Grains and Oilseeds: December corn closed at $6.38 ½, per bushel, down 7c with many commodities under pressure from the ongoing global economic uncertainty which has weighed on Corn, Wheat and soybeans of late. December wheat closed at $6.16 ¾, per bushel down 3 1/4c while soybeans managed a gain of 8 1/2c on short covering after recent losses tied to USDA reports to close at $11,856 per bushel. We continue to favor "food" with long positions in corn and soybeans.
Meats: December cattle closed at $1.2055 per pound, down 1.05c tied to weak beef demand outlook. The holiday season usually emphasis traditional items such as turkey and ham. We still like cattle but would not add to long positions for now. December hogs closed at 86.45c per pound, up 7c on Friday following gains on Thursday. Strong export demand even against increased supplies prompted the shortcovering and new buying Thursday and Friday. We continue to view hogs as bearish although the holiday season usually increases demand for ham. We would hold off any new positions in hogs.
Coffee, Sugar and Cocoa: December coffee closed at $2.3395 per pound, up 3.95c for the first weekly gain in three. The International Coffee Organization reduced its outlook for world output in the season that commenced in October to 127.4 million bags from their previous forecast of 129.5 million bags in September. Rains were damaging to crops in Latin america and Indonesia. We could see additional buying but any purchases of the March contract should be followed with stops. December cocoa closed at $2489 per tonne, down $15 and made new 2 ½ year lows on Friday as stops were run. Technicals accounting for the selling even against a weak dollar which is usually supportive of prices. We prefer the sidelines. March sugar closed at 25c per pound, down 39 points to a one month low on long liquidation until some clarification of Indian exports and Russian weather can be determined. Reports that India may allow the export of between 500,000 and a million tons of sugar but no confirmation has been received so we would stand aside and just hold current short positions.
Cotton: December cotton remains under pressure with the December contract losing another 26 points to close at 99.24c per pound. Profittaking after Thursdays gains the main feature on Friday. The ongoing global economic outlook weighs on many consumer commodities and the huge Chinese exports reported late Thursday also a factor in the ongoing weakness. We like cotton but would not add to current long positions for now.
John L. Caiazzo