Grains and Oilseeds: July corn closed at $5.78 ¾ per bushel, up 1/4c but down from the $6.44 per bushel achieved recently. Better than expected crop conditions affecting corn and soybeans recently. We could see some shortcovering but prefer the sidelines in corn. July wheat closed at $6.75 per bushel tied to the recent dryness reported in Kansas and the growing areas of Russia. Crop reduction reported was not as severe as previously expected and that could curtail any further price gains. We prefer the sidelines in wheat as well as supplies appear adequate going forward. July soybeans closed at $13.83 ½ per bushel, up 7 1/2c on a correction after recent weakness took prices down from recent highs around $15.00. Crop reports as well as plantings prompted fund long liquidation and new trader short positions. We now once again favor putting on some long positions but as before, use stop protection which proved effective during the recent price declines.
Meats: August cattle closed at $1.19100 per pound, down 70 points and have lost over 10% from early March prices. Packers benefit from lower prices since they are for the most part not passed along to consumers according to the USDA. We have been bullish for cattle since herd reduction prompted shortcovering but stagnant pricing recently have caused us to temper our bullish stance. Hold call positions. August hogs closed at 86.625c per pound up 52.5 points on shortcovering after recent weakness. Hog producers have increased herd replenishment rates which are continuing to weigh on prices and limiting any recovery.We prefer the sidelines in hogs.
Coffee, Cocoa and Sugar: July coffee closed at $1.6780, up 90 points on shortcovering and reflecting the new China preference for coffee over tea in some areas. We like coffee from here after the recent price declines have bottomed and could prompt and based from which prices can now start to regain some of the losses from recent highs near $2.00 per pound. July cocoa closed at $2110 per tonne, up $5.00 tied to expectations that China may begin to seek commodities after recent purchase curbs mandated by the Government. We like cocoa from here and with renewed interest from China shortcovering could push prices back to the $2300-2400 level on an interim basis. July sugar closed at 19.62c per pound, up 4 ticks on light shortcovering into the long U.S. holiday weekend. Weakness in sugar has been tied to global surpluses but recent increases in demand could offset some of the pressure. We favor the sidelines in sugar but would hold any call positions.
Cotton: July cotton closed at 73.62c per pound, down 32 points on continued pressure from production even as China import projections have improved. We had been bullish for cotton but now would just hold call positions without adding for now.