Grains and Oilseeds: December corn closed at $6.92 per bushel, down 9c on reduced concern over frost or freeze damage. We continue to favor the long side of corn on expectations of better exports and possible maturity problems in some areas. December wheat closed at $6.88 ¼ per bushel, down 7 3/4c on profittaking in front of the weekend. We prefer the sidelines in wheat. November closed at $13.55 ½ per bushel, down 3 1/4c on reduced frost concerns and fund long liquidation. The dollar strength was also a factor in the selling of this group. We like soybeans from here on possible detrimental weather forecasts.
Cattle & Hog report: December cattle closed at $1.18950 per pound, down 47.5 points on pre weekend profittaking after recent strength. Weakness in the grains and a stronger dollar a factor. We continue to favor the long side of cattle. December hogs closed at 82.7725c per pound, down 1.675c on profittaking after recent strength. Steady cash market prices a factor in recent strength. We favor the short side of hogs with our spread favorite long cattle, short hogs.
Coffee, Cocoa and Sugar: December coffee closed at $2.6040 per pound, down 15 points and remains under pressure after recent price gains. We prefer the sidelines. December cocoa closed at $2,789 per tonne, down $2.00 and remains under selling pressure. With no fresh fundamentals from Ivory coast or Nigeria, we would hold current long positions for now while our overall view remains bullish for a move back to the $3,000 per tonne level. October sugar closed at 27.52c per pound, down 1.98 points. While lower cane production is expected for Brazil due to bad weather, expectations remain high and could offset any concerns. We remain bearish for sugar. Any sales should be accompanied by stop protection.
Cotton: December cotton closed at $1.1099 per pound, down 63 points on concerns over global economic problems which could cut demand for cotton. While bad weather in the U.S. is still a factor with the possibility that the ongoing drought in Texas could impact crops further, demand concerns offset supply declines. We would stay out for now.
John L. Caiazzo