EU faces fight with 'critically low' sugar stocks

by Agrimoney.com

High grain prices look set to stymie European plans for a rebound in sugar production, leaving the region reliant on record imports – if it can get hold of them – to replenish inventories on their way to the lowest in at least 50 years.

Grain has become a "tough competitor for high cost, high risk" sugar beet plantings in the European Union thanks to the improved returns on offer, and growers' dismal experience this season, when 2m tonnes of the root crop were lost to weather damage in the UK alone.

"European Union sugar processors are asking sugar beet growers they contract with to increase acreage by at least 10-15% for the 2011 harvest, but it can be doubted whether farmers will follow suit," US Department of Agriculture attaches said in a report.

"Farmers may resist increasing their harvest risk without receiving adequate compensation in their contractual arrangements."

The attaches estimated at just 1.4%, or 209,000 tonnes, growth in EU beet sugar production in 2011-12, taking it to 15.3m tonnes.

'Critically low supplies'

This will be way short of the amount need to meet consumption, and replenish "critically low" supplies weakened by last year's poor harvest and the difficulty in wrenching imports from a tight international market.

Indeed, EU inventories are expected to end 2010-11 at 1.13m tonnes, the lowest since at least 1960 and representing a stocks-to-use ratio of a thin 6.1% - half that of a year before.

The attaches, terming Europe's sugar squeeze "unprecedented", forecast imports hitting an all-time high of 3.7m tonnes next season to replenish stocks and avoid the kind of shortages which have forced supermarkets in Portugal to limit customers' sugar purchases.

However, it highlighted the difficulty that the EU has had in buying in foreign sugar, despite the announcement of a zero-duty quota.

"High world prices for sugar continue to have a negative effect on sugar imports, despite the temporary lifting of the EU import duty," the report said.

Longer season

The EU has, besides facilitating sugar imports, pre-announced 650,000 in exports for 2011-12 in an attempt to reassure beet farmers that the region will not put block off the region's market from potentially higher international prices.

However, beet farmers are being deterred by a knock-on effect from the imposition of tough sugar market restrictions in the last decade, agreed with the World Trade Organization, following complaints over cheap EU sugar exports.

A shutdown of production facilities has increased the beet processing season to 100-105 days, extending the period to which crops are exposed to winter weather.

An extra 10-15% increase in output implying a rise in the processing season to 110-120 days.

"Sugar beet farmers were already complaining that a 100-day processing season creates an unacceptable level of risk on them.

"It can hence be seriously questioned whether beet farmers will be willing to increase their risk, especially in light of a market situation, in which grain production is almost guaranteed to bring higher profits to the farm."

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Has the missing link in the US feed chain been found?

by Agrimoney.com

Have analysts found the missing link to US animal feed supply chain?

The market has been puzzling over how livestock farmers will keep their animals fed since the US Department of Agriculture on April 8 cut its estimate for American feed usage of corn in 2010-11 by 50m bushels.

This despite data implying that America consumed a record 7.2bn bushels in the first half of the crop year – with much of the increase assumed down to animal feeding fostered by record cattle and hog prices, which are allowing livestock farmers to cash in even while paying elevated prices for grain.

"Cattle on feed in February increase 5% year on year, the poultry industry continues to grow at a pace of 2% year on year, and hogs kept for the breeding increased for the first since 2008-09," Rabobank said.

If the USDA is right, overall corn consumption plunge to 4.4bn bushels in the second half of the crop year, the biggest drop for nearly 20 years, with livestock farms expected to bear the brunt of the decline.

Analysts have come up with three answers so far for filling the apparent hole in feed supplies.

Damn lies and statistics

The first is to doubt the USDA forecast, which is predicated on an idea of US corn stocks ending the year at 675m bushels – way above market expectations.

Goldman Sachs on Friday became the latest in a series of commentators to question an inventory figure branded "a joke" by one commentator.

"While the USDA continues to report stabilisation in old-crop inventories at low levels, strong near-term demand, especially for corn from exports, feed and ethanol, points to further declines in inventories," Goldman said.

Informa Economics on Wednesday, in the first estimate from a major analyst since April 8, pooh-poohed the USDA figure, pegging year-end stocks at 575m bushels.

If correct, that would allow some loosening of the supply corset. Especially when combined with supplies rushed to feedlots and hog farms from the early corn harvest, which starts before the 2010-11 year finishes in August.

Big saving

The second answer is to take the USDA's own assessment on board.

The department believes that soft red winter wheat, which is already in decent supply and for which an abundant harvest is expected, will take over from corn in animal feed.

