Financials, commodities focus attention on Europe

Precious Metals: December gold closed at $1,636.10 per ounce, up $23.20 on shortcovering and the dollar weakness. Expectations of a resolution to the current European debt crisis prompted the rally in the Euro and consequent decline in the dollar, a relative safe haven with Treasuries. We do not expect a resolution to the Euro crisis but would await the results of the Brussels meetings before taking any position in precious metals. For the week gold lost $46.90 or 2.8% and we are not ready to make any recommendations to our clients. December silver closed at $31.19 per ounce, up 91c following gold and against the weak dollar. January platinum gained $18.80 to close at $1,509.20 per ounce with December palladium gaining $33.85 per ounce to close at $618.25 per ounce. We continue to favor the long palladium, short platinum spread but otherwise stay out for now. The platinum gain on Friday was 1.3% while the gain in palladium registered 5.8%.

Grains and Oilseeds: December corn closed at $6.49 ¼ per bushel continuing is slide after recent negative USDA reports. We are holding current long call positions. December wheat closed at 632 per bushel, up 1 ¼ per bushel on light buying. We prefer the sidelines in wheat. November soybeans closed at $12.12 ¼ per bushel, down 12 3/4c with the March contract losing 8 1/4c to close at $12.29 ½ per bushel.. We continue to favor the long side of soybeans.

Meats: December cattle closed at $21.2215 per pound, up 35 points against the weak dollar and on shortcovering and a lack of any new fundamentals. Growing demand and fewer pounds of beef expected for next year could prompt new buying of forwards.We continue to favor the long side of cattle. December hogs closed at 89.65c per pound, down 32.5 points on a correction after recent strength. We have no opinion now on hogs but could expect further buying early in the week.

Coffee, Sugar and Cocoa: December coffee closed at $2.4545, up 13.8c on renewed talk of reduced production and supplies. We could see higher prices but any buying should be accompanied with stop protection. December cocoa closed at $2560 per tonne, down $2.00 on long liquidation and a lack of fresh fundamentals. Hold any long positions. March sugar closed at 26.48c per pound down 32 points in sideways trading. We prefer the sidelines in sugar but any short positions should be held.

Cotton: December cotton closed at 97.10c per pound up 24 points but remains under pressure from the USDA recent report. At current prices after being stopped out under $1.00 we would look to buy calls.

About the Author
John L. Caiazzo

Website: www.acuvest.com

E-mail: futures@acuvest.com

Information provided is from sources deemed to be reliable but not guaranteed. Futures and Options trading involve a high degree of risk and may not be suitable for everyone. John Caiazzo is a registered commodities broker with over 40 years experience in investments and opinions are his own and not of the Futures Commission Merchant to which he introduces his clients.

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