Global markets driving skepticism, exuberance

Stock and Commodity Report

Grains and Oilseeds: July corn closed at $6.19 ½ per bushel, down 5c on concern over reduced demand from China. However, with the unfavorable weather conditions in the U.S. Midwest we could see some supply concerns emanating and would look at call positions for corn. July wheat closed at $6.90 ¼ per bushel, down 13 1/2c but favor the sidelines in wheat based on adequate supplies and reduced demand. July soybeans closed at $13.82 ½ per bushel, up 10 1/4c tied to expectations of increased demand for sorghum from China. We continue to favor the long side of soybeans but would use stop protection.

Meats: June cattle closed at $1.2250 per pound, down 40 points on continued long liquidation and adequate supplies as well as E.Coli fears stemming from flood waters. We would hold current long positions and add on set backs but keep stops in place. June hogs closed at 92.375c per pound up 55 points on further shortcovering and new buying in front of the summer barbecue season. Improved Chinese demand also a factor. We like hogs from here but use stops.

Coffee, Cocoa and Sugar: July coffee closed at $1.3370 per pound, down 3.7c on continued pressure from reduced demand and increased supplies. Stay out for now. July cocoa closed at $2,367 per tonne, up $7.00. The completed West African harvest and expectations for reduced production next year could improve pricing further. We like cocoa from here but use stops. July sugar closed at 17.37c per pound, down 1 tick and is on our "no interest" list.

Cotton: July cotton closed at 84.32c per pound, up 1.09c tied to delays caused by flooding along the delta and reduced plantings. We like cotton from here for the intermediate term. Use stop protection.

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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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