Energies: March crude il closed at $103.24 per barrel, up 93c and its highest closing level for the nearby contract since May of last year. Expectation that Greece would get another bailout and the strength in the Euro against the dollar prompted buying. For the week Nymex crude gained 4.6%. We view the buying as "irrational exuberance", an historic phrase of the past. Any change in the Greek bailout prospects or the potential for other eurozone country problems could prompt selling of Euros and strength for the dollar. For now the Iranian halt to oil shipments to Great Britain and France could prompt further price gains for crude oil. Stand aside.
Copper: May copper closed at $3.72 per pound, down 7c even as the dollar weakened this week. Disappoint inflation data from China could prompt reduced imports of the metal and a 15.3% decline in imports last month also a psychological factor in the selling. We continue to feel global economies remain weak and that could preclude demand for construction materials such as copper. Improved housing data was responsible for the strength in copper during the week. Hold put positions but do not add for now.
Precious Metals: April gold closed at $1,725.90 per ounce, down $2.50 as the improved U.S. economic data prompted the move of funds to equities from the usual safe haven of precious metals and treasuries. Expectation of increased inflation could prompt attraction to precious metals as a hedge. We continue to favor the sidelines for now. March silver closed at $33.216 per ounce, down 15.4c losing 1.2% for the week but for the year up 19%. We continue to prefer silver to gold on any new interest in precious metals. For now we would stand aside. The Eurozone debt crisis could prompt renewed interest in precious metals depending on the almost daily influx of news. April platinum closed at $1,633.90 per ounce on Friday, up $7.80 or 0.5% while March palladium lost $8.50 or 1.2% to close at $688.10 per ounce. For the year palladium has gained 4.9%. We continue to favor palladium over platinum if only due to the price disparity.
Grains and Oilseeds: May corn closed at $6.45 ¼ per bushel, up 5 1/2c tied to dry conditions in some growing areas of Northern U.S. and Canada. Less than average rainfall since August in Iowa and dry conditions in the upper Midwest in front of spring plantings is causing concern and some long hedges. We like corn from here but would scale into position. May wheat closed at $6.47 ¾ per bushel, up 12 1/2c and as with corn, the weather is increasingly problematic. We continue to favor the long side of wheat. May soybeans closed at $12.73 ¾ per bushel, up 8 3/4c tied to a recent huge order from China. We continue to favor the long side of soybeans as well. Key elements to watch are the weather and the U.S. dollar.
Meats: April cattle closed at $1.3090 per pound, up 1.25c tied to a scarcity of supplies. We continue to favor the long side of cattle but would bring up the trailing stops since we are in new high ground for prices. April hogs closed at 90.37c per pound, up 0.15c mostly tied to position squaring in front of the three day holiday weekend. We favor the sidelines for hogs.
Coffee, Sugar and Cocoa: May coffee closed at $2.0235 per pound, up 1.15c mostly on technically oversold considerations after coffee fell from nearly $3.00 per pound since last September. Expectations for Brazilian output to rise to a record this year is expected to continue to pressure prices. We like the sidelines. May cocoa closed at $2,345 per tonne, down $60 tied to continued origin selling and the recent shortcovering that moved prices higher has dissipated. We favor the sidelines after having been bullish as prices seemed to want to re-visit the $2,500 per tonne level. May sugar closed at 23.77c per pound, up 4 little points and remains in a tight range. Brazil is expected to convert more cane into ethanol but not enough to create supply concerns. We consider sugar a trading affair with the recent range
Cotton: July cotton closed at 93.65c per pound, down 1.21 and remains stuck in a range for February between 98c and current prices. Improved export sales could prompt new buying early in the week. We like cotton from here for a move back to $1.00 but use stops. We are close to recent support levels and any breach could prompt long liquidation and new shorts.
John L. Caiazzo