Grains and Oilseeds: July corn closed at $6.54 ¼ per bushel, up 10 3/4c on short-covering after recent weakness tied to an expected record U.S. crop. We prefer the sidelines. July wheat closed at $6.81 per bushel, down 4 1/2c tied to hedging pressure but with the storms in the growing areas, I would not want to be short wheat even though I see no definitive export demand and increased production from Russia. Stay out for now. July soybeans closed at $15.16 per bushel, up 5 3/4c on continued reports of farmers withholding supplies from the market and weather providing ideal growing conditions. We have preferred soybeans in this group but with no new fundamentals we are on the sidelines for now.
Coffee, Cocoa and Sugar:
July coffee closed at $1.2215 per pound, down 1.55c on continued speculative selling and tied also to the weak Brazilian Real. Large supplies from producers such as Vietnam as well as good growing condition in Colombia and Central America should continue to pressure prices. We are on the sidelines. July cocoa closed at $2,240 per tonne, down $68 on long liquidation and a lack of fresh fundamentals from West Africa. Weak demand also a factor as a global recession is evident. We favor the sidelines here as well. July sugar closed at 16.75c per pound, up 51 points on short-covering but remains mired at the lows. We are on the sidelines here as well.
July cotton closed at 90.21c per pound, down 1.51c on profit-taking after recent sharp gains from early June lows around 79c. Poor weather in the Delta and Southeast have impacted production and reduced estimates. We think cotton may have further gains but would take some profits off the table here.