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The
Weekly Pit Review
by: PitGuru.com
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The Financials Pit Review
By PitGuru Kalvin O’Brian |
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U.S. Economy
After rallying off a better than forecast jobs report and the $23 billion takeover of Wm. Wrigley Jr. Co the S&P appears to be headed below the 1400 mark. Selling pressure comes in early due to Microsoft’s abandonment of its bid for Yahoo which sent the internet behemoth’s stock lower and also Berkshire Hathaway’s reported earnings coming in below analyst’s estimates. The Federal Reserve announced that it was acting in coordination with the ECB to expand credit and will increase the emergency reserves it offer to banks to $150 billion in May. Retailers are anxious to get their piece of the stimulus checks that started landing in consumer bank accounts to end April, but the general belief seems to be that people will be using most of that to being relief, not stimulus, and retailers who put the cart before the horse on their estimates will be setting up for disappointment. The long road ahead of us will be bumpy and I am looking at last week as a blip on the screen and the markets will find little support when fear returns.
Currencies
The euro bounced back from its two day decline as traders gamble the ECB will keep interest rates at a six year high this week in its effort to fight inflation. On April 29th, the European Commission said that his year will be the tenth straight year inflation will exceed the central banks ceiling of 2%. However technically the 15- nation currency is poised to fall as its daily moving average convergence/divergence chart is showing a sell sign. The Australian and Canadian dollars are poised for advance as commodity prices rebound from last week’s sell off. Canada’s dollar looks to maintain resiliency, at least until the Bank of Canada shows signs of additional rate cuts, as the Canadian economy looks stronger than the U.S. at the moment. Forgetting that the U.S. is the destination for most of their exports, the strength in this currency gives us the opportunity to pick up some puts.
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The Softs Pit Review
By PitGuru Jamie Fink |
Positive economic news and a strengthening dollar brought a lot of selling pressure to commodities last week. Noted rains in major cocoa producing countries also sent longs packing as the mid-crop might get a boost from the moisture. It might be too early to celebrate as there is still a forecast for deficit in the world cocoa supply and since the mid-crop has been questioned for quality lately, this recent sell-off might present us with an excellent entry opportunity for a long position in cocoa. Premium subscribers check for this incredible trading opportunity in my instant messenger alerts this week!
Coffee fared little better than cocoa, staying in the low range of the recent channel. This sideways trading may continue as we are almost a month away from the official start of the Brazilian coffee harvest and uncertainty after the decline in Vietnamese exports. Agriculture Ministry officials in Vietnam have also asked provinces to refrain from expanding coffee growing areas until 2010. This brings some uncertainty to the overall supply picture and if the dollar displays any weakness, we should be back to the top side of this trading range.
Bearish news for the Florida orange crop continues to pair with weak demand on the retail side to bring selling pressure to orange juice. Although the peninsula state is a major U.S. source for the breakfast beverage, Brazil is still tops in the world and a recent statement by their state Agriculture Secretary regarding a reduced forecast for the Sao Paulo crop might bring the bulls back. The drop in orange output is being blamed on dry weather and since Sao Paulo is the source for over 90% of Brazil’s orange juice, all eyes will be on the official estimate which is likely to be released on Thursday.
Sugar remains under selling pressure and has little in the way of bullish fundamentals although strong crude oil prices to end the week might bring some interest to this embattled market. Cotton still feels like a sleeper as weather issues and planting reductions could keep us poised for a nice rally.
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The Metals Pit Review
By PitGuru Frank Martin |
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There was strength in the U.S. dollar last week and that sent gold back down below $900 to end the week. A deadly accident in a South African mine and people looking for a bargain entry price in this market kept a large selloff from coming and ultimately this market should hold these levels. The inflation risk continues to be there and as long as there are doubts about the U.S. economic situation, people will want to be long gold. Silver rode the same selling last week and continues to look more vulnerable to strength in the U.S. dollar. Silver demand in India may increase on lower prices, but this metal has an overall bearish look to it. Possible higher mine output and increases in Peru, Mexico, Australian and Canada as forecast in the CPM yearbook could keep silver from running up.
Platinum and palladium both fell against the stronger dollar last week but look to recover as the lower output from mines keeps traders long platinum. Substitutive palladium keeps pace with platinum but as the less expensive option for the auto industry. Copper fell sharply to end the week but looked to push higher as the mining strikes in Chile keep this market up. This should be short lived as any break in the strike will bring people back down to earth. The latest ICSG forecast calls for a small surplus of this metal this year and noted that 2007 production was up 3%. This market is due for a correction and we want to be there when it happens……. Premium subscribers check for this incredible trading opportunity in my instant messenger alerts this week!
