Record Oil Prices Send Equities Lower

Technical Outlook

CORN (MAY) 03/17/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The cross over and close above the 18-day moving average indicates the
longer-term trend has turned up. It is a slightly negative indicator that the
close was under the swing pivot. The next upside target is 231. The next area of
resistance is around 227 3/4 and 231, while 1st support hits today at 223 1/4
and below there at 222.  

SOY COMPLEX RECAP

3/16/2005

May Soybeans finished down 7 1/2 at 673 1/2, 18
off the high and 1 1/2 up from the low. November Soybeans closed down 8 1/2 at
635 1/2. This was 2 up from the low and 10 1/2 off the high.

May Soymeal closed down 4.3 at 197.9. This was
0.4 up from the low and 7.1 off the high.

May Soybean Oil finished down 0.08 at 24.15, 0.37
off the high and 0.18 up from the low.

After trading at the highest level since June,
May soybeans collapsed to close lower on the session with late long liquidation
selling helping to pressure. The market was called 4-6 cents higher but
commercial selling emerged to trigger the weaker trade early. The bullish action
overnight from the China exchange was seen as a supportive factor and the trade
believes that China is shifting near-term demand to US soybeans from the west
coast. Talk of dry weather in southern Brazil for the next week has traders
talking about additional damage and talk of wet weather in the central and
northern areas which is slowing harvest has helped to keep weather as a mostly
supportive factor. Cash basis levels at the gulf are steady to weak due to
increased producer selling of the past few days. Light long liquidation from
speculators was noted with talk of an extreme overbought condition basis
traditional technical indicators. For the weekly export sales report, released
before the opening, traders are looking for soybeans sales near 300,000-500,000
tons, meal sales near 50,000-125,000 tons and oil sales near 5,000-10,000 tons.
Resistance for May soybeans comes in at 684 1/2 and 693 with support at 666 and
660 1/2.

Technical Outlook

BEANS (MAY) 03/17/2005: 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 major trend could be turning up with the close back above the 18-day
moving average. The market could take on a defensive posture with the daily
closing price reversal down. It is a slightly negative indicator that the close
was under the swing pivot. The next downside target is now at 658 1/4. The
market is approaching overbought levels with an RSI over 70. The next area of
resistance is around 683 1/4 and 697, while 1st support hits today at 663 3/4
and below there at 658 1/4.

MEAL (MAY) 03/17/2005: 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 cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The outside day down and
close below the previous day’s low is a negative signal. The defensive setup,
with the close under the 2nd swing support, could cause some early weakness. The
next downside target is 192.1. The next area of resistance is around 201.6 and
207.0, while 1st support hits today at 194.2 and below there at 192.1.

BEANOIL (MAY) 03/17/2005: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. The market now above the 18-day moving average
suggests the longer-term trend has turned up. The market tilt is slightly
negative with the close under the pivot. The next downside objective is now at
23.65. With a reading over 70, the 9-day RSI is approaching overbought levels.
The next area of resistance is around 24.42 and 24.74, while 1st support hits
today at 23.88 and below there at 23.65. 

WHEAT MARKET RECAP

3/16/2005

May Wheat finished down 7 at 361, 7 1/2 off the high and 1/2
up from the low. July Wheat closed down 7 at 368. This was 1/2 up from the low
and 7 off the high.

The lower close after a new high for the move
could attract some long liquidation selling on Thursday morning unless export
sales are respectable. The lack of fundamental justification for the sharp rally
to new highs this week and talk of the overbought condition of the market helped
trigger the weaker tone. Fund buying was absent early today and fund buying has
been the primary bullish force for the market for the 35 cent surge in the past
4 trading sessions. Some moisture in the plains this week is thought to keep
winter wheat conditions favorable but there is some talk of a drier weather
threat for western Nebraska and northwestern Kansas. A lack of export news added
to the bearish tone early in the session. For the weekly export sales report,
released before the opening, traders are looking for wheat sales near
300,000-450,000 tons as compared with sales last week at 352,900 tons. May wheat
resistance comes in at 365 with 354 1/4 and 349 1/2 as support.

