The futures market concluded the week on a quiet note Friday asneither bulls nor bears were able to influence a move in theirfavor. After a lower open the November contract quickly filtereddown, filling in the chart gap to $2.35. But the $2.35 level held,and the market was left to trend higher into the closing bell. TheNovember contract settled at $2.432, a 1.8-cent gain on the day.
Looking ahead to trading this week, opinions vary as to wherethe market is headed. Technical bulls point to the market’s abilityto trade higher throughout the month of September as a positivefeature. But fundamental bears feel the market’s recent advancesare a bit overdone in the face of the plentiful supply situation.
A California marketer remains bullish in the long-run, butadmits the market could be in for a pullback this week. He remainsa buyer, however, and targets the $2.20 level basis November as an”opportunity to buy on weakness rather than on strength.” The $2.20level is the 50% retracement level for October’s $2.75 high and$1.63 low, he explained.
Tom Saal of Miami-based Pioneer Futures admits the market couldtest the upside again early this week but feels that range-boundtrading is a little more likely until fundamentals become moreevident. “This market and St. Louis have one thing in common, theyare both in the ‘Show Me’ state. Futures are in a very pivotalposition, having moved up so far so fast. Futures are looking forconfirmation from either the weather or the cash market. Cash istrading at a hefty discount to futures, and I’d say that if cashdoesn’t close the gap by moving higher, then futures could comeunder some downward pressure.”
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