Grains and Oilseeds: December corn closed at $7.5625 per bushel, up 40c and for the third quarter gained 19%. The U.S. estimated supplies have hit their lowest level in nearly eight years and heavy shortcovering and new buying the main feature for corn. We prefer the sidelines even as corn may rally further. December wheat closed at $9.025 per bushel, up 47c and gained 19% in the third quarter. November soybeans closed at $16.01 per bushel, up 30.25c and for the quarter gained 12%. The lower U.S. soybean inventories on September first were reported as totalling 169 million bushels, down from 215 million the year earlier according to the USDA. Our favorite continue to be soybeans and our price estimate remains steady of $19-$20 per bushel.
Meats: December cattle closed at $1.2460, down 57.5 points and remains under marketing pressure. With lighter supplies of fattened cattle for slaughter late winter and early spring next year, we could see renewed buying interest. We continue to favor cattle but would not add to current long positions at this time. December hogs closed at 73.95c per pound, up 35 points on expectation of continued increased China pork purchases. We continue to favor the long side of hogs for a move to the 76-78c level.
Coffee, Cocoa and Sugar: December coffee closed at $1.735 on Friday, down 8 points tied to record high exports from Vietnam. We continue to favor the long side of the December contract tied to tight old crop supplies. Keep stop protection in place. December cocoa closed at $2,516 per tonne, up $34.00 on light shortcovering awaiting fresh fundamentals from West African main crops. Dealers have indicated a weak third quarter European cocoa grind figure and a reduction in consumption. We would hold current longs but not add. Keep protective stops in place. March sugar closed at 20.42c per pound, up 3 little ticks and selling pressure from reports of a large Chinese sugar output increase of 22% from the prior year could keep prices at or around current levels. We see no "future" for sugar at the moment.
Cotton: December cotton closed at 70.65c per pound, down 88 points tied to the dollar strength. The global economic uncertainty could prompt reduced demand and we could see further pressure should the dollar continue to gain momentum against the Euro. We prefer the sidelines for now unless the Euro zone financial situation improves.