Why Some Gold Traders Took Profits Today

Poor export news, talk of the overbought
condition of the market and a mad cow scare was enough to pressure corn prices.
News of a possible mad cow case in the US helped trigger a sharp break in cattle
and brought about selling in corn for fear of lower demand for corn if the case
is confirmed. Test results are expected in 4-7 days. In addition, weekly export
sales for corn came in at just 733,700 tons as compared with trade expectations
at 850,000-1.2 million tons. Cumulative sales have reached 34.8% of the USDA
forecast for the season as compared with 36.4% on average for this time of the
year. Gulf basis was steady again today as the increase in producer selling on
the rally this week has failed to trigger weakness in the cash market. March
corn support comes in at 214 1/2 and 213 with resistance at 217 1/2 and 220 1/2.

Technical Outlook

CORN (MAR) 11/19/2004: Positive momentum studies
in the neutral zone will tend to reinforce higher price action. The market’s
short-term trend is positive on the close above the 9-day moving average. The
gap down on the day session chart is bearish with more selling pressure possible
today. The swing indicator gave a moderately negative reading with the close
below the 1st support number. The near-term upside objective is at 216 1/2. The
next area of resistance is around 215 3/4 and 216 1/2, while 1st support hits
today at 214 1/4 and below there at 213 1/4.

 

SOY COMPLEX RECAP

11/18/2004

January Soybeans finished up 2 at 555, 2 off the
high and 5 1/2 up from the low. March Soybeans closed up 1 3/4 at 559 3/4. This
was 5 1/4 up from the low and 1 1/4 off the high.

January Soymeal closed up 2.3 at 160.1. This was
2.4 up from the low and 0.9 off the high.

January Soybean Oil finished down 0.17 at 21.44,
0.21 off the high and 0.19 up from the low.

News that another US cow is being tested for mad
cow after initial test was inconclusive trigger a limit-down move in cattle on
the opening but meal was strong and moved to the highest level since October
11th for the January contract on ideas that there could be further restrictions
on meat and bone meal feeding. In addition, broiler production in the US
continues to expand at a 3-4% clip which should keep domestic meal demand
strong. News that China bought 116,000 tons of US soybeans also helped limit the
selling early and contributed to the bounce to higher on the session. Weekly
export sales for soybeans came in at 960,500 tons as compared with trade
expectations at 750,000-1.0 million tons. Cumulative sales have reached 52.3% of
the USDA forecast for the season as compared with 53.5% on average for this time
of the year. Meal sales were 96,900 tons, in line with trade expectations.
Cumulative meal sales have reached 49.9% of the USDA forecast for the season as
compared with 41.2% on average for this time of the year. Oil sales were higher
than expected at 13,600 tons. Resistance for January soybeans comes in at 556
and 561 with support at 545 and 541.

Technical Outlook

BEANS (JAN) 11/19/2004: The upside crossover of
the 9 & 18 bar moving average is a positive signal. Daily stochastics have risen
into overbought territory which will tend to support reversal action if it
occurs. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. The market has a slightly positive tilt with
the close over the swing pivot. The near-term upside objective is at 561 1/2.
With a reading over 70, the 9-day RSI is approaching overbought levels. The next
area of resistance is around 558 3/4 and 561 1/2, while 1st support hits today
at 551 1/4 and below there at 546 3/4.

MEAL (JAN) 11/19/2004: The upside crossover (9
above 18) of the moving averages suggests a developing short-term uptrend. Daily
stochastics have risen into overbought territory which will tend to support
reversal action if it occurs. The market’s short-term trend is positive on the
close above the 9-day moving average. With the close over the 1st swing
resistance number, the market is in a moderately positive position. The
near-term upside objective is at 164.0. The next area of resistance is around
163.0 and 164.0, while 1st support hits today at 160.2 and below there at 158.3.

BEANOIL (DEC) 11/19/2004: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The market’s short-term trend is positive on the close above the
9-day moving average. It is a slightly negative indicator that the close was
under the swing pivot. The near-term upside target is at 21.84. The next area of
resistance is around 21.64 and 21.84, while 1st support hits today at 21.24 and
below there at 21.05.

 

WHEAT MARKET RECAP

11/18/2004

December Wheat finished down 2 1/4 at 316 1/4, 4 1/4 off the
high and 3/4 up from the low. March Wheat closed down 3 at 326 3/4. This was 1/4
up from the low and 4 3/4 off the high.

