.42.
This was 0.12 up from the low and 0.05 off the high.
The Dollar gapped aggressively upward and seemed
to catch some stop loss buying. Some traders think that the early gains were a
knee jerk reaction to talk about the Chinese currency being moved toward a
float. However, with many expecting to see the Chinese currency rise on its
eventual floatation we are a little surprised that the Dollar would actually
rise in that environment. Some traders suggested that the favorable US economy
numbers provided the lift in prices but the Dollar was significantly higher
before the numbers were released. The argument that the Dollar was boosted by
higher energy prices holds because the energy market made gains early but we are
still not sure that is a valid argument.
Technical Outlook
YEN (DEC) 10/13/2004: 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 next upside
objective is 91.57. The next area of resistance is around 91.50 and 91.57, while
1st support hits today at 91.34 and below there at 91.24.
EURO (DEC) 10/13/2004: Momentum studies trending
lower at mid-range should accelerate a move lower if support levels are taken
out. The market’s short-term trend is negative as the close remains below the
9-day moving average. The market setup is somewhat negative with the close under
the 1st swing support. The next downside target is now at 122.74. The next area
of resistance is around 123.35 and 123.49, while 1st support hits today at
122.98 and below there at 122.74.
Â
PRECIOUS METALS RECAP
10/12/2004
December Gold closed down 6.8 at 416.6. This was
2.4 up from the low and 4.5 off the high.
December Silver finished down 0.197 at 7.055,
0.145 off the high and 0.095 up from the low.
October Platinum closed down 6.1 at 842.9. This
was 3.9 up from the low and equal to the high.
All the metals came under aggressively long
liquidation Tuesday and the break seemed to be caused by a rising Dollar.
However, we also have to think that rumors regarding the Chinese currency also
provided some selling pressure to prices. It is also clear that a broad based
fund liquidation was seen in commodities and that could have impacted gold and
silver. Keep in mind, that both gold and silver were holding rather significant
spec and fund longs at the beginning of this week. With the CRB Index falling
sharply some traders suggested that inflation fears were downgraded and that
caused some longs to exit the metals.
Technical Outlook
SILVER (DEC) 10/13/2004: 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. A negative signal for trend short-term was given on a close under the
9-bar moving average. There could be some early pressure today given the
market’s negative setup with the close below the 2nd swing support. The next
downside objective is 682.8. The next area of resistance is around 717.5 and
730.8, while 1st support hits today at 693.5 and below there at 682.8.
GOLD (DEC) 10/13/2004: The daily stochastics gave
a bearish indicator with a crossover down. Momentum studies are trending lower
from high levels which should accelerate a move lower on a break below the 1st
swing support. The close below the 9-day moving average is a negative short-term
indicator for trend. The gap down on the day session chart is bearish with more
selling pressure possible today. There could be some early pressure today given
the market’s negative setup with the close below the 2nd swing support. The next
downside target is 410.3. The next area of resistance is around 420.0 and 424.0,
while 1st support hits today at 413.2 and below there at 410.3.
Â
COPPER MARKET RECAP
10/12/2004
December Copper finished down 2.05 at 144.80,
0.10 off the high and 2.50 up from the low.
Copper prices started out weak and then came
under aggressive downside liquidation. However, into the close and into the
afternoon session the market managed to reject at least half of the day’s
losses. Even in the face of a new copper deficit forecast of 710,000 metric tons
the market appeared to see wave after wave of fund selling. Some traders
suggested that the early selling was fostered by concerns that Chinese exchange
rate changes might derail the Chinese demand for copper. We also think that the
deterioration in the macro economic condition is beginning to undermine the
longer term outlook for copper and the funds were somewhat overly long.
Â
ENERGY MARKET RECAP
10/12/2004
December Crude Oil closed down 1.16 at 52.18.
This was 0.08 up from the low and 1.52 off the high.
December Heating Oil closed down 1.77 at 145.83.
This was 0.33 up from the low and 3.37 off the high.
December Unleaded Gas finished down 2.31 at
137.99, 3.01 off the high and 0.29 up from the low.
December Natural Gas finished down 0.26 at 7.90,
0.15 off the high and 0.05 up from the low.
December Propane closed down 0.00 at 0.91. This
was equal to the low and 0.02 off the high.