That certainly makes financial sense.

At prices as of Wednesday's close, livestock farmers buying wheat would save $0.70 a bushel, using 100 pounds of the grain to replace 92 pounds of corn and eight pounds of soymeal, according to a report by Paragon Economics and Steiner Consulting.

Not so easy

The trouble is that switching over from corn to wheat is not as simple as it might appear.

"To include a new feed requires more than just replacing corn with wheat, it requires a change of the entire feeding regimen, the feed also needs to be handled differently and may require additional work," the groups said.

"It takes time to transition cattle into a ration that contains wheat. Some of the research we have seen recommends a transition period between 30-45 days," they added, noting that wheat's high starch content "causes digestive problems".

For poultry farmers, meat attributes such as fat colour may be an issue for customers used to, for example, corn-fed chicken.

"We will likely see some wheat feeding. But we think that this will not be as quick to implement as some may think," the groups concluded.

Missing link?

So can a byproduct of ethanol plants square the circle?

Dried distiller's grains, or DDGs, have a lower starch content than wheat. They do not need to be processed or ground to put into a feed rations. And, while their supplies are less closely monitored than those of the main grains, they are undoubtedly increasingly available, thanks to the growing proportion of US corn, nearly 40%, going to make ethanol.

The USDA itself highlighted the "substantial" rise in "available supplies of feed byproducts" prompted by use of corn in biofuel plants.

Nearly 30m tonnes of DDGs will be available in 2010-11 for domestic US feed use – double that five years before - according to Australia & New Zealand Bank.

Adding this to corn supplies, as proposed by the USDA, "leaves the animal feed sector with 1% greater feed rations for 2010-11" than in 2009-10.

Combined with a switch to soft red winter wheat, "these factors could well mean more downside risks already exist to 2010-11 corn animal feed usage", ANZ said.

Two birds, one stone

It's an attractive idea, and not just for livestock farmers.

The ethanol industry is attempting to deflect criticism over levels of crops used in biofuels by highlighting its DDG production, and indeed won a concession last week over its labelling by the USDA.

And DDGs do have potential for taking up a bigger proportion of feed rations. Canadian hog farms are using DDGs at up to 40% in feed rations, according to the US Grains Council.

US cattle farmers can use it at rates of 35%, according to Steiner Consulting.

Fear of the new

However, there is still the problem that animals tend do better if kept on a constant diet.

"And there is the matter over whether farmers are happy to use it," Steiner analyst Alton Kalo told Agrimoney.com.

"They need to be comfortable with handling it, and may be reluctant to start using something new."

Especially, after all, when live cattle are worth approaching 120 cents a pound on the Chicago futures market, and lean hogs more than $1 a pound too.

Only time may provide the answer as to how US animals get fed this summer.

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Why We Are Totally Finished, Corporatocracy Has Replaced Capitalism

By: D_Sherman_Okst

Capitalism Fixes Problems & Preserves Democracy: Capitalism is what we should be relying on to fix our problems. Capitalism has it's own ecosystem, just like biology's ecosystem. An economic ecosystem that weeds out the weak, has parasites that eat the failures and new bacteria that evolves and grows replacements for that which failed. A system that keeps everything in balance.

The problem is we are no longer a capitalistic society. What we were taught in school is now utter and absolute nonsense. Capitalism is a thing of the past.

As outlined in "It's Not A Financial Crisis - It's A Stupidity Crisis", we created two back to back bubbles. The air out of the Tech Bubble was sucked up for fuel by our next stupidity crisis: The Housing Bubble.

Now, after the second Stupidity Crisis there isn't a third bubble to inflate. If we still lived in a capitalistic environment the banks and financial institutions that created loans for folks who should have remained renters and then sold those loans as investments to pensions and countries would have been cleansed by capitalism's ecosystem.

But that isn't what happened.

In a very anti-capitalistic move the government decided that stupidity and criminal activity should be rewarded. I'd say they took our money, but it is worse, we didn't have that much money. So they borrowed the money in our name. The loan has a variable rate. They borrowed so much money that our kids cosigned the loan. In fact, our kid's future kid's signed on the dotted line.

That is unequivocally immoral.

They gave that borrowed money to a bunch of morons as a reward for stupidity. Morons who created subprime loans, liar loans, no income no documentation loans and other fraudulent instruments. Morons bundled that trash, got it rated AAA and then sold these turds or weapons of mass destruction that they had the audacity to name complex financial instruments or derivatives to pension funds, countries and other "investors".

