Technical Corner : Gold

Submitted by Travis

For this week’s technical corner we’re going to take a look at gold futures.  Recently, gold has come under selling pressure as investors sold their long gold positions in exchange for riskier assets as the European and American economies begin to show some stability.  This has caused August gold to fall more than $100 per ounce since the highs posted on June 28th.  On Tuesday, we saw the yellow metal breakout below significant support from May 21st at $1172.30.  This coupled with Tuesday’s close below the 100 day moving average open the door for an eventual test of $1100.  Therefore, traders should look to sell gold futures near $1165 looking for a test of $1100 over the next couple of weeks.  Currently, first support is seen at $1147.10 (the 200 day moving average) and $1130.60 with resistance at $1172.30 and $1182. 
 

MARGINS & EXPIRATIONS

Submitted by Amy

First Notice Day

Jul 29 – Aug ICE Ht Oil, Nat Gas, RBOB/NY Nat Gas
Jul 30 – Aug Copper/NY Gold, Silver, Platinum & Palladium/Soybeans/Soymeal/Soyoil
Aug 3 – Aug NY Ht Oil & RBOB

Last Trading Day

Jul 28 – Jul Copper/NY Gold & Silver/ NY Platinum & Palladium   Aug NY Nat Gas
Jul 29 – Jul Hang Seng/ Milk         Aug ICE Ht Oil, Nat Gas, RBOB
Jul 30 – Jul Fed Funds/ Ldn Coffee/ TOCOM Crude Oil     Aug Brazilian Real/ NY Ht Oil & RBOB/ SICOM Rubber

Last Trading Day Options

Jul 29 – Jul Hang Seng/ Milk
Jul 30 – Jul Fed Funds     Aug Brazilian Real/ Euro Bobl/ Euro Bund/ Euro Schatz/ Lumber/ SGX,TSE JGB/TOCOM Gold

Contract Specifications & Margin Requirements

ENERGIES : Crude

Submitted by Travis

Crude oil futures came under selling pressure on Tuesday as weak US consumer confidence weighed on the market.  September crude futures settled $1.48 lower at $77.50 on the NYMEX.  An early report from the Conference Board Inc. on monthly consumer confidence showing a larger than expected drop was viewed as the catalyst for crude’s drop.  Recently, crude prices have been strong as firm US economic reports had investors betting that improvement in the economy would increase the overall demand for energy products.  However, Tuesday’s consumer confidence report caused some traders to book profits on concerns that demand may not be as strong as previously expected.  In addition, a slightly higher US dollar and a lack of direction in equity prices failed to underpin oil prices.

ENERGIES : Energy Stocks Estimates

Submitted by Travis

FINANCIALS : Stocks: Earnings Help, Economy Hurts

Submitted by Roni

NEW YORK (CNNMoney.com) -- Stocks churned Tuesday, losing steam after a three-session run, after a big drop in consumer confidence offset better-than-expected profit growth from DuPont, UBS and others.

The Dow Jones industrial average (INDU) added 12 points, or 0.1%. The S&P 500 (SPX) lost just over 1 point. The Nasdaq (COMP) composite lost 8 points, or 0.4%.

Consumer confidence declined in July, according to the Conference Board's closely watched index, which fell to 50.4 from an upwardly revised 54.3 in June. Economists surveyed by Briefing.com thought the index would decline, but only to 51. The report served to underscore the weak outlook for consumer spending heading into the fall, and caused stocks to erase early gains.

"The consumer confidence index was below expectations but not surprising," said David Chalupnik head of equities at First American Funds. "We had a down market in May, June and early July, and that weighs on consumer spending and confidence."

Better-than-expected results from a number of companies had propelled markets in the morning, extending the recent rally. But that advance lost steam, with technology and consumer stocks hit the most.

BP: BP posted a huge quarterly loss of $17.2 billion due to costs connected to the Gulf of Mexico oil spill. The company also said that British CEO Tony Hayward will be replaced by American Robert Dudley Oct. 1. BP (BP) shares fell 2%.

Housing: The Case-Shiller 20-city home price index rose 1.3% in May versus April and up 4.6% from a year earlier, suggesting pricing has stabilized.

