The Week Starts Out With A Positive Tone–Here’s Why

BOND MARKET RECAP

4/25/2005

June Bonds finished up 0-06 at 114-06, 0-04 off
the high and 0-07 up from the low.

June 10 Yr Treasury Notes finished down 0-005 at
111-010, 0-035 off the high and 0-035 up from the low.

The Treasury market showed signs of
strength early but failed to add to early gains in the wake of softer than
expected existing home sales data. Apparently a rise in the Dollar off talk that
China would move to float their currency on their own time schedule dampened
long interest in the Dollar and that in turn mitigated interest in the long side
of Treasuries. We also suspect that gains in US equity prices undermined
Treasuries as weakness in equities on Friday seemed to be providing support.
Even more surprising is the fact that Treasuries failed to find support off
expectations for a soft set of new home sales figures on Tuesday morning.

Technical Outlook

BONDS (JUN) 04/26/2005: The crossover up in the
daily stochastics is a bullish signal. Momentum studies are trending higher but
have entered overbought levels. 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 near-term upside target
is at 114-17. The next area of resistance is around 114-11 and 114-17, while 1st
support hits today at 113-31 and below there at 113-24.

TNOTES (JUN) 04/26/2005: Momentum studies
trending lower from overbought levels is a bearish indicator and would tend to
reinforce lower price action. The cross over and close above the 18-day moving
average indicates the longer-term trend has turned up. The daily closing price
reversal down puts the market on the defensive. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. The next
downside objective is now at 110-245. The next area of resistance is around
111-050 and 111-100, while 1st support hits today at 110-285 and below there at
110-245.

 

STOCK INDICES RECAP

4/25/2005

June S&P finished up 7.1 at 1164.3, 1.7 off the
high and 5.8 up from the low.

June S&P E-Mini closed up 6.75 at 1164. This was
8.5 up from the low and 2.25 off the high.

June Dow closed up 68 at 10256. This was 71 up
from the low and 14 off the high.

The stock market managed to rise despite the
residual macro economic uncertainty from last week. Apparently the Valero buyout
sparked a little bit of merger and acquisition interest and with an upgrade for
Apple computer thrown into the mix it was clear that Wall Street was able to
facilitate some concentrated buying interest to start the week out on a positive
tone. We must also note a broad based market boost from Boeing stock, which
apparently benefited from news of a large plane order from Air Canada. The
market was able to maintain the gains even in the face of negative recall news
from the auto sector. Some suggest that the inability to extend the early crude
oil rally helped to facilitate some mid day buying but with crude holding just
under $56.00 we can hardly see energy prices as a supportive element.

Technical Outlook

S&P 500 (JUN) 04/26/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The close below the 18-day moving average is an
indication the longer-term trend has turned down. It is a mildly bullish
indicator that the market closed over the pivot swing number. The near-term
upside target is at 1170.77. The next area of resistance is around 1168.05 and
1170.77, while 1st support hits today at 1160.55 and below there at 1155.78.

SP EMINI (JUN) 04/26/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The market back below the 18-day moving average suggests
the longer-term trend could be turning down. With the close higher than the
pivot swing number, the market is in a slightly bullish posture. The near-term
upside target is at 1173.18. The next area of resistance is around 1169.37 and
1173.18, while 1st support hits today at 1158.63 and below there at 1151.69.

NASDAQ (JUN) 04/26/2005: Daily stochastics are
showing positive momentum from oversold levels, which should reinforce a move
higher if near term resistance is taken out. The close below the 18-day moving
average is an indication the longer-term trend has turned down. The close over
the pivot swing is a somewhat positive setup. The near-term upside objective is
at 1452.75. The next area of resistance is around 1448.50 and 1452.75, while 1st
support hits today at 1435.50 and below there at 1426.75.

 

CURRENCY MARKET RECAP

4/25/2005

June US Dollar finished up 34 at 8379, 19 off the
high and 38 up from the low.

June Euro finished down 0.76 at 130.05, 0.07 off
the high and 0.35 up from the low.

June Euro Dollar closed down 0.005 at 96.585.
This was 0.01 up from the low and 0.01 off the high.

June Canadian Dollar closed down 0.21 at 80.81.
This was 0.22 up from the low and 0.12 off the high.

June British Pound finished down 0.53 at 190.54,
0.2 off the high and 0.19 up from the low.

June Swiss closed down 0.48 at 84.42. This was
0.3 up from the low and 0.03 off the high.

June Japanese Yen closed up 0.24 at 95.04. This
was 0.24 up from the low and 0.08 off the high.