The crude oil ramped up to new contract high but
then fell back as if overbought. We are actually a little surprised that prices
slide back given that a number of key supply threats remained in place.
Apparently traders saw expectations of a $5 increase in the OPEC upper Banding
price as a move that would spark aggressive investment in oil exploration. We
have to wonder why the energy complex would suddenly begin to accept the
prospect of increased production potential except when one considers that at the
highs Tuesday crude oil prices were more than double the level seen on December
2nd 2003. With the market still under the assumption that GULF production is
holding significantly below full capacity the trade must be expecting another
decline in weekly inventory readings.
Technical Outlook
CRUDE OIL (DEC) 10/13/2004: The market rallied to
a new contract high. A crossover down in the daily stochastics is a bearish
signal. Stochastics turning bearish at overbought levels will tend to support
lower prices if support levels are broken. The market’s close above the 9-day
moving average suggests the short-term trend remains positive. The outside day
down is somewhat negative. The market is in a bearish position with the close
below the 2nd swing support number. The next downside objective is 50.94. With a
reading over 70, the 9-day RSI is approaching overbought levels. The next area
of resistance is around 52.98 and 54.14, while 1st support hits today at 51.38
and below there at 50.94.
UNLEADED (DEC) 10/13/2004: The rally brought the
market to a new contract high. The daily stochastics have crossed over down
which is a bearish indication. Momentum studies are trending lower from high
levels which should accelerate a move lower on a break below the 1st swing
support. The close above the 9-day moving average is a positive short-term
indicator for trend. A negative signal was given by the outside day down. The
market is in a bearish position with the close below the 2nd swing support
number. The next downside objective is 135.37. The next area of resistance is
around 139.64 and 141.97, while 1st support hits today at 136.34 and below there
at 135.37.
HEATING OIL (DEC) 10/13/2004: A new contract high
was made on the rally. A bearish signal was triggered on a crossover down in the
daily stochastics. Momentum studies are trending lower from high levels which
should accelerate a move lower on a break below the 1st swing support. The
market’s short-term trend is positive on the close above the 9-day moving
average. The daily closing price reversal down puts the market on the defensive.
The swing indicator gave a moderately negative reading with the close below the
1st support number. The next downside target is 142.89. With a reading over 70,
the 9-day RSI is approaching overbought levels. The next area of resistance is
around 147.67 and 150.29, while 1st support hits today at 143.98 and below there
at 142.89.
Â
CORN MARKET RECAP
10/12/2004
December Corn finished down 2 1/4 at 202
1/2, 2 off the high and 5 1/2 up from the low. March Corn closed down 2 at 213
1/4. This was 4 3/4 up from the low and 1 3/4 off the high.
While closing lower on the session, the market
has the appearance of a spike low as December corn closed 5 1/2 cents above the
lows of the day and also above the opening. The USDA pegged corn production at
11.613 billion bushels as compared with the average trade estimate at 11.217
billion bushels (range 11.059-11.375) and compared with the September estimate
of 10.961 billion bushels. The USDA pegged corn ending stocks at 1.691 billion
bushels as compared with the average trade estimate at 1.468 billion bushels
(range 1.310-1.623) and compared with the September estimate of 1.209 billion
bushels. Both production and ending stocks came in above the range of estimates
and with an extremely bearish tilt. World corn ending stocks are now pegged at
100.68 million tons from 87.9 million last month and 94.7 million tons last
year. Weekly export inspections came in at 34.7 million bushels as compared with
trade expectations at 29-34 million bushels. In order to reach the USDA
projection for the year, weekly shipments need to average 41.0 million bushels.
Wheat/corn spread activity and speculative selling helped pressure the market
early but talk that the corn market was building a huge demand base helped to
provide some underlying support. Support for December corn comes in at 199 and
197 with 202 1/2 and 204 1/2 as resistance.
Technical Outlook
CORN (DEC) 10/13/2004: The market made a new
contract low on the break. Rising from oversold levels, daily momentum studies
would support higher prices, especially on a close above resistance. The
market’s close below the 9-day moving average is an indication the short-term
trend remains negative. The market is in a bearish position with the close below
the 2nd swing support number. The near-term upside objective is at 209. The
market is approaching oversold levels on an RSI reading under 30. The next area
of resistance is around 206 1/4 and 209, while 1st support hits today at 198 3/4
and below there at 194 1/4.
