Grains and Oilseeds: December corn closed at $7.27 per bushel, up 4 3/4c on Friday but for the week lost 1/5%. Some cancellations by China impacted the grains and soybeans this week and we prefer the sidelines in corn. December wheat closed at $8.38 per bushel, down 8 3/4c continuing it’s downward slide and the longest since September of 2011. Stay out for now. March soybeans closed at $13.68 per bushel, down 16c and to its lowest price in almost five months on Chinese purchase cancellations and improved planting progress in South America. We are on the sidelines here as well. Any change in fundamentals could put us back in the "bull" camp.
Meats: December cattle closed at $1.2615 per pound, up 55 points on shortcovering against the dollar and on declining supplies. We like cattle from here after trading as low as $1.2395 recently. We may have seen an interim bottom. Use stop protection. December hogs closed at 80.325 per pound up 25 points on speculation that U.S. pork supplies are declining. Hogs have had a nice run from its September low around 70c and we could see additional buying on both speculative and technical considerations
Coffee, Cocoa and Sugar: December coffee closed at $1.4710 per pound, unchanged and remains near its recent bottom after declining steadily from the $1.8545 recent high. We prefer not to "stand in the way of a locomotive" and even though some correction can be expected, the continued long liquidation in the face of reduced European demand and reports that Europe is in recession. March cocoa closed at $2,398 per tonne down ¾%, it’s biggest decline for the most active contract since October 24th. This week cocoa managed a 1.7% gain. The selling was in response to reports that supply concerns in Ivory Coast, the world’s largest producer, had eased somewhat. We would look to buy on any dip but using stop protection. March sugar closed at 19.15c per pound, up 7 points on light shortcovering after recent long liquidation tied the International Sugar Organization report that Brazil’s sugar industry could increase output to a record high next season. Its first forecasts for the 2013-2014 season could halt any upward price progress. The selling may be overdone for now so hold any recently purchased calls.
Cotton: December cotton closed at 72.73c per pound, down 1.23c but recent indications of plantings moving from cotton acreage to soybeans could prompt additional shortcovering and new buying from its recent 69.03c lows. We like cotton but as with other markets due to the unknowns related to the U.S. tax extension situation which if not resolved by December 31st could cause havoc in the financial markets and spillover to commodities.
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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.