The Dollar was supported for most of the session
by talk that China was going to take their time in changing the way their
currency is valued. We suspect that the strength in the US equity market
supported the Dollar throughout the session even though US economic information
released early Monday wasn’t that impressive. However, with Euro zone economic
information early Monday also soft, the Dollar simply maintained the edge in the
macro economic differential equation that it assumed from Europe in the early
going.

Technical Outlook

YEN (JUN) 04/26/2005: Momentum studies are
trending higher but have entered overbought levels. The market now above the
18-day moving average suggests the longer-term trend has turned up. Market
positioning is positive with the close over the 1st swing resistance. The next
upside objective is 95.32. The next area of resistance is around 95.20 and
95.32, while 1st support hits today at 94.88 and below there at 94.68.

EURO (JUN) 04/26/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The major trend could be turning up with the close back above the
18-day moving average. The gap lower on the day session chart is bearish and
puts the market on the defensive. The close below the 2nd swing support number
puts the market on the defensive. The next upside target is 130.40. The next
area of resistance is around 130.26 and 130.40, while 1st support hits today at
129.84 and below there at 129.56.

 

PRECIOUS METALS RECAP

4/25/2005

June Gold closed up 0.2 at 435.8. This was 1.7 up
from the low and 0.5 off the high.

July Silver finished down 0.015 at 7.306, 0.014
off the high and 0.056 up from the low.

 

The gold market continues to coil within a tight
range and surprised some players by holding together in the face of an initial
rally in the Dollar on Monday morning. The market might also have been a little
impressed with the performance in gold on Monday morning, especially in the face
of weakness in silver. While the metals markets have been periodically supported
by strength in equity prices, we suspect that concerns for a US/China currency
battle create some concern of sagging physical demand for metals in the future.
On the other hand, the prospect of a re-peg in the Chinese currency seems to
pressure the Dollar and that could certainly provide renewed strength for gold.

Technical Outlook

SILVER (JUL) 04/26/2005: 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 market tilt is slightly negative with the close under the pivot.
The next upside target is 736.5. The next area of resistance is around 734.1 and
736.5, while 1st support hits today at 727.1 and below there at 722.6.

GOLD (JUN) 04/26/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The market now above the
18-day moving average suggests the longer-term trend has turned up. The daily
closing price reversal up on the daily chart is somewhat positive. It is a
mildly bullish indicator that the market closed over the pivot swing number. The
next upside objective is 437.7. The next area of resistance is around 436.9 and
437.7, while 1st support hits today at 434.7 and below there at 433.3.

 

COPPER MARKET RECAP

4/25/2005

June Copper closed up 0.10 at 148.80. This was
2.80 up from the low and equal to the high.

At times during the session Monday copper prices
were under significant pressure and that seemed to come from the fear that the
Chinese economy might end up slowing if the world forced a change in the
currency peg. However, the market apparently found some buying interest around
the lows, with the Press reporting physical buying and spec buying around the
lows. The market could have been pressured by concerns that the US economy was
slowing but with the US equity market managing an impressive upward extension,
the threat against the economy on Monday morning seemed to be misguided.

 

ENERGY MARKET RECAP

4/25/2005

June Crude Oil closed down 0.82 at 54.57. This
was 0.07 up from the low and 1.31 off the high.

June Heating Oil closed down 2.40 at 152.66. This
was 0.41 up from the low and 3.64 off the high.

June Unleaded Gas finished down 1.18 at 164.06,
3.94 off the high and 0.56 up from the low.

June Natural Gas finished down 0.05 at 7.22, 0.17
off the high and 0.01 up from the low.

June Propane closed up 0.00 at 0.88. This was
equal to the low and 0.02 off the high.

While the European energy markets were mostly
firm to start the week, the US energy markets showed divergence throughout the
session and that would seem to downplay the bull case slightly. However, the
market is watching refinery activity closely and in the process noted several
minor problems in the US. Traders are aware of the meeting between Saudi
Officials and US officials at the Bush compound in Texas and that could possibly
yield a temporary corrective slide in oil prices. While the fear for the economy
is displaced partly by the rise in the equity market on Monday, Wall Street is
beginning to float a eave of forecasts calling for a slower US economy and that
could foster energy demand concerns and some near term price weakness.

Technical Outlook

CRUDE OIL (JUN) 04/26/2005: The major trend has
turned down with the cross over back below the 40-day moving average. Momentum
studies are trending higher from mid-range, which should support a move higher
if resistance levels are penetrated. The close below the 18-day moving average
is an indication the longer-term trend has turned down. The market’s close below
the 1st swing support number suggests a moderately negative setup for today. The
near-term upside objective is at 56.26. The next area of resistance is around
55.25 and 56.26, while 1st support hits today at 53.88 and below there at 53.50.