Â
SOY COMPLEX RECAP
10/12/2004
November Soybeans finished down 26 at 513, 4 off
the high and 7 up from the low. January Soybeans closed down 26 at 521 3/4. This
was 7 1/4 up from the low and 2 1/4 off the high.
December Soymeal closed down 7.9 at 155.4. This
was 2.0 up from the low and 1.1 off the high.
December Soybean Oil finished down 0.97 at 19.98,
0.21 off the high and 0.18 up from the low.
A surge of 20.66 million tons in world ending
stocks for the coming season to a new all-time record high seemed to be the
biggest longer-term concern for the soybean market. The USDA pegged soybean
production at 3.107 billion bushels as compared with the average trade estimate
at 3.026 billion bushels and a range of 2.941-3.21 billion bushels. This
compares with the September USDA estimate of 2.836 billion bushels. The USDA
pegged ending stocks at 405 million bushels as compared with the average trade
estimate at 342 million bushels (range 205-450) and the September USDA estimate
of 190 million bushels. The news is bearish against expectations and corn
numbers were outside of the range of estimates which adds to the bearishness.
World ending stocks are pegged at 59.25 million tons from 51.54 projected last
month and from 38.59 million tons last year. Brazil production was revised lower
by 1.5 million tons to 64.5 million. Traders look for this afternoon’s weekly
crop progress report to show the crop near 50-55% harvested, up from 36% last
week. Oil deliveries came in at 976 lots against the October futures. Weekly
export inspections came in at 18.08 million bushels as compared with trade
expectations at 21-26 million bushels. In order to reach the USDA projection for
the year, weekly shipments need to average 20.0 million bushels. Traders have
compared this summer to 1994 as far as near perfect weather for high yielding
crops. While corn yields are projected to exceed the 1994 yield by 14.3%, the
USDA yield estimate today is just 2.4% over the 1994 yield. November soybean
resistance comes in at 516 and 519 with 500 1/2 and 496 as next support.
Technical Outlook
BEANS (NOV) 10/13/2004: Daily stochastics are
showing positive momentum from oversold levels, which should reinforce a move
higher if near-term resistance is taken out. The market’s short-term trend is
negative as the close remains below the 9-day moving average. More selling
pressure is likely given yesterday’s gap lower price action on the day session
chart. The defensive setup, with the close under the 2nd swing support, could
cause some early weakness. The near-term upside target is at 523 1/4. The next
area of resistance is around 518 1/2 and 523 1/4, while 1st support hits today
at 507 1/2 and below there at 501 1/4.
MEAL (DEC) 10/13/2004: 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. The gap lower on the day session chart
is bearish and puts the market on the defensive. There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. The near-term upside target is at 158.2. The next area of
resistance is around 156.9 and 158.2, while 1st support hits today at 153.9 and
below there at 152.1.
BEANOIL (DEC) 10/13/2004: A crossover down in the
daily stochastics is a bearish signal. 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. More selling pressure is likely given yesterday’s gap
lower price action on the day session chart. The close below the 2nd swing
support number puts the market on the defensive. The next downside target is now
at 19.60. The market is approaching oversold levels on an RSI reading under 30.
The next area of resistance is around 20.17 and 20.37, while 1st support hits
today at 19.79 and below there at 19.60.
Â
WHEAT MARKET RECAP
10/12/2004
December Wheat finished up 8 at 311, 1/2 off the high and 14
up from the low. March Wheat closed up 6 3/4 at 321 3/4. This was 13 1/4 up from
the low and 1/4 off the high.
The sweeping key reversal from a contract low
with the market closing above the range of the past 7 trading sessions is a
bullish technical development and could attract significant technical
follow-through buying on Wednesday. The USDA pegged ending stocks for wheat at
569 million bushels as compared with the average trade estimate at 593 million
bushels (range 549-620) and compared with the September estimate of 578 million
bushels. World ending stocks are now pegged at 141.5 million tons from 142.3
last month and 130.9 million tons last year. While the wheat numbers were
neutral to bullish, bearish numbers for the other grains triggered increased
selling pressures early in the session but the selling dried up quickly. Weekly
export inspections came in at 20.6 million bushels as compared with trade
expectations at 21-26 million bushels. In order to reach the USDA projection for
the year, weekly shipments need to average 15.7 million bushels. The decline in
US and world ending stocks from last months forecast is a bullish development
for the wheat market and the strong close in spite of a sharp break in the other
grains is also seen as a positive development. December wheat support comes in
at 305 and 300 with 314, 319 1/4 and 324 1/2 as resistance.
