Grains and Oilseeds: May corn closed at $6.45 per bushel, up 9 1/2c on exports to China. We prefer the sidelines in corn even has technicals and exports could support prices from here. May wheat closed at $6.43 per bushel on supply reductions. We prefer the sidelines in wheat but on spreads we like long wheat/short corn. May soybeans, our favorite in the group, closed at $13.37 ¾ down ¾ on profittaking after recent strength. We look for demand from China for bean oil and meal to prop up soybean prices. Stay long the beans but raise those trailing stops.
Meats: April cattle closed at $1.2602.5 per pound, down 62.5 points on profittaking after recent price gains. Beef demand improving and reduced herd sizes could prompt further buying of futures. Stay long but raise your stops. April hogs closed at 87.825c per pound up 75 points on continued concern over China pork disease problems. We prefer the sidelines in hogs.
Coffee, Cocoa and Sugar: May coffee closed at $1.8620 per pound, down 3.2c on continued long liquidation after recent strength. The International coffee Organization had cut its forecast for world production and that had provided the backdrop for the recent high prices. We could see a further correction for coffee but any further selling should provide an opportunity to buy. May cocoa closed at $2,410 per tonne, up $15 tied to concerns over caterpillar damage and demand for cocoa beans against supply concerns. The Ivory Coast political situation has stabilized but further rallies could be sustained by production cuts in Africa. Demand improving on expectations for global economic recovery, a situation we do not feel is valid, however we could see further price gains to the $2500 per tonne level but we would look to buy put options on any further price gains.
Cotton: July cotton closed at 89.74c per pound, down nearly a penny losing 96 points as pressure increasing on India'’ prime minister to withdraw the country'’ export ban. We would hold off on any new purchases but would keep long call positions intact.