UNLEADED (JUN) 04/26/2005: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The downside closing price
reversal on the daily chart is somewhat negative. It is a slightly negative
indicator that the close was lower than the pivot swing number. The next upside
target is 169.40. The next area of resistance is around 166.31 and 169.40, while
1st support hits today at 161.81 and below there at 160.41.

HEATING OIL (JUN) 04/26/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The major trend has turned down with the cross
over back below the 18-day moving average. 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 near-term upside target is at 157.51. The next
area of resistance is around 154.68 and 157.51, while 1st support hits today at
150.64 and below there at 149.42.

 

CORN MARKET RECAP

4/25/2005

July Corn finished up 4 3/4 at 222 1/4, 1
1/2 off the high and 2 up from the low. December Corn closed up 3 1/4 at 237
1/4. This was 1/2 up from the low and 2 3/4 off the high.

The weather along with short-covering supported
the solid gains early in the session with funds noted buyers of near 3000
contracts. News that there was more than 10,000 contracts of May 210 put options
exercised over the weekend left many traders with the need to buy futures as an
offset early today and this helped boost futures as well. Weekly export
inspections came in at 33.29 million bushels as compared with trade expectations
at 19-27 million. Cumulative shipments have reached 54.6% of the USDA forecast
for the season as compared with 62.2% as the 5-year average for this time of the
year. On top of the weekly exports, the USDA announced a sale of 165,000 tonnes
of US corn to unknown destination. Wet and cold weather conditions over the
weekend is expected to keep corn producers out of the fields early this week and
there seems to be enough rain in the forecast for Tuesday and again on
Friday/Saturday (especially in the eastern cornbelt) to keep planting progress
slow this week. Support for July corn moves up to 219 with resistance at 224
1/2.

Technical Outlook

CORN (JUL) 04/26/2005: The market now above the
60-day moving average suggests the longer-term trend has turned up. A positive
indicator was given with the upside crossover of the 9 & 18 bar moving average.
Momentum studies are rising from mid-range, which could accelerate a move higher
if resistance levels are penetrated. The market now above the 18-day moving
average suggests the longer-term trend has turned up. 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 near-term upside target is at 225 1/2. The next area of
resistance is around 224 and 225 1/2, while 1st support hits today at 220 1/2
and below there at 218 3/4.

 

SOY COMPLEX RECAP

4/25/2005

July Soybeans finished up 1 1/2 at 642, 14 3/4
off the high and 1 up from the low. November Soybeans closed up 1 3/4 at 629
3/4. This was equal to the low and 12 1/4 off the high.

July Soymeal closed up 3.3 at 199.6. This was 0.5
up from the low and 5.1 off the high.

July Soybean Oil finished up 0.02 at 22.95, 0.44
off the high and 0.05 up from the low.

While closing higher on the day, the close was
well under the opening and nearly 15 cents off of the highs of the day. Funds
were noted buyers of near 3000 contracts into the mid-session but when the
buying slowed, long liquidation selling pressured futures into the close. Active
fund trader buying and strength in the other grains helped support the solid
gains early in the day. The move to the highest level since March 31st and a
bullishly construed Commitment-of-Traders report helped support new buying and
short-covering. While the other grains had weather reasons to rally, soybean
buying was mostly speculative. According to the Brazil Vegetable Oil Industry
Association, Brazil export registrations for the 2005/2006 season have reached
just 9.35 million tonnes as compared with 15.74 million tonnes last year at this
time. Weekly export inspections came in at 15.45 million bushels as compared
with trade expectations at 11-16 million. Cumulative shipments have reached
92.4% of the USDA forecast for the season as compared with 84.1% as the 5-year
average for this time of the year. Wet and cold weather conditions over the
weekend is expected to keep corn producers out of the fields early this week and
there seems to be enough rain in the forecast for Tuesday and again on
Friday/Saturday to keep planting progress slow this week. South Korea bought
25,000 tonnes of US soybeans over the weekend. July soybean support comes in at
639 and 633 1/2 with 649 1/2 and 653 1/4 as resistance.

Technical Outlook

BEANS (JUL) 04/26/2005: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The market has a slightly
positive tilt with the close over the swing pivot. The near-term upside target
is at 661. The next area of resistance is around 649 3/4 and 661, while 1st
support hits today at 634 1/4 and below there at 629 3/4.