Then it all blew up.

Big surprise.

For blowing up the world's economy this Stupidity Crisis was falsely named an Economic Crisis by CNBC and 535 morons on a hill in DC (Ron Paul and a few other fiscally responsible adults excluded). The idiots who created the mess were rewarded with a 700 billion dollar "bailout". This "bailout" was anything but a bailout and had a price tag of anything but 700 billion. The actual price tag is closer to 11 trillion and puts us on the hook for another 13-17 trillion - not counting interest.

Think about that for a second. This stupidity crisis is the equivalent of our Federal Debt which took a generations of politicians over a hundred years to wrack-up.

For anyone who still believes we live in a free country where capitalism reigns please show me one economic textbook which states that failure, and fraud get rewarded with borrowed taxpayer money. For anyone who believes we live in a democracy please show me a textbook that says the government will en-debt you and your kids and their kids to pay for a failed business. How is that democratic?

"Law of Morons": Years ago, while serving on a committee I came to a sad realization. Like gravity, there is the another invisible force which I dubbed "The Law of Morons". Put a group of very intelligent, well meaning people in a room together, put them on a committee or some governmental body that is devoid of guiding principles or merit-based decision making and "The Law of Morons" will prevail. The collective IQ will drop to the smallest shoe size in the room. And hope for loafers, because collectively this body won't be able to tie anything together - not even a single shoelace.

Government Creates Problems: Basically our government is comprised of many well meaning intelligent people who for whatever reason, re-election, greed the "Law of Morons", corporate puppet strings (read: lobbyist), self interest, corporatocracy or whatever else, do nothing but create massive problems. Lack of regulation, too much regulation.

And without any uncertainty --- too much DEBT along with a deficit that will NEVER be paid.

They have failed us.

Terribly!

With debt and a failed capitalistic society our democracy is now at risk. Serious risk.

A democratic society requires a stable and effectively functioning economy. I trust that we and our successors at the Federal Reserve will be important contributors to that end.~ Alan Greenspan

Serious irony there unless he was talking about the end of a democratic society. Greenspan was primarily responsible for muzzling Brooksley Born's attempt to regulate derivatives. 

Our deficit requires that we counterfeit "money" to service our debt payments.

Forget about GDP, it is a bogus measure cooked by the BEA (US Bureau of Economic Analysis) . GDP is so baked that it makes the folks who cooked Enron's books look like saints. Let's focus on what we take in and what we pay out. We take in about 2 trillion in taxes and other revenues. We borrow about 2 trillion of which about 1 trillion must be taken off for debt service, and we spend well over 4 trillion.

To deal with the 1.6 trillion ++ shortfall we just print/counterfeit it. This debases the value of every dollar we hold, stealing wealth from every hard working American. It causes the need for more dollars to be injected into the system, which increases the amount of taxes that Americans pay.

There are only two crimes listed in our Constitution: Treason and counterfeiting.

"Solutions Create More Problems" ~ Al Bartlett (Worked on the Manhattan Project).

Another asked, "Is there any intelligent life on earth to change our future to a sustainable one?"

Dr. Bartlett replied, "Is there any intelligent life in Washington, DC is the bigger question?"

We Have a Corporatocracy: Not capitalism.

Corporatocracy: A government that serves the interest of, and may de facto be run by corporations.

Some states have government workers who have powerful unions that influence the government's decisions. California has a massive pension mess, created in large part by government unions and elected officials who have catered to these unions.

"Too Big To Fail" is living proof that capitalism is dead. These TBTF institutions that blew up the economy in 2008 with their stupidity crisis, at the very least deserved to fail. They blew it. That is the definition of capitalism. You do well you are rewarded, you screw up you close shop. You commit fraud and you do time.

But with a Corporatocracy you have Hank Paulson - a former Goldman Sachs CEO worth about 700 million dollars who winds up becoming our past Secretary of the Treasury. There is a serious distinction between a civil servant and someone who serves a corporation, especially the last corporation he worked for. His salary was only six figures, but his benefit was that he got to cash out of his stocks and pay no taxes. He gave the morons who blew up the economy 700 billion dollars. He had another former Goldman Sachs employee disperse the funds while the current CEO of Goldman Sachs professed to be "Doing God's work."

In Summary: Our debt and our inability to revive capitalism and cut the waste in government will be our demise. Sadly, the only glimmer of hope I see is that Corporatocracy will destroy itself. I say sadly because it will destroy the average American citizen like some parasite that kills it's host.

