MARKET WRAP – STOCKS SURGE AGAIN

Stocks rallied 0.65% on the day despite some weaker than expected data.  The market was flat all day before a flurry of buy orders hit the tape at 2:2oEST and drove prices up in a matter of minutes.  This market continues to trade in very thin volume on positive days as less than 1B shares traded at the NYSE.  Breadth was strong once again at 2:1 though this is a bit weaker than it has been in recent days.   The markets are now sitting just below their 50DMA so investors could be cautious in the days ahead.

From Daily Futures:

Corn, wheat, and soybean prices are currently below their 100-day averages, but May soybean oil is holding above its 100-day average – an interesting sign of strength

U.S. Economy
The U.S. Labor Department said that jobless claims were up 31,000 last week to 473,000, more than expected. The March 2011 eurodollars were down .02 at 98.675.

The Labor Department also said that the producer price index was up 1.4% in January and up 4.6% from a year ago, more than expected.

The Conference Board’s index of leading indicators was up .3% in January, not as strong as expected.

The Philadelphia Federal Reserve’s regional index of manufacturing increased from 15.2 to 17.6 in January, better than expected. The March U.S. T-bonds closed down 20/32nds at 116.06/32nds, the lowest close in five weeks.

Grains and Cotton
May corn ended down 2.75 cents at $3.69 with talk that Argentina’s corn crop may be bigger than expected.

At today’s annual USDA Ag Forum, Chief Economist Joe Glauber said that corn plantings will increase 3% this year, soybean plantings will be down slightly, wheat plantings will be down 9%, and cotton plantings will be up 13%. May cotton closed up 2.02 cents at a new contract high of 78.13, still supported by this last Tuesday’s reduction in the U.S. ending stocks estimate.

Livestock
The U.S. Meat Export Federation said that total beef exports were up 9% in December from a year ago and down 9% for all of 2009. April cattle closed up .90 at 93.05 ahead of tomorrow’s monthly on-feed report.

The U.S. Meat Export Federation said that total pork exports were up 8% in December from a year ago and down 9% for all of 2009. April hogs closed up 1.07 at 70.27, the best finish in three weeks.

Cocoa
May cocoa ended down $3 at $3,091 with reports of protesters blocking roads after President Gbagbo dissolved the nation’s government last Friday.

Metals
The International Monetary Fund said that it will soon start selling 191.3 tons of gold in the open market, spread out over time. Some are disappointed that central banks have not shown more buying interest. April gold ended down $1.40 at $1,118.70.

Energies
The U.S. Department of Energy (DOE) said that crude oil supplies were up 3.1 million barrels last week to 334.5 million barrels. Supplies of gasoline were up 1.7 million barrels and heating oil supplies were down 1.4 million barrels. April crude oil finished up $1.69 at $79.42, the highest close in four weeks.

The DOE also said that refinery use inched up from 79.1% to 79.8% last week. Over the past four weeks, gasoline demand was down 1.3% from a year ago while distillate demand was down 7.4% from a year ago.

The U.S. Department of Energy said that underground supplies of natural gas were down 190 billion cubic feet last week to 2.025 trillion cubic feet. Supplies are now up 1% from a year ago. April natural gas fell 19.9 cents to $5.164.

Currencies
The Bank of Japan met and kept its interest rate unchanged at .1%, as expected, but offered no new measure to correct the deflation problem. The March yen started the day higher, but closed down .0023 at 1.0951.

Japan’s Cabinet Office said that its coincident composite index was up 1.4 in December to 97.4, the ninth consecutive monthly gain.

Statistics Canada said that the consumer price index was up 1.9% in January from a year ago, the biggest annual increase since November of 2008. The March Canadian dollar closed up .42 at 96.15.