Technical Outlook

WHEAT (MAY) 03/17/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The close below the 1st
swing support could weigh on the market. The next upside objective is 370 3/4.
The next area of resistance is around 365 and 370 3/4, while 1st support hits
today at 357 and below there at 354 3/4. 

LIVE CATTLE RECAP

3/16/2005

April Live Cattle finished down 0.07 at 89.67, 0.27 off the
high and 1.07 up from the low.

March Feeder Cattle closed down 0.02 at 106.05. This was 0.35
up from the low and 0.30 off the high.

The3 cattle market closed moderately higher on
the session after testing Monday’s lows early with June cattle closing up 32 on
the day and up 95 from the lows of the day. A lack of news from judges helped to
keep the trade choppy. Canadian cattle ranchers filed a lawsuit through NAFTA
for damages due to the ban of cattle exports to the US. A lower showlist this
week and higher beef prices should support the cash market but there were is
still concerns that the beef market is near a peak even though the same concerns
were active last week but beef prices continue to trend up. Boxed-beef cut-out
values at mid-session were up $1.17 to $158.47 as compared with $153.06 last
week. Slaughter came in at 119,000 head from trade expectations for
116,000-121,000 head.

Technical Outlook

CATTLE (APR) 03/17/2005: Negative momentum
studies in the neutral zone will tend to reinforce lower price action. The major
trend could be turning up with the close back above the 18-day moving average.
The market tilt is slightly negative with the close under the pivot. The next
downside objective is 88.150. The next area of resistance is around 90.320 and
90.800, while 1st support hits today at 89.020 and below there at 88.150. 

LEAN HOGS RECAP

3/16/2005

April Lean Hogs finished up 0.70 at 71.27, 1.07 off the high
and 0.32 up from the low.

March Pork Bellies closed up 1.60 at 89.60. This was equal to
the low and 0.90 off the high.

The market closed sharply higher on the day as
renewed fund and speculative buying emerged which was in sharp contrast to the
active long liquidation trend seen in the past week. Cash markets were $1.00
higher and pork cut-out markets have been steadier. This along with ideas that
demand might remain strong helped to support. Talk of improving packer demand
and hopes of continued strong exports helped to support. The packer-induced
cut-back in slaughter of the recent past may have caused a slight back-up of
hogs in the country. Weekly average weights for the week ending March 12 for
Iowa/Minnesota came in at 267.8 pounds from 266.7 the previous week and 264.5
last year at this time. The 2-day lean index for the period ending March 14th
came in at 73.06, down 1.11 on the session and up from 72.98 last week at this
time. Slaughter came in at 377,000 head from trade expectations for
378,000-383,000 head.

Technical Outlook

HOGS (APR) 03/17/2005: Momentum studies are
declining, but have fallen to oversold levels. The close under the 18-day moving
average indicates the longer-term trend could be turning down. With the close
over the 1st swing resistance number, the market is in a moderately positive
position. The next downside objective is 70.070. The next area of resistance is
around 71.970 and 72.850, while 1st support hits today at 70.600 and below there
at 70.070. 

COCOA MARKET RECAP

3/16/2005

May Cocoa finished up 44 at 1829, 6 off the high and 56 up
from the low.

The strong close in May cocoa with prices pushing
past resistance at $1,800 keeps the uptrend with next upside targets at $1,843
then $1,892. The weaker Dollar and improved technical structure continues to
attract speculative interest. Brazil cocoa arrivals for the 2004/05 season as of
March 13th were down nearly 13% from last year, while grinding during February
fell nearly 5% from a year ago. The shortfall of rain in the Bahia cocoa region
in Brail is beginning to be a concern.

