Lifted Ban Boosts Cattle

Technical Outlook

BONDS (MAR) 3/5/2004: The market setup is supportive for early gains with the close over the 1st swing resistance. Near-term resistance for bonds is at 113.28 and then again at 114.05, while swing support hits at 113.00 and below there at 112.13. A positive signal for trend short-term was given on a close over the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 112.13.

T-NOTES(MAR) Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The next downside objective is now at 114.15. 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 115.12 and then again at 115.17, while swing support hits at 114.27 and below there at 114.15. The market’s short-term trend is positive on a close above the 9-day moving average.

STOCK INDICES RECAP

3/4/2004

While market sentiment remains generally bullish, stocks have been confined to a narrow range all week as the market waits on the critical Feb employment data. A strong payroll number Friday will confirm a recovery in jobs and could be the catalyst that finally drives March S&P through resistance at 1158.70.

Technical Outlook

S&P500 (MAR) 3/5/2004: The close over the pivot swing is a somewhat positive setup. Underlying support comes in at 1151.70 and 1147.75, with overhead resistance at 1157.30 and 1158.95. 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 objective is at 1158.95.

S&P E-Mini (MAR): A new contract high was made on the rally. Studies are showing positive momentum, but are now in overbought territory so some caution is warranted. The next upside target is 1159.38. With the close higher than the pivot swing number, the market is in a slightly bullish posture. Near-term resistance for the S&P Mini is at 1157.50 and then again at 1159.38, while swing support hits at 1151.50 and below there at 1147.38. The market’s close above the 9-day moving average suggests the short-term trend remains positive.

NASDAQ (MAR) A positive signal for trend short-term was given on a close over the 9-bar moving average. The market setup is supportive for early gains with the close over the 1st swing resistance. The market should run into resistance at 1486.00 and above there at 1493.00 with support at 1468.00 and 1457.00. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 1457.00.

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 10598 and above there at 10626 with support at 10550 and 10530. 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 10530. It is a slightly negative indicator that the close was under the swing pivot.

CURRENCY MARKET RECAP

3/4/2004

The Dollar was in a holding pattern Thursday as the currency markets wait for the all important Feb employment number to either confirm or deny a recovery in US jobs. Confirmation of US jobs growth should drive March futures through 90 and solidify ideas that the Dollar has bottomed and that US rates are headed up. The ECB left rates unchanged with no plans to lower rates, but this did little to support the Euro. BOJ intervention continued to push the Yen lower and technical indicators have now fallen to single digits.

Technical Outlook

YEN (MAR): A negative signal for trend short-term was given on a close under the 9-bar 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. Swing resistance is targeted at 90.30 and above there at 90.64, with the yen finding support around 89.81 and below there at 89.66. 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 89.66. The market is approaching over sold levels on an RSI reading under 30.

EURO (MAR): Momentum studies are still bearish, but are now at oversold levels and will tend to support reversal action if it occurs. The next downside target is now at 1.2086. The defensive setup, with the close under the 2nd swing support, could cause some early weakness. Swing support for the Euro comes in at 1.2086, with overhead resistance at 1.2290. The close below the 9-day moving average is a negative short-term indicator for trend. The close below the 40-day moving average is an indication the longer-term trend is down. Some caution in pressing the downside is warranted with the RSI under 30. More selling pressure is likely given yesterday’s gap lower price action on the day session chart.

PRECIOUS METALS RECAP

3/4/2004

Metals traded mostly sideways as market direction has been tied very closely to movements in the Dollar, which had a very quiet session Thursday. More volatility is in store Friday as the release of the Feb employment data has the potential of driving the Dollar sharply in either direction. While it could be a win/win situation for silver, considered an industrial metal, gold will need to see s decisive break in the Dollar to stage a rally back over $400.

Technical Outlook

SILVER (MAY): The market has a slightly positive tilt with the close over the swing pivot. Initial support for silver is at 670.1 and below there at 663.8 with resistance likely at 678.6 and 683.6. A positive signal for trend short-term was given on a close over the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 663.8.

GOLD (APR): Support for gold today comes in near 389.83, while resistance is pegged at 396.83. Momentum studies are still bearish, but are now at oversold levels and will tend to support reversal action if it occurs. The next downside target is now at 389.83. The close over the pivot swing is a somewhat positive setup. The close below the 9-day moving average is a negative short-term indicator for trend.

