Grains and Oilseeds: September corn closed at $5.51 ¼ per bushel, up a penny on continued shortcovering and new buying tied to dry weather that has reduced yields for corn and soybean crops in the Midwest. We could see renewed interest in corn and would be long from here. September wheat closed at $6.87 ½ per bushel, up 9c on increased export sales. We could see additional gains early in the week but we prefer the sidelines in wheat. November soybeans closed at $13.75 ½ per bushel, up 4 1/4c also tied to the weather and we continue to favor the long side of soybeans for a potential move back to the mid $14 range. Use stops on any new buying.
Meats: August cattle had fallen on expectation of reduced demand but managed a gain on Friday on shortcovering closing at $1.1690, up 35 points. We like cattle from here after having been stopped out on earlier purchases. August hogs closed at 91.375 per pound, down 75 points on profittaking after recent strength. We favor the sidelines in hogs but demand prompted by "barbecue season" and packer demand might prompt new buying in both cattle and hogs.
Coffee, Cocoa and Sugar: September coffee closed at $1.5580 per pound, down 3c on concern that global economic weakness will reduce demand for "non essentials" even though I could not live with the second or third cup in the morning….. Stay on the sidelines but Brazilian frost season could prompt new buying should it materialize. September cocoa closed at $2112 per tonne, down 35 points and remains on our "no interest at current prices" list. Improved weather in the major producer, Ivory coast, and global economic concerns kept prices under pressure. We continue to favor the sidelines or light short positions. October sugar closed at 19.9c per pound down 89 points on continued selling pressure tied to a global surplus expected to continue through 2012/13. India’s monsoon rains could change the picture for sugar but we prefer waiting actual results rather then try to "guess". Stay out for now.
Cotton: December cotton closed at 69.12c per pound, up 1.41c on demand in front of this year’s harvest. Delivery intentions could change the picture for cotton but we would hold long call positions for now. Tomorrows intentions may change our mind.