Good Morning, to put it plainly THE RALLY CONTINUES. An explosion higher late last week continued overnight with wheat moving almost 30 higher dragging the rest of the floor with heavy gains in OI seen in the big three. There remains very little fresh news with Russian and Chinese weather the only fundamental driving forces. The gains in commodities as a whole are thought to be the driving force with global inflation talk growing by the day. This was started by Jim Rogers late last week. The US may not be a participant in the drought rally but as I have recently learned, the US does not need to be involved. This proves how global the market has become. Key technical levels gained overnight leave the door open to an extended rally as beans are now targeting $11.00, corn targeting $4.50 and wheat possibly reaching the 2008 weekly high at 932. I don’t see it but I have to offer this information. There is little to back up the rationale of the rally with an independent think tank in Russia pegging their crop at a 72-78 MMT leaving a solid 14-15 MMT for export. The actual reasons for the rally do not matter, all that matters is that it is on. I have to follow it until I see definitive signs of weakness which will come from OI and outside markets alone.
Looking at weather, the US is not in any real danger. There is a small heat bloom but this is not really threatening in that there has been ample moisture offering plenty of room for heat. The real weather problems, if you want to call them that, exist in Russia/Ukraine with heat persisting and no relief for 8-10 days out. There are scattered showers expected at that time. In China, the North central growing region remains hot and dry with only scattered showers seen and more necessary to counter heat stress.
Learn more about Grain Futures in Markets...
Precious metals got liquidated last week, especially in the gold market as prices broke the support of $1,180 on the downside to trade at $1,157 in the Aug contract, but recently bounced to $1,180 to close out the week on value buying. Silver for immediate delivery increased 0.8 percent to $18.065 an ounce, platinum advanced 1 percent to $1,587.95 an ounce, while palladium was little changed at $497.25 an ounce. It does seem that silver is taking charge of this market rallying back up to $18 after the sell off as this looks to be the leader right now. This market got some of the longs spooked out a bit but I still believe gold will try and head higher this week as the Euro makes another monthly high against the USD trading above $1.3080. There is some serious resistance at $1.3110 in the Euro and if this market gets above that I think the prices of the precious metals will rise.
Copper has been on absolute fire and is still making a charge to the upside as Sep now trades at $3.35, breaking the significant resistance of $3.28. This market got a boost with home sales last week and has continued to shine, in line with the equity markets. Copper has risen +40 cents in the last two weeks, and although I think there should be some profit taking in this market, it just seems like the bulls want to push it higher. $3.42 is the next resistance I see here, and I believe this could be obtained this week.
Learn more about Silver Markets and Metal Price....
Looking at weather, the US is not in any real danger. There is a small heat bloom but this is not really threatening in that there has been ample moisture offering plenty of room for heat. The real weather problems, if you want to call them that, exist in Russia/Ukraine with heat persisting and no relief for 8-10 days out. There are scattered showers expected at that time. In China, the North central growing region remains hot and dry with only scattered showers seen and more necessary to counter heat stress.
Learn more about Grain Futures in Markets...
Precious metals got liquidated last week, especially in the gold market as prices broke the support of $1,180 on the downside to trade at $1,157 in the Aug contract, but recently bounced to $1,180 to close out the week on value buying. Silver for immediate delivery increased 0.8 percent to $18.065 an ounce, platinum advanced 1 percent to $1,587.95 an ounce, while palladium was little changed at $497.25 an ounce. It does seem that silver is taking charge of this market rallying back up to $18 after the sell off as this looks to be the leader right now. This market got some of the longs spooked out a bit but I still believe gold will try and head higher this week as the Euro makes another monthly high against the USD trading above $1.3080. There is some serious resistance at $1.3110 in the Euro and if this market gets above that I think the prices of the precious metals will rise.
Copper has been on absolute fire and is still making a charge to the upside as Sep now trades at $3.35, breaking the significant resistance of $3.28. This market got a boost with home sales last week and has continued to shine, in line with the equity markets. Copper has risen +40 cents in the last two weeks, and although I think there should be some profit taking in this market, it just seems like the bulls want to push it higher. $3.42 is the next resistance I see here, and I believe this could be obtained this week.
Learn more about Silver Markets and Metal Price....