COPPER MARKET RECAP

3/4/2004

The avalanche of fund selling seemed to have dried up on Thursday allowing May copper to recover some of its losses. While technically the market appears to have topped, the fact that physical supplies are becoming extremely tight makes it hard to say that the market won’t retest the highs. Reports that some major copper mines are going to be expanding production had little impact on prices as new production takes a long time to actually hit the market. Friday’s employment data could rally copper if strong, but improving economic strength would also mean a stronger dollar,which could limit the metal’s gains.

ENERGY MARKET RECAP

3/4/2004

Supply concerns continue to grip the energy markets and it would seem that Wednesday’s massive sell off did little to shake the confidence of long-time bulls. Despite comments from OPEC’s President that the cartel would tolerate over production by its members to help soften high world energy prices, there seems to be a growing concern that member countries will be cutting production April 1st. OPEC meets March 31st to discuss production. The supply/demand balance in the US is so fragile that any inkling of tightening supplies will drive energy prices higher.

Technical Outlook

CRUDE OIL (APR): Market positioning is positive with the close over the 1st swing resistance. Support for crude is keyed on 36.09 and below there at 35.37, with resistance pegged at 37.19 and 37.57. The close above the 9-day moving average is a positive short-term indicator for trend. Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The next downside target is now at 35.37.

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 106.67. The market has a slightly positive tilt with the close over the swing pivot. Resistance today is at 113.17, while support should be found around 106.67. 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):Market positioning is positive with the close over the 1st swing resistance. Heating oil should encounter support around 88.28, with resistance is at 95.28. The close above the 9-day moving average is a positive short-term indicator for trend. The cross over and close above the 40-day moving average is an indication the longer-term trend is up. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The next downside target is now at 88.28.

CORN MARKET RECAP

3/4/2004

The market closed slightly lower in choppy, two-sided trade. December stayed inside of yesterday’s range. Weakness in the soybean complex and slower than expected export sales helped to trigger the selling shortly after the higher opening. Funds were noted sellers of near 3500-4000 contracts. Weekly export sales came in at 404,900 tons as compared with trade expectations of 700,000-900,000 tons and 672,300 tons necessary each week to reach the USDA projection. This was a new marketing year low for weekly sales and compares with average sales of the past 4 weeks of 1.018 million tons. Cumulative export sales have reached 64.6% of the USDA forecast for the season as compared with 61.8% on average for this time of the year. The strong dollar and recent higher prices were seen as factors which discouraged new sales. Deliveries against the March remained at a hefty level this morning at 996 contracts. CBOT corn registrations were unchanged at 1187 contracts. While the export numbers were weak, the trade found some support from news of sales and shipments to South Korea which helps confirm the absence of China as a key exporter.

Technical Outlook

CORN (MAY) 3/5/2004: 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 292 1/4. It is a slightly negative indicator that the close was under the swing pivot. Market resistance comes in at 301 1/4 today, with support at 292 1/4. The close below the 9-day moving average is a negative short-term indicator for trend.

SOY COMPLEX RECAP

3/4/2004

The market came close to yesterdays lows on the late break but managed to hold support to bounce 10 cents off of the lows into the close. Funds were noted as sellers of near 3500 contracts but avoided the stops under 924 for the May futures helped support the late bounce. Weak sales news helped to pressure the market just after the opening. Weekly export sales came in at a negative (cancellations) of 27,100 tons as compared with trade expectations of -75,000 to +200,000 tons. China was noted as a net decrease in sales of 142,900 tons. Meal sales were negative 3400 tons and oil sales were negative 2100 tons; both below the range of expectations. Cumulative export sales for soybeans have reached 92.9% of the USDA forecast for the season as compared with 83% on average for this time of the year. Cumulative export sales for meal have reached 78.8% of the USDA forecast for the season as compared with 66.1% on average for this time of the year. The Brazil government released a new estimate for the crop at 58.95 million tons which is well above recent trade estimates but since the survey for this estimate was done in January, traders did not believe this would be a factor. Weather concerns for Brazil harvest due to too much rain in the forecast into early next week and talk of better demand from China supported the market in overnight trade but reports of weak crush margins in China and the poor sales news has triggered some long liquidation selling this morning. The US Census Bureau revised their January stocks oil estimate to 1.941 billion pounds from 1.917 billion from their monthly report release on February 27th and this news helped pressure the oil futures early. Traders remain concerned that speculators will liquidate long positions if the market experiences a move under yesterday’s lows at 924 for May soybeans. Short-term resistance is pegged at 943 3/4 and 949 1/2. Cash basis levels were said to be down as much as 6 cents at some locations as cash dealers reacted to news of further cancellations of US soybeans from China.

