Grains and Oilseeds: December corn closed at $7.61 ½ per bushel, up 3/4c tied to tight supplies but demand remains weak after trading recently as high as $8.49 and is now back to mid July pricing. We prefer the sidelines in corn. December wheat closed at $8.71 per bushel, up 2 1/2c on profittaking after recent buying pushed prices to over $9.51 per bushel. The dollar premium to corn is after trading flat with corn recently. The reports that Ukraine may limit exports and on expectation for dry weather curbing production in the U.S. We would hold any long positions but would not add for now. November soybeans closed at $15.33 per bushel, down 12 1/2c on profittaking after Thursdays rally. November beans are two dollar off the recent high but three dollars off the June lows. Hold long positions but don’t add for now.
Meats: December cattle closed at $1.27375 per pound, down 67.5 points and are just about mid-way between the recent high of $1.31 and the June low of $1.23. We like cattle tied to reduced herd sizes tied to marketings after dry, hot weather caused high feed prices but would only buy on dips. December hogs closed at 79.65c per pound, p 80 points, after touching 79.8c per pound, the highest since August. Shortcovering after recent hog marketings tied to feed prices shortened herd sizes. Rising demand for pork and reduced supplies could prompt additional buying but 82c poses significant technical resistance. Hold longs but raise stops.
Coffee, Cocoa and Sugar: December coffee closed at $1.6110 per pound, up 2.5c on shortcovering but ample global supplies could add to recent selling pressure. Stay out for now. December cocoa closed at $2,469 per tonne, up $31 after a report showed cocoa bean usage in North America was higher than previously forecast. We like cocoa but use stop protection on any new buying. March sugar closed at 20.28c per pound, up 49 points. Sugar may have found support around 20c on shortcovering after recent heavy long liquidation. We like the long side but only due to potential additional shortcovering. Use stops.
Cotton: December cotton closed at 76.6c per pound, down 1.12c after the recent rally that saw prices move 8c higher in a week. Reports that cotton held in the ICE exchange warehouses were at a 17 year low prompted the buying We favor the long side of cotton but use stop protection. On further rallies of a cent or more, raise the trailing stops since the U.S. harvest could be larger than previously estimated.