For a change, fundamentals actually seemed to be behind pricemovements at the New York Mercantile Exchange on Monday. The spotApril contract gained 4.0 cents to $2.169 yesterday, as a blast ofwinter temperatures propelled cash market prices up 5-10 centsacross much of the country.

Despite the rise, a Chicago based marketer expects the futuresadvance to be short lived. “No one thought it would get this cold,especially in the South. But this is nothing more than a short termpop with the weather. Even though forecasters are calling foranother cold front next week, traders appear to have far lessconfidence in that model. Cash prices should fall back later thisweek,” he predicted.

Also significant is the fact that April fell 0.5 cents shy ofmoving above its major resistance level at $2.19. That showsspeculators have little faith in these current fundamentals, atrader said. “Speculators have been driving April almostexclusively, so if they’re not going to push April aboveresistance, no one is going to,” he continued.

For that reason, the trader expects April to fall back somewhattoday, although he feels current cash market prices “will likelykeep April from falling too much. We will probably see a very tightrange, perhaps $2.12-19, until at least Wednesday evening,following the next AGA storage report,” he said.

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