What a difference a week can make. Bull traders, nearly ready tothrow in the towel a week ago, have become “cautiously optimistic”higher prices are in their future. And they have good reason tofeel that way because the market entertained a flood of positivenews last week, which gave bulls and bears alike little choice butto bid the market higher. The April contract broke above the 40-daymoving average at $1.80 on Friday and was propelled 5 cents higherby speculative fund buying to finish the day up 9.8 cents at$1.853. Volume was a heavy 108,348. For the week, April gained 22.5cents.

The CFTC’s last Commitments of Traders Report on Feb. 26 showednon-commercials (fund groups) were short more than 30,000 in openinterest as of Feb. 23. The stronger cash prices last week,combined with AGA’s report of a heavy storage withdrawal and thetimely cold spell apparently were enough to trigger the classicshort covering move Friday by the funds.

Sources were quick to point to cash prices, which ratcheted upseveral notches Friday in response to weather demand, as acontributing factor to the futures market advances. One Houstonmarketer thinks the real test for this market will come Monday. “Wewill have a much better idea about the duration and severity of thecold front forecast to hit the middle of [this] week.”

Words like “duration” and “severity” have not found their wayinto many weather forecasters’ vocabularies this winter, but JeffManna of Omaha-based Strategic Weather Services thinks that isabout to change. “We have seen a dramatic shift in the overallweather pattern over the past week and a half. Most of the winter,the U.S. has experienced a zonal or flat jet stream, which has keptArctic air up in Canada. Now, however, the jet stream is troughing,tapping into a flow of cold air to come down out of the centralCanadian provinces.”

And how long will the below normal temperatures in the Easternhalf of the country last? Manna suggests that after a short warm-upearly this week, the East Coast could be in for a prolonged periodof temperatures five to 15 degrees below normal. “We are showingthis weather pattern to be with us at least through March 20, andpossibly extending through the rest of the month,” he continued.

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