Copper: May copper closed at $3.88 per pound, down a penny on profittaking after trading as high as $3.94 early in the week. Pressure on copper prices came from slower U.S. manufacturing and a drop in consumer confidence. Selling pressure also came from reports that stockpiles of copper at the Shanghai storage facility increased on a weekly basis indicating reduced demand primarily from China. We continue to favor the short side of copper once again based on our expectation of a continued weak global economic condition. Add to put positions on any price gains. On a technical basis, the February 9th high of $3.99, indicates formidable resistance at the $4.00 level.
Precious Metals: April gold closed at $1,655.80 per ounce, down $3.70 and for the week gold lost 3.3%. Positively construed U.S. economic data along with recent dollar strength prompted long liquidation in precious metals and once again, we suggest the sidelines. May silver closed at $32.60 per ounce, down 12c and lost 4.7% for the week. For those who "insist" on precious metals in their portfolio, we prefer silver to gold. April platinum closed at $1,675.50 per ounce, down $8.40 or 0.5% while June palladium closed at $701.70 per ounce, down $8.20 or 1.2% . For the week platinum lost 0.6% while palladium lost 1.2%. Our previously suggested spread of long palladium/short platinum suffered this past week but could provide an opportunity to re-implement that spread.
Grains and Oilseeds: Strength in grains recently has been tied to expectation that China will increase purchases from the U.S. May corn closed at $6.72 per pound, up 4c and touched $6.7375, its highest price since late September. For the week corn gained 4.3%. We like corn but favor the long side of soybeans as we have for some time. May wheat closed at $672 per bushel, up 7 1/4c for a gain of 1.1% on Friday. During the session wheat traded as high as $6.73, its highest since early March. We prefer the sidelines in wheat. May soybeans closed at $13.74 per bushel, up 5c with continued strength tied to the expectation of additional Chinese purchases of bean oil and meal. May beans briefly touched $13.775 per bushel, its highest since September 15. For the week beans were up 2.7% and remains our favorite in the group. Add to longs on any correction.
Meats: April cattle closed at $1.2530 per pound, down 27.5 points on reports of re-stocking of feed lots. Previous declines in herd sizes prompted the recent strength in prices but concern that producers are attempting to reverse the decline in the U.S. herds, currently at their smallest in decades, could lead to pricing pressure. However, for the current nearbys, prices could achieve additional gains possibly to the $1.27-1.30 level. We still like the long side of cattle but bring up those trailing stops. April hogs closed at 85.87bc per pound, down 1.025c and with expected increase in China production and lower prices, we continue to prefer the sidelines in hogs.
Coffee, Cocoa and Sugar: May coffee closed at $1.8315 on Friday, down 2.15c on expectation of a large harvest by Brazilian growers. Coffee prices have declined 19.3% so far this year on expectation of increase global inventories. We had liked the long side some time ago but have moved to the sidelines with a continued expectation of still lower prices.May cocoa closed at $2.256 per tonne, up $35 on shortcovering after recent weakness. On Friday prices were up 1.6% but for the week lost 6.4%. We are on the sidelines in cocoa. May sugar closed at 25.42c per pound, down 8 points after reaching 25.68c during the session. Our recent goal of 25c has been achieved and we are now on the sidelines even as prices may move a little higher.
Cotton: May cotton closed at 88.05c per pound up 4 points on positive U.S. export data reported Thursday. Cotton exports from India remain banned. We like the long side of cotton but raise trailing sell stops should India lift its export ban which could cause sudden selling.