Ideas that the market was overbought and weakness
in the other grains contributed to the early weakness but the market found good
support on the break and managed to post 13-session highs before closing lower
on the session and near the lows of the day. Weekly export sales for wheat came
in at 502,500 tons as compared with trade expectations at 350,000-450,000 tons
and 304,900 tons necessary each week to reach the USDA projection. Cumulative
sales have reached 66.8% of the USDA forecast for the season as compared with
55.3% on average for this time of the year. Japan bought 76,800 tons of wheat at
their weekly tender overnight with 56,800 tons from the US. Taiwan bought 39,500
tons of US wheat overnight. Traders await possible export news from Iraq or
Pakistan. The EU awarded export licenses for 219,000 tons of soft wheat at their
weekly tender. Cash basis levels were steady. March wheat support comes in at
326 and 323 1/2 with resistance at 334 3/4 and 336.

Technical Outlook

WHEAT (MAR) 11/19/2004: Momentum studies are
rising from mid-range, which could accelerate a move higher if resistance levels
are penetrated. The market’s short-term trend is positive on the close above the
9-day moving average. The market could take on a defensive posture with the
daily closing price reversal down. The close below the 1st swing support could
weigh on the market. The near-term upside objective is at 332 3/4. The next area
of resistance is around 329 1/4 and 332 3/4, while 1st support hits today at 324
1/4 and below there at 323.

 

LIVE CATTLE RECAP

11/18/2004

December Live Cattle closed down 2.70 at 84.62.
This was 0.30 up from the low and 1.37 off the high.

January Feeder Cattle finished down 3.00 at
100.70, 1.40 off the high and equal to the low.

Cattle collapsed right from the start and even
hit limit-down in early trade with news from the USDA that an animal was being
tested for mad cow disease. The rapid-screening test had returned “inconclusive”
result and it may take several days before the results of a final test are
released. No other details were given such as location or age of the animal. The
rapid screening tests began on June 1st and as of November 15th; there have been
two other “inconclusive” results out of 113,264 animals tested. In both of the
other cases, the result was negative for mad cow. Boxed-beef prices were up $.93
to $139.42 at mid-session as compared with $132.88 one week ago. Sloppy feedlot
conditions and another storm in the forecast for the weekend has hurt cattle
performance this week but the fear of another case of mad cow, the first since
December, kept speculators in a long liquidation mode.

Technical Outlook

CATTLE (DEC) 11/19/2004: The close under the
40-day moving average indicates the longer-term trend could be turning down. A
positive indicator was given with the upside crossover of the 9 & 18 bar moving
average. Stochastics are at mid-range but trending higher, which should
reinforce a move higher if resistance levels are taken out. The market’s
short-term trend is negative as the close remains below the 9-day moving
average. The gap lower price action on the day session chart is a bearish
indicator for trend. The defensive setup, with the close under the 2nd swing
support, could cause some early weakness. The next upside objective is 86.550.
The next area of resistance is around 85.450 and 86.550, while 1st support hits
today at 83.800 and below there at 83.220.

 

LEAN HOGS RECAP

11/18/2004

December Lean Hogs closed down 0.42 at 74.40.
This was 0.95 up from the low and 1.27 off the high.

February Pork Bellies finished up 0.07 at 99.72,
1.07 off the high and 0.72 up from the low.

Hog futures experienced choppy, two-sided trade
as traders attempted to digest a mixed bags of news. The reports of a possible
mad cow case in the US was enough to support solid gains early in the day under
the concept that continued bans on US beef could support higher than expected
pork exports in the months ahead. Slaughter came in at 401,000 head today as
compared with trade expectations at 398,000-405,000 head. Slaughter has reached
1.614 million head this week as compared with 1.521 million last week and 1.571
million head last year at this time. The CME 2-Day Lean Index for the period
ending November 16th was reported at 77.05, up $.86 from the previous session
and up from 75.19 the previous week. A holiday next week is expected to reduce
packer demand and could ease cash markets. Traders also remain concerned that
the sharp run-up in pork production this week could pressure the pork product
market.

Technical Outlook

HOGS (DEC) 11/19/2004: A bearish signal was
triggered on a crossover down in the daily stochastics. Daily stochastics
turning lower from overbought levels is bearish and will tend to reinforce a
downside break especially if near-term support is penetrated. A positive signal
for trend short-term was given on a close over the 9-bar moving average. The
daily closing price reversal down is a negative indicator for prices. It is a
slightly negative indicator that the close was lower than the pivot swing
number. The next downside objective is 72.270. The next area of resistance is
around 75.500 and 76.700, while 1st support hits today at 73.300 and below there
at 72.270.