Technical Outlook

SOYBEANS (MAY) 03/05/04 The market tilt is slightly negative with the close under the pivot. The next area of resistance is around 946 1/2 and 956 1/4, while 1st support hits today at 926 1/2 and below there at 916 1/4. The market’s close on the 9-day moving average is neutral. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The next downside objective is 916 1/4.

MEAL (MAY): Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The next downside target is now at 279.2. The daily closing price reversal down is a negative indicator for prices. First resistance comes in at 286.6, with support at 281.9. The close above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is a somewhat positive setup.

BEAN OIL (MAY): A negative signal for trend short-term was given on a close under the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 32.06. The swing indicator gave a moderately negative reading with the close below the 1st support number. Daily swing resistance is found at 33.22 and above there at 33.76. Support should be encountered at 32.37 and 32.06. Short-term indicators on the defensive. Consider selling an intraday bounce.

WHEAT MARKET RECAP

3/4/2004

Speculative selling slowed on the test of the February lows and the market managed a late rally to close higher on the session. May wheat was down more than 32 cents off of the February 23rd highs before the turn around. Bullish news in the USDA weekly sales report, solid daily export interest from South Korea and Japan and news the China could be a more significant importer of new crop wheat than previously believed helped support. Weekly export sales came in at 1.012 million tons as compared with trade expectations of 650,000-1.0 million tons with China a noted buyer of 190,000 tons of old crop wheat and 415,000 tons for new crop. Cumulative export sales for the old crop season have reached 87.3% of the USDA forecast for the season as compared with 80.1% on average for this time of the year. Japan bought 81,000 tons of US wheat at their weekly tender and South Korea issued three separate tenders totaling 65,200 tons for US wheat overnight. Weakness in the other grains and rains across the plains in the US helped to trigger long liquidation selling early but the oversold condition of the market and short-covering helped support. Ukraine grain production this season is expected to come in near 32.3 million tons as compared with 20.2 million tons last year. Competition from Argentina, Australia and Eastern Europe is expected to be tougher against the US exporter in the months ahead. The USDA attach‚ in Australia pegged the 2003/2004 wheat crop at 25 million tons, up 1.5 million from their previous forecast and up 500,000 tons from the February USDA forecast. Rains moving across the plains states added to the bearish tone early in the session. Deliveries against the March contract were 105 contracts and CBOT registrations late Wednesday were reported at 2441 contracts from 2514 the previous session. The CCC announced that they will seek 70,000 tons of hard red winter wheat for Ethiopia.

Technical Outlook

WHEAT (MAY) 3/5/2004: The daily closing price reversal up is a positive indicator that could support higher prices. The market has a slightly positive tilt with the close over the swing pivot. Expect near-term support around 374 1/2 and below there at 369 1/4, with resistance levels at 382 1/2 and 384 3/4. A negative signal for trend short-term was given on a close under the 9-bar moving average. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 369 1/4.

LIVE CATTLE RECAP

3/4/2004

April cattle closed 1.00 higher at 79.32, 1.12 off the high of the day at 80.45 and 0.32 better than the day’s low of 79.00. The market opened sharply higher on euphoria over the announcement last night that Mexico was lifting it ban on most imports of US beef and was supported by strong cash markets for cattle and beef. A representative from the USDA has stated they will soon propose new rules to allow imports of Canadian cattle younger than 30 months. (Younger cattle are considered less susceptible to mad cow.) This is expected to meet stiff opposition from the cattle industry. It doesn’t appear that any animals would be allowed in before 2005. Cash cattle markets were mostly quiet today after seeing active trade yesterday at $85, which was up $3 from the week prior. There were some light bids today at $85 and the few that had cattle left to sell were asking $87. Today’s estimated slaughter came in at 123,000 head versus guesses ranging from 124,000 to 129,000. The total for so far this week is 485,000 head versus 465,000 last week and 499,000 a year ago. At noon, boxed beef cutout values were up $.88 to $140.21 and up $6.74 from $133.47 a week ago.

Technical Outlook

CATTLE (APR) 3/5/2004: Rising stochastics at overbought levels warrant some caution for bulls. The next upside objective is 81.02. The market has a slightly positive tilt with the close over the swing pivot. Support should be encountered at 78.70 and below there at 78.12. Market resistance is at 80.15 and then again at 81.02. If yesterday’s gap higher on the day session chart holds, additional buying could develop this session. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market is approaching overbought levels with an RSI over 70.

