Grains and Oilseeds: December corn closed at $7.52 per bushel, down 21 1/4c or 2.7%. Profittaking and disappointing export data the main factor. Export sales reported were 14,200 tonnes against trade expectations of 300,000-400,000 tonnes. However lower ending stocks and production numbers could support prices from here. We continue to prefer the sidelines in corn. December wheat closed at $8.57 per bushel, down 29c on profittaking reducing the week’s gain to 2.5%. We prefer the sidelines in wheat as well. November soybeans closed at $15.22 1/4 per bushel down 26 1/4c on the U.S. government report showing improving global supplies. We had been bullish for soybeans for some time but stops were touched off and we are now awaiting fresh fundamentals before re-establishing our bullish posture.
Meats: December cattle closed at $1.25425 per pound, down 50 points tied to poor export data but positive price optimism is keeping prices within the recent range of $1.30 and $1.22. Weak overseas demand tied to ongoing economy concerns providing pressure. We remain favorable towards cattle but would only use call options rather than direct futures purchases. December hogs closed at 78.425c per pound, up 92.5 points tied to stronger U.S. demand. We could see additional upward momentum after recent lows around 70c per pound. Resistance on a technical basis around 80-82c could halt the rally but shortcovering could emerge if resistance breached and U.S. demand continues.
Coffee, Cocoa and Sugar: December coffee closed at $1.6230 per pound, up 1.55c on shortcovering but with high Arabica stocks we could see momentum deteriorate. Prices remain near lows after the selloff from the July $1.94 highs. We prefer the sidelines for now tied to large speculator call positions. December cocoa closed at $2,363 per tonne, up $12 after initial weakness in front of next Tuesday’s third quarter grindings data for Europe. A weak economy could reduce the grind report which would prove negative as relates to demand. Cocoa remains mid-way between its June $2,000 low and September $2,700 high and could go either way as determined by the demand reflected in the grind figures. We like the sidelines for now. March sugar closed at 20.14c per pound, down 31 points for its biggest three day decline in a year tied to fund long liquidation which may have exceeded fundamentals. We could see shortcovering push prices back to the 22-23c level but would use stop protection for any new buying.
Cotton: December cotton closed at 71.42c per pound, up 71 points but remains rangebound between 65-75c. Recent USDA estimate for world inventories was raised and reduced forecast for use by China, the top consumer, could keep pressure on cotton going forward. With estimates for inventories to remain adequate for the next nine months, we prefer the sidelines for now.