Frankenstorm to impact stocks, commodities this week

Commodities, stock roundup

Grains and Oilseeds: December corn closed at $7.38 ¼, down 3 3/4c tied to weak export data and reduced ethanol demand. We prefer the sidelines in corn. December wheat closed at $8.64 ½, down 8 1/4c tied to plantings in line with expectations. Profittaking after recent strength also a factor in front of the weekend. We don’t expect the East coast Hurricane to have any material effect on shipments or supplies. We prefer the sidelines here as well. November soybeans closed at $15.60 ½, down 3 1/2c and appears to have completed a "near term bottom". Weekly export inspections were favorable and we like the long side of soybeans once again.

Meats: December cattle closed at $1.2525 per pound, down 40 points as wholesale prices declined. Prices remain under pressure after recent heavy long liquidation and prices remain at or near lows. We could see additional shortcovering but would use stop protection for any new buying. December hogs closed at 78.88 per pound, up 75 points on shortcovering and new momentum buying. Improved demand and continued low herd sizes tied to the higher feed prices providing recent strength. We could see continued strength and would buy but with stop protection.

Coffee, Cocoa and Sugar: December coffee closed at $1.5775, down 3.25dc on economic concerns globally and ample supplies. We continue on the sidelines in coffee. December cocoa closed at $2389 per tonne, up $6.00 on strong demand for dark chocolate with high cocoa content and increased demand for cocoa powder. We could see further price gains and would hold any long positions. March sugar closed at 19.43c up 8 ticks but remains weak tied to global surplus. We could see some shortcovering after recent long liquidation.

Cotton: December cotton closed at 73.00c unchanged and remains in a tight range tied to the combination of China’s cotton stockpiling program and offsetting pressure from record global inventories. We look for continued sideways pricing for now.

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About the Author
John L. Caiazzo



Information provided is from sources deemed to be reliable but not guaranteed. Futures and Options trading involve a high degree of risk and may not be suitable for everyone. John Caiazzo is a registered commodities broker with over 40 years experience in investments and opinions are his own and not of the Futures Commission Merchant to which he introduces his clients.

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