Open and closes are from 2/28
CORN (MAY 11) Open – 723’4 Close – 731
Corn has rebounded nicely since hitting a low of 667 last week. Corn is close to making new contract highs. Some traders have said that corn was down due to end of month selling by funds, nothing fundamental. Demand continues to come in strong, especially from China. Also coming in strong is the demand for corn as ethanol, which should only grow as laws regulate more bio-fuel. We also see resistance at 740 but feel like it should be able to break through there. If it does, that would signal a new bull leg in our opinion.
COCOA (MAY 11) Open – 3660 Close – 3695
The political situation in the Ivory Coast to continues to disrupt supply to the ports. Cocoa is currently trading at 30 year highs. There is nothing new to report here as the market continues to grind higher off artificial reasons. We continue to be near term bullish but everything we hear indicates a good crop as witnessed by Cocobod raising their estimate by 100,000 tones. Again, we are near term bullish but are awaiting a topping pattern because, fundamentally, the price should be lower in our opinion.
COFFEE (MAY 11) Open – 267.65 Close – 271.70
Coffee is unchanged this morning but looks poised to test the contract highs of 278 soon. Smaller than expected crops from Brazil, Columbia and Vietnam have lent support to prices. Coffee is currently trading at its highest prices since 1997. Increases in demand worldwide are also moving prices higher. Columbia is in its third year in a row of lower than expected production. We continue to be bullish and feel like a test of $3 is coming.
HEATING OIL (APR 11) Open – 295.18 Close – 293.09
After breaking through resistance at 280, heating oil has been on a roll, mostly off the unrest in the Middle East. Although we have seen an uptick in demand due to the cold weather, we see most of the recent gains as fear driven. The energy complex (sans natural gas) looks frothy to us and unless we get fresh bullish news, a sell-off could be in order. We are near term bullish but are waiting to see what the market does at 305 before initiating any new positions.
SILVER (MAY 11) Open – 33.345 Close – 33.82
Silver is making new contract highs this morning and is trading at its highest price in 30 years. Boosted by the weak dollar and unrest in the Middle East, silver looks poised to make a run to 40 if gold break through 1430. We do have the fed regional presidents speaking this week which brings inflation back into focus. Silver has nearly doubled since the lows of August. We continue to be bullish but expect a pullback when the risk aversion trade comes out of the market.
CANADIAN DOLLAR (MAR 11) Open – 102.21 Close – 102.94
The Canadian Dollar broke through parity in a big way, finally. After being range bound for the start of the year, the higher prices we have seen in commodities (gold and crude especially) is finally starting to materialize in the loonie. The BOC kept rate steady although they look to be taking a more hawkish view of inflation. We continue to be bullish.
AUSTRALIAN DOLLAR (MAR 11) – Open – 101.37 Close – 101.73
Much like the loonie, the Australian Dollar is benefitting from the higher prices for wheat, gold and crude. Technically speaking, the market looks to be forming a large bull pennant flag. We are bullish and would be looking to work buy stops at 102.
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