LEAN HOGS RECAP

3/4/2004

April hogs closed 0.42 lower at 60.47, 0.43 off today’s high at 60.47 and 0.87 up from the low of 59.60. The lower opening came on follow through from yesterday’s weak action, especially in light of the weakening cash pork and hog markets and reduced packer profit margins. Reports that the USDA will lift the ban on imports of Canadian cattle was viewed as supportive to hogs because it’s believed that it would slow down the number of hogs that have entered since the ban was put in place. Today’s estimated slaughter came in at 385,000 head versus guesses ranging from 384,000 to 387,000. The total on the week is now 1,544,000 versis 1,526,000 last week and 1,517,000 a year ago. Peoria hogs traded $1.50 lower at $41.00.

Technical Outlook

HOGS (APR) 3/5/2004: It is a slightly negative indicator that the close was under the swing pivot. Resistance levels comes in at 61.12 and 61.67 today, while support is around 59.82 and then 59.07. 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 59.07.

COCOA MARKET RECAP

3/4/2004

Fund sales continued to pressure May cocoa with the market on the verge of testing key support at 1450. Reports of violence in the Ivory Coast were largely ignored since harvest is nearing an end and the crop is flowing out of the country. If 1450 fails to hold, the next support area for May cocoa comes in at 1417.

Technical Outlook

COCOA (MAY)03/05/04 The close below the 1st swing support could weigh on the market. Cocoa should run into resistance at 1493 and above there at 1513 with support at 1458 and 1443. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside target is 1442.75. Short-term indicators on the defensive. Consider selling an intraday bounce.

COFFEE MARKET RECAP

3/4/2004

July coffee closed 110 higher on the session as the early break to test yesterdays lows held support and short-covering supported a bounce part of the way into the gap area of 75.25-74.50. Volume was seen as light and commercial traders were light participants on both sides of the market. A move to the lowest level since December 5th for the May contract in London helped keep the market down early in the session until the bounce in the last hour of trade. Cash differentials were steady on the day and cash traders were discussing the news that Sara Lee raised prices for food service coffee this week.

Technical Outlook

COFFEE (MAY)3/5/04 The market setup is supportive for early gains with the close over the 1st swing resistance. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The next downside objective is now at 72.10.The Coffee contract should run into resistance at 75.55 and above there at 76.20 with support at 73.5 and 72.10. The market’s short-term trend is negative as the close remains below the 9-day moving average.

SUGAR MARKET RECAP

3/4/2004

Holding support and closing higher in New York along with the highest close since August of 2003 for May sugar in London sets the market up for continued strong gains on short-covering alone for sugar into early next week. May sugar closed 7 higher on the session and near the high end of a 14 point range. Trade sentiment remains very negative with talk of the potential record crop in Brazil and continued weak demand from importers due to high freight rates. The International Sugar Organization reported a world production surplus of 614,000 tonnes for the 2003/2004 season as compared with a surplus of 6.929 million tons last year. The new estimate compares with a forecast in November for a surplus of 1.374 million tons. Other trade houses in London has recently revised their surplus forecasts to a slight deficit due to lower than expected production from India, China and Thailand.

Technical Outlook

SUGAR (MAY) 3/5/2004: The upside daily closing price reversal gives the market a bullish tilt. The close over the pivot swing is a somewhat positive setup. Swing resistance comes in at 6.25, with support found at 5.97. The close above the 9-day moving average is a positive short-term indicator for trend. A crossover down in the daily stochastics is a bearish signal. Momentum studies trending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. The next downside target is now at 5.97.

COTTON MARKET RECAP

3/4/2004

May cotton closed 105 lower on the session with slow sales and the improving production outlook for the 2004/2005 season as factors which contributed to the additional long liquidation selling. Good moisture in Texas and across the entire southern portion of the US and the outlook for a much larger world crop this year are factors which pulled the market sharply lower. Weekly export sales came in at 159,100 bales as compared with trade expectations at 150,000-200,000 bales. Old crop sales were 148,100 bales as compared with 57,900 bales necessary each week to reach the USDA projection. Cumulative sales have reached 89.1% of the forecast for the season as compared with 89.5% on average for this time of the year. Shipments were expected to come in near 200,000-250,000 bales but the actual shipments of 318,000 bales provided some support. Trade expectations for improving export and domestic mill usage estimates from the USDA in next weeks supply/demand forecast helped to provide some underlying support.

Technical Outlook

COTTON (MAY) 3/5/2004: 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. Next resistance area comes in at 70.02 and then again at 71.31, while support is targeted at 67.92 and 67.11. Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The next downside objective is 67.11. ORANGE JUICE (MAY)3/5/04 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 64.00 and above there at 64.20 with support at 63.50 and 63.20. The market’s short-term trend is positive on a close above the 9-day moving average. 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 64.2.