Precious Metals: August gold late trading on Friday was $1,594.50, up 5.20 after finishing during the session at $1,590.10, up 80c. September silver traded at $39.28 per ounce, up 5.86c in conjunction with gold and also against the weak dollar. Gold traded a new high during the week as expectations were for the U.S. to continue its "stimulus" program. We prefer the sidelines metals also intraday trading by professionals could reap positive results. October platinum lost $18.80 per ounce to close at $1,755.50 and traded at $1,765.90, down $8.40 in late trading. September palladium closed at $780.65 per ounce, down $2.70 but in late trading managed a recovery of $6.50 to $784.00. The white metals are used in automobile catalytic converters as well as some oil refining processes. We prefer the sidelines but are starting to look at the long side of palladium against platinum spreads again. They worked out very well for our subscribers last time.
Grains and Oilseeds: September corn closed at $7.01 ¼, up 10 1/2c with weather in the Midwest the dominant factor. Further heat and dryness expected this coming week also prompted shortcovering and new buying. We continue to like corn but with stop protection. Decem ber wheat closed at $7.23 ½ per bushel, down 14 ½ on concerns of weak exports. Reports that Egypt passed on buying U.S. wheat in favor of Russian wheat also pressured U.S. wheat prices. Stay out. November soybeans closed at $13.87 per bushel, up 3c in line with corn gains since similar whether problems exist for both. We like soybeans from here as well.
Cattle & Hog report: August live cattle closed at 1.106 per pound, up 50 points on a bounce from Thursdays losses. Hot weather prompted ideas that less beef would be consumed and prompted lower cash prices. We had liked cattle but would now stand aside after recent sideways to down action. August lean hogs closed at 98.95c per pound, up 77.5 points in sideways action after recent gains. We could see added selling pressure early in the week. Increased slaughter should result in over supply and look to sell hogs on any rally but with buy stops.
Coffee, Cocoa and Sugar: September coffee closed at $2.5355 per pound, down 4.8c tied to adequate roaster supplies and good exports from Brazil. We favor the sidelines for now. September cocoa closed at $3168 per tonne up $10 after recent selling. Supplies from Western Africa providing price pressure. We continue to favor the long side of cocoa but raise trailing stops. October sugar closed at 28.87c per pound, down 10 points for its first weekly decline since May. Importers are holding off purchasing after prices reached a five month higher. We had favored the long side of sugar and now suggest profittaking and light short positions using stop protection of course.
Cotton: October cotton closed at $1.0146 per pound, down 6.48c tied to export sales cancellations. Concerns that demand is waning prompted long liquidation and additional shorts. Recent demand reports appear to have been overstated. We would stay out but remain bearish.
John L. Caiazzo