Precious Metals: December gold closed at $1,755.70 per ounce, down $9.40 as traders could not make any determinations after the U.S. jobs report and concern over the Euro zone. Profittaking in front of the G20 meetings this week in Cannes also a factor. We would await the results of that meeting before taking any action. December silver lost 41c per ounce to close at $34.08 posting a weekly loss of 3.4%. While we prefer silver to gold, we would take no action until Monday when hopefully the results of the Greek government situation and the G20 is available. January platinum closed at $1,629.30 per ounce down $17.70 while December palladium lost $6.980 to $655.30. For the week Platinum l9ost 1.4$ while palladium lost 2%.
Grains and Oilseeds: December corn closed at $6.55 ¾ per bushel, up 2 1/4c on shortcovering in front of the weekend. Prices are supported by demand for ethanol and concern over early winter weather and recent purchases by China of U.S. corn. We like corn and would hold long positions. December wheat closed at $6.36 ¾ per bushel, up 3/4c but could be pressured by increased probability of beneficial weather over the U.S. Southern plains. A record Australian wheat harvest could add pressure to wheat prices. We prefer the sidelines in wheat. March soybeans closed at $12.30 per bushel, down 6 1/2c on selling tied to the resolution of the Argentina soy processing workers and the country"s main port in Rosario which was ended by Government order. USDA reports expected could prompt wide price swings so we would hold corn and soybean positions but not add for now.
Meats: December cattle closed unchanged on Friday at $1.2450 per pound tied to packer demand. We continue to like cattle but look for resistance between $1.275 and $1.295. A reduced poultry supply could add support to red meat. Hold long positions but raise trailing stops. December hogs closed at 86.85c per pound, up 25 points in line with the buying of cattle, however pressure on pork products tied to reduced packer demand could weigh on prices. We continue to favor the long cattle, short hogs spread but if cattle prices hit resistance levels, liquidate both sides of the spread, do not leave a leg open.
Coffee, Sugar and Cocoa: December coffee closed at $1.3105, up 4.25c on shortcovering and new buying tied to expectations of a resolution of the Euro zone crisis. We are not sure of anything right now so would take profits, if any, on long coffee positions and stay out for now. December cocoa closed at $2679 per tonne, down $41 on long liquidation in front of the weekend and against the strong dollar which has become a refuge pending the outcome of the G20 meetings. March sugar closed at 25.55c per pound, down 10 points on profittaking after recent strength and in front of the G20 meeting results. We prefer the sidelines but would hold short positions for now.
Cotton: December cotton closed at 98.74c per pound, up 62 points on shortcovering in front of the weekend and the G20 meetings. Recent long liquidation tied to the International Cotton Advisory Committee’s forecast for world cotton surplus in the 2011-12 period. We continue to favor the long side of cotton.
John L. Caiazzo