Capitalism is dead and that is why we are totally screwed.

In Summary: My faith in the 5Gs: (G*(religious edit)d, Gold, Guns, Grub & The Government Will Continue to Screw It Up) remains strong.

By D. Sherman Okst,

http://UnveilingTheEconomy.blogspot.com/

Bernardston MA USA

davossherman @ gmail.com

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What Does Silver’s Recent Performance Relative to Crude Oil Mean For Investors?

By: Przemyslaw_Radomski

Gold market witnessed a bumpy roller coaster ride during the week. An interesting thing to observe was the reasons that economic commentators gave for price fluctuations. On Tuesday gold for June delivery lost $14.50 to settle at $1,453.60 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,468.50 and as low as $1,445 while the spot gold price was shedding more than $11. The reasons for the decline were explained by falling oil prices and by a Goldman Sachs report with a short-term bearish call on oil and copper, the industrial bellwethers. (The term “bellwether” refers to the practice of placing a bell around the neck of a castrated ram leading his flock of sheep so that the movements of the flock could be noted by hearing the bell).

Precious metals were particularly hard hit by the Goldman-induced selling even though they were not – platinum aside – directly mentioned in the note. Silver had hit a 31-year high of $41.93 an ounce but fell back at one point to $39.75, a 5.2 per cent reversal. The explanation for this in Bloomberg is that an investor took an outsized option bet that SLV will drop 37% by July. Bloomberg reports: "A trader’s almost $1 million bet that an exchange-traded fund tracking silver will plunge 37 percent by July was today’s biggest single options trade on U.S. exchanges as futures on the metal reached a 31-year high. The 100,000 options to buy 100 shares each of the iShares Silver Trust (SLV) at $25 by July changed hands at the ask price of about 10 cents and exceeded the open interest of 6,054 outstanding contracts before today, indicating that a buyer of a new bearish position initiated the transaction. The ETF rose to the highest intraday level since trading began five years ago, $40.33, before erasing gains. It fell 0.5 percent to $39.67 at 12:54 p.m. It hasn’t closed below $25 since November."

On Wednesday, gold rose recovering after its biggest one-day drop in nearly a month. The explanation for the upward move was that the dollar retreated amid expectations the US Federal Reserve will maintain its accommodative monetary policy for now. Also, the market reacted to the positive industry report issued by metals consultancy GFMS group saying that gold’s decade-long price rally could take the metal above $1,600 an ounce by year-end, as investors’ appetite for gold sharpens further (notice the food metaphor.) 

The company sees gold prices averaging $1,455 an ounce this year and sticking to a range of $1,319-1,620 an ounce. In its Gold Survey 2011, metals consultancy GFMS said there was growing evidence that buyers may drive prices still higher this year. "There is a higher starting point for each successive investor-led rally in the price. Thus, assuming investment demand will at some point take off again this year, there remains good scope for new highs in the price to be recorded," the consulting group said.

Thursday morning when gold futures began climbing some analysts attributed it to weakness in the U.S. dollar, the euro and sovereign debt issues in Europe.

When on Friday Gold jumped to another record high to $1,479.70 an ounce on Globex, after settling at $1,472.40 on the Comex division of the New York Mercantile Exchange analysts said it was inflation fears in China that are pushing gold and silver prices higher. China's inflation jumped to a 32-month high. Another reason given for gold's performance was a softer U.S. dollar. We will have more to say on the latter relationship in the following part of this update.

We don’t know if next week investors will get their risk appetite back. While markets are not focusing on geopolitical risk in Africa and the Middle East and the Japanese natural and nuclear disasters, these problems remain and will lead to continuing safe haven demand. 

We turn to the technical portion to give you some food for thought. Actually we have only two charts for you this week (the full version of this report includes 17 of them), but both have important implications (charts courtesy by http://stockcharts.com.)

Beginning with the short-term GLD ETF chart, we observe that it signals a bullish trend in gold market. The very bullish reverse head and shoulders pattern which was formed over the December to April period has indeed been verified. 

Price levels have recently moved above the neck portion in the pattern and this move has been verified. Furthermore, the move was accompanied by strong volume, followed by a short consolidation, a decline back to the neck level and a quick reversal and a subsequent rally on significant volume. Simply put, this is both classic and beautiful, a true textbook verification of a breakout.

The situation is clearly bullish in the short term. Meanwhile, let’s see what happens in silver market – in this case from a long-term perspective and through the oil perspective.