MEAL (JUL) 04/26/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The major trend could be
turning up with the close back above the 18-day moving average. If yesterday’s
gap higher on the day session chart holds, additional buying could develop this
session. The market has a bullish tilt coming into today’s trade with the close
above the 2nd swing resistance. The next upside target is 206.3. The market is
becoming somewhat overbought now that the RSI is over 70. The next area of
resistance is around 202.4 and 206.3, while 1st support hits today at 196.8 and
below there at 195.2.

BEANOIL (JUL) 04/26/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
cross over and close above the 18-day moving average is an indication the
longer-term trend has turned positive. It is a slightly negative indicator that
the close was lower than the pivot swing number. The near-term upside objective
is at 23.53. The next area of resistance is around 23.19 and 23.53, while 1st
support hits today at 22.71 and below there at 22.56.

 

WHEAT MARKET RECAP

4/25/2005

July Wheat finished up 11 1/4 at 330 1/2, 9 1/2 off the high
and 7 up from the low. December Wheat closed up 10 1/4 at 346 1/2. This was 6 up
from the low and 11 off the high.

Talk of freeze damage in Kansas and Oklahoma and
dryness problems in parts of southern Kansas and Oklahoma helped to trigger the
surge higher into the mid-session. Active fund and speculative buying supported
the solid gains this morning and strength in the other grains and in Minneapolis
and Kansas City helped support. Weekly export inspections came in at 20.9
million bushels as compared with trade expectations at 12-18 million. Cumulative
shipments have reached 93% of the USDA forecast for the season as compared with
89% as the 5-year average for this time of the year. Cold weather over the
weekend may have caused some damage with reports from Kansas and Oklahoma of
blue-toned wheat. The heat and sun last week may have boosted the crop along to
a more vulnerable cold weather stage of development. With funds holding a net
short position, the move to the highest level since April 1st attracted active
fund buyers. Funds were noted buyers of near 10,000 contracts into the
mid-session. July wheat support comes in at 325 3/4 with 335 3/4 and 343 1/2 as
next resistance.

Technical Outlook

WHEAT (JUL) 04/26/2005: The market now above the
60-day moving average suggests the longer-term trend has turned up. Positive
momentum studies in the neutral zone will tend to reinforce higher price action.
The cross over and close above the 18-day moving average is an indication the
longer-term trend has turned positive. Follow through buying looks likely if the
market can hold yesterday’s gap on the day session chart. There could be more
upside follow through since the market closed above the 2nd swing resistance.
The near-term upside objective is at 347 1/2. The next area of resistance is
around 338 3/4 and 347 1/2, while 1st support hits today at 322 1/4 and below
there at 314 3/4.

 

LIVE CATTLE RECAP

4/25/2005

June Live Cattle finished up 1.40 at 87.12, 0.12
off the high and 0.85 up from the low.

May Feeder Cattle closed up 1.75 at 108.65. This
was 1.15 up from the low and 0.05 off the high.

June cattle closed sharply higher on the session
with other contracts like the August futures moving to new contract highs. The
Cattle-on-Feed report combined with the cold storage report showed that demand
was stronger than expected in March and now supplies are not as burdensome as
expected going into the stronger demand period ahead. Boxed beef cutout values
at mid session were up $.57 to $159.31 as compared with $156.19 one week ago.
Slaughter came in at 107,000 head as compared with trade estimates at
115,000-120,000 head.

Technical Outlook

CATTLE (JUN) 04/26/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The market now above the
18-day moving average suggests the longer-term trend has turned up. The gap
upmove on the day session chart is a bullish indicator for trend. There could be
more upside follow through since the market closed above the 2nd swing
resistance. The next upside objective is 87.900. The market is becoming somewhat
overbought now that the RSI is over 70. The next area of resistance is around
87.600 and 87.900, while 1st support hits today at 86.650 and below there at
85.970.

 

LEAN HOGS RECAP

4/25/2005

June Lean Hogs finished down 0.75 at 75.15, 1.25
off the high and 0.75 up from the low.

May Pork Bellies closed up 0.15 at 81.50. This
was 0.70 up from the low and 1.87 off the high.

June hogs pushed moderately lower on the session
as the cold storage report was a bit negative (except for bellies) and funds
were active sellers which traders thought was more long liquidation selling.
Cash markets were steady in spite of talk of weaker demand and poor profit
margins from packers. Slaughter came in at 382,000 head as compared with trade
estimates at 380,000-390,000 head. The largest total pork supply in cold storage
since 1999 helped to pressure.