 

COCOA MARKET RECAP

11/18/2004

December Cocoa finished down 5 at 1611, 39 off
the high and equal to the low.

The cocoa market managed a minor short covering
bounce after the prior sessions selling action got carried away. The trade is
seeing the regional Peace talks as a tempering issue and that favors the bear
camp. The Press suspected that the small players were buyers Thursday morning
and considering that CNN was carrying violence stories from the Ivory Coast
overnight it isn’t surprising that specs moved in on the long side. Reports of
higher cash prices in Asian markets probably gave the cocoa market a minor added
lift especially since the Indonesian crop was rumored to be impacted by disease
several weeks ago.

Technical Outlook

COCOA (DEC) 11/19/2004: 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 market tilt is slightly
negative with the close under the pivot. The next downside objective is 1582.
The next area of resistance is around 1630 and 1659, while 1st support hits
today at 1592 and below there at 1582.

 

COFFEE MARKET RECAP

11/18/2004

December Coffee closed up 0.85 at 88.90. This was
1.65 up from the low and 1.10 off the high.

March coffee closed 65 higher on the session and
is now up 940 points on the week with the market staying inside of Monday’s
range all week. Fears that producer selling would intensify if the spot futures
were above 85.00 has subsided. Producer selling out of Brazil has remained
relative slow in spite of the strong rally and a senior government official in
Brazil this week indicated that the 2005/2006 coffee crop could fall to near 33
million bags due to off cycle year and a lack of fertilizer. Support for March
coffee comes in at 87.60 and 85.90 with 100.60 as next upside objective.

Technical Outlook

COFFEE (DEC) 11/19/2004: 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. With the close higher than the pivot swing
number, the market is in a slightly bullish posture. The next downside target is
now at 86.05. The next area of resistance is around 90.25 and 91.50, while 1st
support hits today at 87.55 and below there at 86.05.

 

SUGAR MARKET RECAP

11/18/2004

March Sugar closed up 0.09 at 8.78. This was 0.11
up from the low and 0.01 off the high.

March sugar closed 9 higher on the session to
re-capture some of Wednesday’s losses with light speculative fund buying and
some trade house buying helping to support. A solid gain in London futures
helped provide underlying support and talk that Russian buyers will be interest
in extending coverage if futures break much more helped to support. London trade
houses believe that the recent strength in sugar prices could encourage Brazil
millers to crush the entire 2004/2005 cane crop instead of leaving some cane in
the fields. On the other hand, firm ethanol values have provided solid support
to the cash market in Brazil on breaks. March sugar needs a close back over 886
to repair the technical damage done on the break this week.

Technical Outlook

SUGAR (MAR) 11/19/2004: 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 positive on the close
above the 9-day moving average. It is a mildly bullish indicator that the market
closed over the pivot swing number. The next upside target is 8.87. The next
area of resistance is around 8.83 and 8.87, while 1st support hits today at 8.72
and below there at 8.64.

 

COTTON MARKET RECAP

11/18/2004

December Cotton finished up 1.36 at 48.50, equal
to the high and 1.00 up from the low.

The cotton market pushed sharply higher on
Thursday led by the December contract as wet fields in Texas, tightness in
deliverable cotton and strong exports helped to support. Weekly export sales
came in at 243,500 bales as compared with trade expectations at 80,000-150,000
bales and 133,900 bales necessary each week to reach the USDA projection.
Cumulative sales have reached 55.6% of the USDA forecast for the season as
compared with 60.7% on average for this time of the year. Shipments came in at
126,900 bales as compared with 130,000-170,000 expected.

Technical Outlook

COTTON (DEC) 11/19/2004: The moving average
crossover up (9 above 18) indicates a possible developing short-term uptrend.
Daily stochastics have risen into overbought territory which will tend to
support reversal action if it occurs. The market’s close above the 9-day moving
average suggests the short-term trend remains positive. Follow through buying
looks likely if the market can hold yesterday’s gap on the day session chart.
The market’s close above the 2nd swing resistance number is a bullish
indication. The next upside target is 49.25. The market is becoming somewhat
overbought now that the RSI is over 70. The next area of resistance is around
49.00 and 49.25, while 1st support hits today at 48.00 and below there at 47.25.