Technical Outlook
WHEAT (DEC) 10/13/2004: The sell-off took the
market to a new contract low. The daily stochastics have crossed over up which
is a bullish indication. Daily stochastics are showing positive momentum from
oversold levels, which should reinforce a move higher if near-term resistance is
taken out. A positive signal for trend short-term was given on a close over the
9-bar moving average. The outside day up is a positive signal. There could be
more upside follow through since the market closed above the 2nd swing
resistance. The near-term upside target is at 322. The next area of resistance
is around 318 1/4 and 322, while 1st support hits today at 303 3/4 and below
there at 293 1/4.
Â
LIVE CATTLE RECAP
10/12/2004
December Live Cattle closed up 0.05 at 88.72.
This was 0.07 up from the low and 0.75 off the high.
November Feeder Cattle finished up 1.00 at
113.00, 0.50 off the high and 0.25 up from the low.
December cattle closed 5 points higher on the
session but down 75 points from the highs of the day as the early strong gains
failed to generate new buying interest. The market came close to the September
highs before the late sell-off which was led by a limit-down move in hogs and
weakness in other grain markets. Talk of a firm cash market tone for this week
and higher beef prices helped support the early gains. Boxed-beef cutout values
(600-750 choice) were up $1.07 on the day at mid-session to $136.17 as compared
with $133.89 last week at this time. Traders were looking for slaughter for
Monday to come in near 118,000-122,000 head and 124,000-127,000 head for
Tuesday. Slaughter was 113,000 head on Monday and 125,000 head today.
Technical Outlook
CATTLE (DEC) 10/13/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. 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. The near-term upside target is at 89.700. The next area of
resistance is around 89.120 and 89.700, while 1st support hits today at 88.320
and below there at 88.070.
Â
LEAN HOGS RECAP
10/12/2004
December Lean Hogs closed down 2.00 at 64.30.
This was equal to the low and 1.70 off the high.
February Pork Bellies finished down 1.30 at
94.20, 2.00 off the high and 0.15 up from the low.
The December hogs closed limit-down with other
months sharply lower as speculative long liquidation selling seemed to intensify
late in the session. Continued weakness in cash hog markets and fears that the
trend will continue well into November and early December helped to pressure the
market. The weak technical action added to the bearish tone. Traders are
concerned that the cash market fell during a period of packer-reduced slaughter
and if demand remains slow, and corn prices cheap, there is a concern that
weights will jump as well. The CME 2-Day Lean Index for the period ending
October 8th was reported at 75.80 which was down $1.21 from the previous
session. Traders were looking for slaughter for Monday to come in near
382,000-392,000 head and for Tuesday at 390,000-400,000 head. Monday slaughter
was 395,000 head with 399,000 head on Tuesday.
Technical Outlook
HOGS (DEC) 10/13/2004: The close under the 40-day
moving average indicates the longer-term trend could be turning down. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative. The gap lower on the day session chart is
bearish and puts the market on the defensive. The market is in a bearish
position with the close below the 2nd swing support number. The next downside
target is now at 63.020. The next area of resistance is around 65.120 and
66.400, while 1st support hits today at 63.450 and below there at 63.020.
Â
COCOA MARKET RECAP
10/12/2004
December Cocoa finished down 20 at 1440, 19 off
the high and 14 up from the low.
The cocoa market finished lower and would seem to
have lost the recent positive buzz. We have to think that the market is
attempting to get a firmer fundamental low under prices but it is a little
surprising that the good German demand readings didn’t provide more positive
dialogue. Therefore, the market doesn’t seem to be pent up for the European
grind figures due out on Wednesday. The trade expects the European grind to be
up 2%-4% and that would not seem to be a difficult figure to come by. However,
origin selling and fears of the impending harvest is keeping buyers on the
sidelines.