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The Grains Pit Review
By PitGuru Matthew Pierce |
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If grains news like this is important to you, Premium Subscribers receive market reports like this on a regular basis. To find out more about being a subscriber, click here!
Pre Report Estimates:
2008-09
2007
Average Range Production
All Wheat (10) 2.298 2.171-2.400 2.067
All Winter Wheat (14) 1.701 1.595-1.750 1.516
Hard Red Winter (14) 0.964 0.896-1.000 0.962
Soft Red Winter (14) 0.519 0.370-0.552 0.358
White Winter (13) 0.222 0.202-0.250 0.197
Hard Soft
All All Red Red White
Wheat Winter Winter Winter Winter
ADM Investor Services 2.400 1.750 1.000 0.530 0.220
Agrivisor n/a 1.731 0.989 0.552 0.220
Alaron n/a 1.595 0.975 0.370 0.250
Allendale 2.280 1.667 0.945 0.506 0.216
Citigroup 2.230 1.644 0.909 0.533 0.202
Farm Futures 2.232 1.642 0.896 0.547 0.226
Fortis n/a 1.740 0.985 0.530 0.225
Informa* n/a 1.747 0.990 0.535 n/a
Iowa Grain 2.310 n/a n/a n/a n/a
Kropf/Love 2.300 1.715 0.975 0.525 0.215
N Am Risk Man. 2.311 1.711 0.945 0.540 0.225
Newedge USA LLC 2.301 1.681 0.951 0.500 0.229
Prudential Bache 2.325 1.717 0.983 0.520 0.215
Risk Man Commodities 2.171 n/a n/a n/a n/a
RJ O'Brien n/a 1.728 0.982 0.526 0.220
Wachovia Securities 2.350 1.750 0.975 0.550 0.225
2007-08
April
2007-08 2006-07
Average Range USDA USDA
Corn (16) 1.320 1.240-1.434 1.283 1.304
Soybeans (16) 0.152 0.130-0.160 0.160 0.574
Wheat (14) 0.243 0.232-0.257 0.242 0.456
Corn Soybeans Wheat
ADM Investor Services 1.333 0.145 0.242
Alaron 1.240 0.148 0.242
Allendale 1.332 0.130 0.232
Citigroup 1.333 0.160 0.242
Farm Futures 1.330 0.159 0.250
Fortis 1.333 0.150 0.242
Iowa Grain 1.333 0.160 0.242
Kropf/Love 1.283 0.160 0.242
Midco 1.313 0.150 n/a
Midwest Mkt Sol 1.284 0.158 0.242
N Am Risk Man. 1.383 0.160 0.257
Newedge USA LLC 1.333 0.145 0.242
Prudential Bache 1.283 0.150 0.242
Risk Management Com 1.434 0.140 0.243
STA Trading Srv 1.283 0.150 n/a
Wachovia Securities 1.283 0.160 0.242
2008-09
2007-08
April
Average Range USDA
Corn (16) 0.707 0.481-1.114 1.283
Soybeans (16) 0.273 0.158-0.352 0.160
Wheat (13) 0.424 0.280-0.501 0.242
Corn Soybeans Wheat
ADM Investor Services 0.700 0.290 0.500
Alaron 0.750 0.310 0.280
Allendale 0.481 0.345 0.392
Citigroup 1.114 0.315 0.363
Farm Futures 0.907 0.200 0.380
Fortis 0.950 0.275 0.500
Iowa Grain 0.520 0.158 0.501
Kropf/Love 0.601 0.264 0.447
Midco 0.722 0.228 n/a
Midwest Mkt Sol 0.578 0.334 n/a
N Am Risk Man. 0.578 0.290 0.454
Newedge USA LLC 0.670 0.290 0.440
Prudential Bache 0.825 0.275 0.441
Risk Management Com 0.782 0.352 0.363
STA Trading Srv 0.616 0.200 n/a
Wachovia Securities 0.521 0.240 0.450
Disclaimer: Past performance is not necessarily indicative of future results. The risk of loss exists in futures and options trading
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Kalvin O’Brian
(S&P and Currency trader),
Matthew Pierce (Grain Floor
Trader), Joe Marshall (Energy
Option Broker), Jamie Fink (Softs
Industry Insider), & Frank Martin
(Metals Trader) are the Gurus for
the Weekly Pit Review published by
www.PitGuru.com. |
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