We now present an updated version of a chart which we discussed in the March 11th Crude Oil, Gold, and Silver – Important Timing Connection. We were asked at that time to analyze oil and the ratios between oil, gold and silver. We found only one point of interest that being a possible cup and handle pattern in the silver to oil ratio. This pattern now appears to have completed and the ratio has broken out to the upside. If this breakout holds, it is possible that it will have profound implications for silver investors. In fact, it would imply that silver will actually heavily outperform oil from an investment standpoint.

Decreases in the price of oil would not appear likely to greatly impact the price of silver if the breakout in this ratio is confirmed. Also, if oil prices rise or even stagnate, silver investors will still likely benefit. This is indeed very positive news for those investing in the white metal.

Summing up, the short-term signs appear bullish for precious metals market. This sentiment is supported in several key charts and at this time. It is difficult not to be excited about the outlook for silver today. Its performance in recent months certainly has not been a fluke and it appears that further price increases are likely for the white metal.

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6 banks shuttered; makes 34 closed in '11

By MARCY GORDON

Regulators on Friday shut down a total of six banks in Alabama, Georgia, Minnesota and Mississippi, boosting the number of U.S. bank failures this year to 34. There were 157 bank closures in 2010 amid the shattered economy and piles of bad loans.

The Federal Deposit Insurance Corp. seized the banks, the largest by far being Superior Bank, based in Birmingham, Ala., with $3 billion in assets and about 70 branches in Alabama and Florida.

A newly chartered bank subsidiary of Houston-based Community Bancorp LLC was set up to take over Superior Bank's assets and deposits. The new subsidiary is called Superior Bank NA.

In addition, the FDIC and Superior Bank NA agreed to share losses on $1.84 billion of the failed bank's loans and other assets.

Superior Bank received $69 million in taxpayer funds in December 2008 under the government's financial bailout program, Treasury Department data show.

Its failure is expected to cost the deposit insurance fund $259.6 million.

Also shuttered were Birmingham-based Nexity Bank, with $793.7 million in assets; Bartow County Bank of Cartersville, Ga., with $330.2 million in assets; New Horizons Bank in East Ellijay, Ga., with $110.7 million in assets; Rosemount National Bank in Rosemount, Minn., with $37.6 million in assets; and Heritage Banking Group, based in Carthage, Miss., with $224 million in assets.

AloStar Bank of Commerce, also based in Birmingham, agreed to assume the assets and deposits of Nexity Bank. Hamilton State Bank, based in Hoschton, Ga., is assuming the assets and deposits of Bartow County Bank. Citizens South Bank, based in Gastonia, N.C., is acquiring the assets and deposits of New Horizons Bank. Central Bank, based in Stillwater, Minn., is assuming those of Rosemount National Bank. Trustmark National Bank, based in Jackson, Miss., is taking those of Heritage Banking Group.

In addition, the FDIC and AloStar Bank of Commerce agreed to share losses on $384.2 million of Nexity Bank's loans and other assets. The agency and Hamilton State Bank are sharing losses on $247.5 million of Bartow County Bank's loans and other assets. The agency and Citizens South Bank are sharing losses on $84.7 million of New Horizons Bank's assets. The FDIC and Trustmark National Bank are sharing losses on $156.4 million of Heritage Banking Group's assets.

The failure of Nexity Bank is expected to cost the deposit insurance fund $175.4 million. The failure of Bartow County Bank is expected to cost $69.5 million; that of New Horizons Bank $30.9 million; Rosemount National Bank, $3.6 million; and Heritage Banking Group, $49.1 million.

Georgia has been one of the hardest-hit states for bank failures. Sixteen banks were shuttered in the state last year. The shutdowns of Bartow County Bank and New Horizons Bank brought to eight the number of bank failures in the state this year.

California, Florida and Illinois also have seen large numbers of bank failures.

The 157 bank closures last year topped the 140 seized in 2009. It was the most in a year since the savings-and-loan crisis two decades ago.

The FDIC has said that 2010 likely would mark the peak for bank failures. Already this year the pace of closures has slowed: By this time last year, regulators had closed 50 banks.

The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008, the year the financial crisis struck, through 2010 bank failures cost the fund $76.8 billion.

The growing number of bank failures has sapped billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.

The number of banks on the FDIC's confidential "problem" list rose to 884 in the final quarter of last year from 860 three months earlier. The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis. 

The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.

Depositors' money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.

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Earnings stumbles could awaken bears

by Reuters

Earnings could make for a bumpy ride in U.S. stocks next week if more key companies undershoot expectations, possibly causing a spike in volatility.

