Grains and Oilseeds: March corn closed at $5.99 ½, down 12 cents tied to the equity market losses.March wheat closed at $6.02 ¼, down 2 3/4c tied to beneficial rains in Argentina and Southern Brazil but a purchase by Egypt of 180,000 metric tons helped prices hold with minor losses. However, March soybeans lost 24 1/4c to close at $11.58 1/4c after Thursdays bearish USDA report as stocks were reported higher than expected. We were "pushed" to the sidelines in soybeans after having been bullish for some time. We would await further fundamental developments before taking any new positions.
Meats: February Cattle closed at $1.22475 per pound, up 225 on shortcovering tied to strong demand for protein products. We continue to favor the long side of cattle. February hogs closed at 85.6c per pound also tied to demand. We continue to favor cattle over hogs.
Coffee, Sugar and Cocoa: March coffee closed at $2.2475 per pound, down 9.15c tied to better harvest results from Brazil. Previous forecasts pushing coffee prices higher were tied to expected weather damage. We prefer the sidelines for now. March cocoa closed at $2,269 per tonne, down $57 on reduced consumption reports from Europe. Tighter supplies had prompted buying but consumption expectations failed to materialize and prices declined. We like cocoa but would hold current call positions and not add for now. March sugar closed at 23.8c per pound, up 53 points on tight supplies. We continue to favor the long side of sugar but only through the purchase of call options for now.
Cotton: March cotton closed at 95.47c per pound, down 22 points as estimates of just how much impact Chinese buying will have in the face of global economic concerns. We continue to suggest cotton may have bottomed after last years devastating price declines. We would only use call options from here.
John L. Caiazzo