World markets: European shares rose. The CAC 40 in France gained 0.8%, Germany's DAX rose 0.2% and the FTSE 100 added 0.3%.

Asian markets finished mixed. Japan's benchmark Nikkei index edged down 0.1% and the Hang Seng in Hong Kong ended 0.6% higher.

Currencies and commodities: The euro fell against the dollar, while the U.S. currency gained versus the Japanese yen.

Bonds: Treasury prices fell, and the yield on the 10-year note climbed to 3.04% from 2.99% late Monday. Bond prices and yields move in opposite directions.

GRAINS : Soybeans, Corn, & Wheat

Submitted by Brian

Soybean futures slightly lower Tuesday, as favorable crop conditions served as bearish news to erase an early bounce. The absence of near-term weather threats to crops heading into their key development phase set the stage for sellers to take advantage of an initial bounce in prices. The market has essentially drawn the conclusion that the US soybean crop is going to be fine, as steady crop ratings and no threat of drought in key Midwest growing areas dampen bullish enthusiasm. The potential for timely rains to reach parched areas in the US Delta added to the negative pricing. However, bullish traders are hanging on to oversold market conditions and the uncertainties of a long growing season, with soybeans' key pod filling still ahead.

Corn futures lacked fresh news and traders were unwilling to take a direction, giving way to a choppy trading session. Favorable crop weather gave the market its lower close. The market grinded lower and tested yesterday’s low at $3.76. This bottom failed to attract enough buyers to give the market any chance of going positive. The potential for record crop production continues to keep pressure on the market. Without a significant weather threat, rallies were met with selling pressure, as good conditions for developing crops and only routine demand failed to prompt buyers. Farmer selling added to the market's setback, as the market viewed the session's initial gains as more of a technical bounce than any fundamental change. However, bullish traders are finding some underlying support for the potential for bad weather or diseases to still emerge with a third of the growing season still ahead. Talk around of higher corn demand ahead due to higher wheat prices. March corn calls need to be monitored for potential spring rally.

Wheat futures closed modestly higher on projections that a drought in Russia may shift demand to the US. Spillover strength from a rally near two-year highs in European wheat futures added support as traders worried severe dryness in the Black Sea region may have cut export potential more than previously thought. Reduced exports from countries like Russia and Kazakhstan could open the door for more sales by the US and Europe because they are competitors in the global market. The US still has plenty of wheat to meet demand. Ending stocks for 2010-11 are pegged at a 23-year high. Commodity funds bought an estimated 4,000 wheat contracts at CBOT.

GRAINS : Crop Progress for the Week Ending July 25, 2010

Submitted by Brian

Corn

• Conditions 72% good to excellent vs. 72% a week ago and 70% a year ago expecting unchanged to up 1% from last week
• Silking 84% vs. 65% a week ago and 70% 5 yr average
• Doughing 17% vs. 8% last week and 13% 5 yr average

Beans

• Conditions 67% good to excellent unchanged from a week ago and unchanged from a year ago expecting unchanged to up 1% from last week
• Blooming 75% vs. 60% a week ago and 72% 5 yr average

Spring Wheat

• Conditions 83% good to excellent vs. 82% last week and 74% last year
• Headed 94% vs. 87 % last week and 97% 5 yr average

Winter Wheat

• Harvested 79% vs. 71% a week ago and 82% 5 yr average

Rice

• Condition 73% good to excellent vs. 75% a week ago and 62% a year ago
• Headed 52% vs. 37% a week ago and 32% 5 yr average

Cotton

• Condition 68% good to excellent unchanged from last week and vs. 46% last year
• Squaring 94% vs. 86% a week ago and 87% 5 yr average
• Setting Bolls 58% vs. 41% a week ago and 48% 5 yr average

METALS : Gold

Submitted by Travis

HEDGE RECOMMENDATIONS

Submitted by Kurt, First Capitol Ag - 888-747-0843

Dear Producers,

We wanted to share some great audio from Mike Rowe of the Discovery Channel regarding agriculture.  In our opinion, this is a very well thought out piece. Enjoy!

Here is the link:
http://www.mikeroweworks.com/_vids/FFA-letter.mp3