Disappointments from Alcoa (AA.N) , Google (GOOG.O) and others in the first week of earnings have dampened some of the enthusiasm about results, ensuring that eyes will be glued to reports in the coming days.

These include top technology and financial company results, including Yahoo (YHOO.O), Intel (INTC.O), IBM (IBM.N), Texas Instruments (TXN.N), Goldman Sachs (GS.N) and Citigroup (C.N). This blitz of numbers will come during a holiday-shortened week. U.S. financial markets will be closed on April 22nd in observance of Good Friday.

Market watchers also will be anxious to hear how much tech companies may have been affected by the disaster in Japan.

"We've all been lulled to sleep here lately. This earnings season will hopefully be a telling point to try to give people conviction to go one way or the other," said Mike Gibbs, managing director and chief market strategist at Morgan Keegan in Memphis.

"There are potential land mines out there that could create a little bit more volatile trading," he said.

The CBOE Volatility Index, a barometer of investor anxiety known as the VIX (.VIX), briefly fell on Friday to its lowest level since July 2007. It ended at 15.32, well below its mid-March high of 31.28.

Others agreed that further disappointments could stir up volatility.

"If earnings disappoint greatly from any of the major players next week in the financials or technical sector, this could be a catalyst for a return of volatility into the market," said Joe Kinahan, TD Ameritrade chief derivatives strategist, in Chicago.

For the week, the Dow Jones industrial average (.DJI) slipped 0.3 percent, while the Standard & Poor's 500 Index (.SPX) and the Nasdaq Composite Index (.IXIC) each shed 0.6 percent.

BEWARE OF "DUAL HEADWINDS"

Whether the earnings season will be strong enough to propel the market higher is the question on investors' minds.

The Standard & Poor's 500 index (.SPX) is up 25.8 percent since the start of September, roughly when the recent rally began.

But sharp gains in the price of oil and other commodities, especially in the first quarter, have fueled worries about the impact on consumers and companies. Moreover, Japan's massive earthquake and tsunami, which triggered a nuclear crisis, have prompted other concerns.

Equity strategists at JPMorgan Chase cut their U.S. earnings estimates by $1 -- but for second-quarter and full-year results -- because of these "dual headwinds."

One popular view is that the market stays in sideways motion during earnings season.

"Earnings are just going to be enough to keep this market bipolar," said Mark Lamkin, CEO and chief investment strategist of Louisville,Kentucky-based Lamkin Wealth Management, with more than $200 million in assets under management.

They "are going to be good enough to keep this market toward the high end of this trading range, but they're not going to be good enough to break out of a range and set the next big leg higher." 

FINANCIALS' FORECAST REVISED DOWN 

In aggregate, analysts' mean earnings forecast for the S&P financial sector for the first quarter is down 3.4 percent in the past 14 days, according to Thomson Reuters StarMine data. 

It was the biggest negative change for any S&P 500 sector, while energy has seen the biggest positive change, the data showed. 

The mean change in earnings estimates for Goldman Sachs (GS.N) is down 42.8 percent in the last two weeks, while the mean change in estimates for Citigroup Inc (C.N) is down 6 percent in the last 14 days, it showed. 

Analysts' mean earnings forecast for the S&P information technology sector is down 0.1 percent in the past 14 days. 

Among other tech disappointments, Infosys Technologies Ltd (INFY.O), India's No. 2 software services exporter, on Friday forecast annual sales lower than expected. 

BEARS CIRCLE THE OIL PATCH 

Among others expected to report next week are several oil services companies. 

Data suggests those stocks could be vulnerable to more declines as earnings expectations have come down and bearish options bets have increased lately, according to Reuters Insider quantitative analyst Mike Tarsala. Deepwater projects in the Gulf of Mexico are being approved at a slow pace. 

Earnings sentiment for the group is waning, he said. Two of the sector's biggest names, Halliburton Co. (HAL.N) and Schlumberger Ltd. (SLB.N) are due to report next week. 

To be sure, many analysts still see many upside surprises ahead in this earnings reporting period, repeating the trend of recent earnings seasons. 

"What's happened is the global macro noise has overshadowed the fundamental earnings stories ... beneath the covers, things are actually better than people believe," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs. 

Based on his own research model, he ranks industrials (.GSPI) at the top of his earnings expectations among the S&P 500's 10 sectors, followed by telecommunications. 

Thomson Reuters data shows S&P 500 earnings are expected to have risen 11.7 percent from a year earlier. That estimate is roughly unchanged in recent weeks.

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