Technical Outlook
COCOA (DEC) 10/13/2004: The stochastic indicator
is rising from oversold levels, which is bullish and should support higher
prices. 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 1474. The
next area of resistance is around 1456 and 1474, while 1st support hits today at
1424 and below there at 1409.
Â
COFFEE MARKET RECAP
10/12/2004
December Coffee closed down 1.35 at 74.50. This
was equal to the low and 2.05 off the high.
The outside day down and lowest close since
September 10th keeps the near-term tone bearish with speculative long
liquidation selling noted in the past few weeks. The weekend COT report showed
an overbought condition and more news of hefty rains in Brazil added to the
bearish tone. Improving crop conditions have caused the market to take away
almost all of the weather premium established on the September run-up. The
Vietnam crop is expected to be sharply higher than last year with the harvest
set to begin in early November. NYBOT daily warehouse stocks were down 4,326
bags to 4.852 million bags with 49,049 bags pending review. The monthly report
on Green coffee stocks in the US will be released on Friday.
Technical Outlook
COFFEE (DEC) 10/13/2004: Momentum studies are
still bearish but are now at oversold levels and will tend to support reversal
action if it occurs. A negative signal for trend short-term was given on a close
under the 9-bar moving average. The outside day down and close below the
previous day’s low is a negative signal. The market’s close below the 1st swing
support number suggests a moderately negative setup for today. The next downside
target is now at 73.00. The next area of resistance is around 75.50 and 77.05,
while 1st support hits today at 73.50 and below there at 73.00.
Â
SUGAR MARKET RECAP
10/12/2004
March Sugar closed up 0.05 at 9.32. This was 0.07
up from the low and 0.05 off the high.
March sugar closed 5 higher on the session and
into new contract highs but the trade is a little nervous with the oversold
condition of the market and the close which was below the opening. In addition,
the trade was concerned that after some early fund and trade house buying from
end users who were forced to pay-up, the buying slowed to a crawl as the market
absorbed news of a jump of 12,612 contracts for the open interest on Monday. In
the USDA Supply/demand report, the production for 2004/2005 was revised slightly
higher but a revision in beginning stocks caused ending stock forecasts to drop
to 2.198 million tons from 2.229 million as last months forecast and 20.8
million tons for this year. Stocks usage estimate is now 21.8% from 22.1% last
month, 20.8% last year and 16.6% two years ago. Japan raw sugar imports in
August came in at 121,977 tonnes from 127,794 in July and 198,750 tonnes last
year.
Technical Outlook
SUGAR (MAR) 10/13/2004: A new contract high was
made on the rally. 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. With the close higher than the pivot swing number, the
market is in a slightly bullish posture. The next upside target is 9.43. The
9-day RSI over 70 indicates the market is approaching overbought levels. The
next area of resistance is around 9.38 and 9.43, while 1st support hits today at
9.26 and below there at 9.20.
Â
COTTON MARKET RECAP
10/12/2004
December Cotton finished down 1.73 at 44.79, 0.71
off the high and 1.04 up from the low.
The December contract came close to limit-down
before finding a slowdown in selling and a minor recovery bounce into the close.
December cotton, however, did close 173 lower on the day but the close was
slightly above the opening. The USDA pegged cotton production at a whopping
21.54 million bales as compared with the average trade estimate at 20.3 million
bales and a range of 20.0-20.50 million bales. This compares with the September
USDA estimate of 20.9 million bushels. The USDA pegged ending stocks at 6.7
million bales as compared with 3.51 million last year and 5.38 million two years
ago. The news is bearish against expectations and the USDA numbers were well
outside the range of estimates. World ending stocks are pegged at 41.95 million
bales from 40.03 million projected last month and from 33.48 million bales last
year.
Technical Outlook
COTTON (DEC) 10/13/2004: Momentum studies are
still bearish but are now at oversold levels and will tend to support reversal
action if it occurs. A negative signal for trend short-term was given on a close
under the 9-bar moving average. More selling pressure is likely given
yesterday’s gap lower price action on the day session chart. The close below the
2nd swing support number puts the market on the defensive. The next downside
objective is 42.96. The next area of resistance is around 45.66 and 46.45, while
1st support hits today at 43.92 and below there at 42.96.