Technical Outlook

HOGS (JUN) 04/26/2005: Daily stochastics are
trending lower but have declined into oversold territory. The close below the
18-day moving average is an indication the longer-term trend has turned down. It
is a slightly negative indicator that the close was under the swing pivot. The
next downside objective is 73.300. The next area of resistance is around 76.150
and 77.270, while 1st support hits today at 74.170 and below there at 73.300.

 

COCOA MARKET RECAP

4/25/2005

July Cocoa finished down 20 at 1486, 9 off the
high and 3 up from the low.

The cocoa market continued its recent slide in
the action Monday and with the political situation under wraps and the Dollar
strong it is not surprising that the selling continued. In fact, with the small
spec positioning being forced from the market and the funds even weary of the
near term trend it would not be surprising to see cocoa fall all the way back
below the January lows. In our opinion, a totally deflated price for cocoa is at
the October lows around $1,436 basis the July contract.

Technical Outlook

COCOA (JUL) 04/26/2005: A crossover down in the
daily stochastics is a bearish signal. 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. The market’s close below the 1st
swing support number suggests a moderately negative setup for today. The next
downside target is now at 1476. Some caution in pressing the downside is
warranted with the RSI under 30. The next area of resistance is around 1492 and
1499, while 1st support hits today at 1480 and below there at 1476.

 

COFFEE MARKET RECAP

4/25/2005

July Coffee closed down 0.45 at 127.35. This was
2.60 up from the low and 1.35 off the high.

July coffee closed slightly lower with a quiet
inside trading session. The Brazil crop official estimate on Friday failed to
trigger new trade activity as the market consolidated some of the gains from
last week. Weather has turned a bit bearish with rains in Vietnam and rain in
the forecast for Brazil this week helping to provide some selling pressures. The
rains in Vietnam could boost producer selling so traders are taking a wait and
see attitude in the cash market. With the arabica harvest still two months away,
traders believe the cash market will tighten and that demand might rise for
exchange stocks. Exchange coffee warehouse stocks stood at 4.485 million bags as
of April 22nd, down 2,878 bags from the previous day with 43,526 bags pending
review.

Technical Outlook

COFFEE (JUL) 04/26/2005: The close below the
40-day moving average is an indication the longer-term trend has turned down.
Momentum studies are rising from mid-range, which could accelerate a move higher
if resistance levels are penetrated. The cross over and close above the 18-day
moving average indicates the longer-term trend has turned up. With the close
higher than the pivot swing number, the market is in a slightly bullish posture.
The near-term upside target is at 130.95. The next area of resistance is around
129.30 and 130.95, while 1st support hits today at 125.40 and below there at
123.10.

 

SUGAR MARKET RECAP

4/25/2005

July Sugar closed down 0.01 at 8.36. This was
0.09 up from the low and 0.01 off the high.

July sugar closed just 1 tick lower on the
session as the move to a 5-session low early in the day failed to find much in
the way of follow-through selling. Long liquidation of the May futures helped to
pressure the market early. The recent break has attracted increased buying from
Russia but traders await any news of China buying before a positive reaction.
The advancing harvest in Brazil is seen as a limiting factor on the rally.

Technical Outlook

SUGAR (JUL) 04/26/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The major trend has turned down with the cross
over back below the 18-day moving average. The market tilt is slightly negative
with the close under the pivot. The next upside objective is 8.44. The next area
of resistance is around 8.41 and 8.44, while 1st support hits today at 8.31 and
below there at 8.24.

 

COTTON MARKET RECAP

4/25/2005

July Cotton finished up 2.89 at 57.01, 0.11 off
the high and 2.76 up from the low.

July cotton broke out to the upside and closed
sharply higher moving to the highest level since early September with commercial
and speculative buyers active. News that Dunavant took 1257 of the 1265
deliveries on first notice day for the May contract helped to support the upside
break-out. The firm also decertified 98,453 bales of deliverable certified
stocks at the exchange which led to talk of a home for the big deliveries. The
USDA attaché in China believes the country will import a record 3.3 million
tonnes of cotton in the 2005/2006 season because of production falling to near
5.5 million tonnes.

Technical Outlook

COTTON (JUL) 04/26/2005: Momentum studies are
trending higher but have entered overbought levels. The market now above the
18-day moving average suggests the longer-term trend has turned up. Since the
close was above the 2nd swing resistance number, the market’s posture is bullish
and could see more upside follow-through early in the session. The near-term
upside target is at 59.21. The market is becoming somewhat overbought now that
the RSI is over 70. The next area of resistance is around 58.44 and 59.21, while
1st support hits today at 55.58 and below there at 53.48.