Precious Metals: August gold closed at $1,541.60, up $11.00 tied to the weaker than expected U.S. jobs data and the rush to the relative safety of bonds and precious metals. September silver gained only 0.7c to $36.543 but in late trading was up 14.9c to $36.6850. October platinum closed at $1,733.40, down $9.60 with September palladium losing $7.60 to $778.95. Concern that a weaker than expect jobs market could cut into auto sales which the white metals depend on for their use in catalytic converters. We prefer the sidelines.
Grains and Oilseeds: September corn closed at $6.42 ¼, per bushel, up 17 1/4c mostly on a correction after having lost 15% since the middle of June. The U.S. Senate voted to end some tax breaks for the ethanol industry and prompted long liquidation and new shorts in corn. We believe corn has based and could rally from here based on supplies and export demand. Buy corn. December wheat closed at $6.90 ½ per bushel, up 15c on some fund buying and tied to corn action. We favor the sidelines in wheat. November soybeans closed at $13.48 ½ per bushel, up 8 3/4c also on the buying in corn. Dry weather concerns could develop over some areas of the Midwest in the next few weeks could help soybeans. Also the planted acreage numbers will require good crop yields in order to offset the acreage losses. We like soybeans from here.
Cattle & Hog report: August live cattle closed at $1.1465, on Friday down 75 points on profittaking after recent strength. The weak stock market also played a role in the long liquidation. Good export demand for beef was also a supportive factor recently. We continue to like cattle but would use stops on any new purchases. August lean hogs closed at $.96.175 per pound, down 1.00c on weak cash markets. We prefer the sidelines in hogs.
Coffee, Cocoa and Sugar: September coffee closed at $2.6360, up 30 points tied to possible cuts in production by Brazil. Low yields also a concern but prices remain in a range near the 14 year highs. We prefer the sidelines but on any setbacks would look to buy coffee for December delivery. Always consider stop protection for markets dependent on foreign producers. September cocoa closed at $3,088 per tonne, down $3.00 but holding above $3,000 tied to concern over Black Pod disease at the Ivory Coast. We could see some price correction after recent gains but would use setbacks to add to longs or for new purchases. October sugar closed at 28.98c per pound, down 38 points on a pre-weekend long liquidation. We like sugar from here on expectations for reduced Brazilian crop production and poor harvest tied to dry weather. Use stop protection.
Cotton: October cotton closed at $1.1658, up 38 points tied to concerns over dry weather. We could see some buying develop on shortcovering, but have no opinion as to future direction after having been short for some time. Stay out for now.
John L. Caiazzo