Technical Outlook

COCOA (MAY) 03/17/2005: The crossover up in the
daily stochastics is a bullish signal. Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The cross over and close above the 18-day moving average indicates the
longer-term trend has turned up. The market has a bullish tilt coming into
today’s trade with the close above the 2nd swing resistance. The next upside
target is 1878. The market is becoming somewhat overbought now that the RSI is
over 70. The next area of resistance is around 1860 and 1878, while 1st support
hits today at 1798 and below there at 1755. 

COFFEE MARKET RECAP

3/16/2005

May Coffee closed down 0.55 at 136.35. This was 1.70 up from
the low and 1.55 off the high.

May coffee closed 55 lower on the session with
two-sided trade for the day. The market consolidated most of yesterday’s gains
and awaits further developments in the cash market. Traders are a bit nervous
that if there are defaults from producers on delivering coffee to roasters which
was purchased at a sharply lower price, some roasters will need to jump in and
buy extra coffee in the spot market. For now, however, here have been no
defaults but Vietnam traders are re-negotiating delivery times on some foreword
contracts. Brazil coop stocks for the end of February fell to 5.15 million bags
from 6.05 million at the end of January but still higher than the 4.07 million
bags held last year at this time. Brazil government officials indicated that
none of the 100,000 bags of coffee offered at auction were sold on Wednesday.
Buyers indicated that the minimum bid prices were almost as high as current
coffee prices for buying coffee which is several years old.

Technical Outlook

COFFEE (MAY) 03/17/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The market now above the 18-day moving average suggests the
longer-term trend has turned up. The market has a slightly positive tilt with
the close over the swing pivot. The near-term upside objective is at 139.55. The
market is approaching overbought levels with an RSI over 70. The next area of
resistance is around 137.95 and 139.55, while 1st support hits today at 134.75
and below there at 133.10. 

SUGAR MARKET RECAP

3/16/2005

May Sugar closed up 0.01 at 9.15. This was 0.04 up from the
low and 0.05 off the high.

May sugar closed 1 point higher on the session
with choppy, two-sided trade with a fairly tight range. Russian demand seems to
be picking up as the country has used up most of the sugar refined from last
year’s beet harvest and a more aggressive import campaign could emerge soon.
Black Sea cash sugar basis premiums have moved higher in the past week which
could be evidence of increased demand from Russia. Russia refined 577,529 tonnes
of white sugar from imported raw sugar for the January to March 11th time frame,
up 16% from the same period last year. Traders also expect near-term demand from
Libya and Taiwan bought 34,000 tonnes of raw sugar from Australia. Producer
selling against possible export sales from Europe helped pressure the London
futures into the close.

Technical Outlook

SUGAR (MAY) 03/17/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The major trend could be turning up with the close back
above the 18-day moving average. The daily closing price reversal up is a
positive indicator that could support higher prices. It is a slightly negative
indicator that the close was under the swing pivot. The near-term upside target
is at 9.24. The next area of resistance is around 9.19 and 9.24, while 1st
support hits today at 9.11 and below there at 9.07. 

COTTON MARKET RECAP

3/16/2005

May Cotton finished up 0.15 at 53.78, 0.42 off the high and
0.78 up from the low.

May cotton closed slightly higher on the session
in quiet trade. Commercial sellers are nervous to enter the market for fear of
being run-over by the funds and light speculative buying supported the strong
early gains and move to the highest level since September 14th. For the weekly
export sales report, released before the opening, traders are looking for cotton
sales near 150,000-200,000 bales as compared with sales last week at 205,900
bales. The technical action remains bullish with the market staying inside of a
steep uptrend channel and the steady increase in open interest remains as a
bullish development as well. However, traditional technical indicators are
extremely overbought and the market seems vulnerable to a setback with bullish
export news in the morning.

Technical Outlook

COTTON (MAY) 03/17/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The cross over and close above
the 18-day moving average is an indication the longer-term trend has turned
positive. The close over the pivot swing is a somewhat positive setup. The next
upside target is 54.89. The market is becoming somewhat overbought now that the
RSI is over 70. The next area of resistance is around 54.38 and 54.89, while 1st
support hits today at 53.18 and below there at 52.49.