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Jim Wyckoff's Morning Report: Traders Await Outcome EU Central Bank Meeting

02 May 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Traders and investors were awaiting the outcome of the European Central Bank meeting Thursday to discuss EU monetary policy.

Many had expected the ECB to cut its key interest rate by 0.25%, to 0.5%, which is precisely what the ECB did Thursday. Recent weak EU economic data made the case for such action.

Just Thursday it was reported that Euro zone manufacturing activity in April declined. The Markit
manufacturing gauge came in at 46.7 in April compared to 46.8 in March. A number below 50 indicates a month-to-month decline in manufacturing activity.

Traders and investors will also be scrutinizing comments from ECB president Mario Draghi at this monthly press conference following the ECB meeting. In Asian news overnight, the HSBC China
manufacturing PMI came in at 50.4 in April versus 51.6 in March.

This reading follows the official China government PMI reported Wednesday, which was also down from the previous month. The weakening China PMI data this week has been a bearish weight on the raw commodity sector, including the precious metals, as it suggests less demand from the
world’s largest consumer of raw commodities.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Challenger job cuts report, the international trade report, the New York ISM report on business, and the global manufacturing PMI. -Jim

US Dollar Index

The U.S. dollar index is higher in early U.S. trading and is seeing a corrective bounce after prices hit a nine-week low on Wednesday. The bulls have faded badly recently. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 81.830 and then at 82.000. Shorter-term support is seen at the overnight low of 81.640 and then at Wednesday’s low of 81.370. Wyckoff's Intra Day Market Rating: 6.0

NYMEX Crude Oil

Crude oil prices are firmer early today on a corrective bounce from this week’s strong selling pressure. Bears still have some downside momentum on their side. In June Nymex crude, look for buy stops to reside just above resistance at $92.00 and then at $92.50. Look for sell stops just below technical support at $91.00 and then at the overnight low of $90.65. Wyckoff's Intra-Day Market Rating: 5.5


Markets were higher in overnight trading, on a corrective rebound from selling pressure seen Wednesday. Rains and cold temperatures in the forecast for the U.S. Corn Belt in the coming days are bullish for corn, which in turn is the leader of the grains complex, at present.

Wheat bulls still have some upside near-term technical momentum on their side. The U.S. hard red winter wheat crop is in bad shape.

Meantime, light farmer selling in the U.S. cash market supports soybean futures prices. Grain traders will closely examine Thursday morning’s weekly USDA grain export sales report.

TheCropSite News Desk

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

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