10 února 2009

10/2 Market update

Today at 14:30 CET we have the monthly release of the Supply and demand report from the U.S. Department of Agriculture (USDA).

For Corn it is expected to show increased U.S. stocks and decreased South American production. Last month we saw Corn lose 12% after the release only to recover later on the back of the deteriorating weather conditions in South America.

Wheat will focus on the drought situation in China http://www.ft.com/cms/s/0/016d885e-f607-11dd-a9ed-0000779fd2ac.html (Beijing fights drought as wheat fears rise) and the dryness in U.S. Southern Plains.

Soybeans will also focus on the South American drought.

WTI Crude (CLH9) failed once again the break 20 day ma yesterday and has been dragged lower by a stronger dollar and continued selling pressure from the monthly roll into April with the spread settling at -$6.28 yesterday.

Euro under some pressure this morning as a Russian bank official said the nations lenders are in talks with foreign creditors about $400 bn of loans. This has once again lead to JPY buying and EUR selling.

Algeria says that OPEC would cut production futher if oil remains below $40.

Elsewhere hopes are still pinned on the US stimulus package with Congress seeking to complete work so it can be sent to the President before the end of the week.

Support: 39.40 38.00
Resistance: 42.20 44.40

GCJ9 dropped below $900 yesterday on the back of buying fatigue after the rally of the last couple of weeks ran out of steam after having failed to break the $930 level. Price upgrades to $1,000 from several analysts helped the market getting ahead of itself.

The platinum / gold spread has received some interest as well recently with Platinum being favoured. Keep an eye on a break above $1,015 on PLJ9 which could trigger more buying.

For now though Gold is letting the EUR/USD play catch up after rallying despite a stronger dollar recently.

Support looks firm around the $890 level while resistance is seen at $902 and $910.

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