Grains and Oilseeds:
September corn (CBOT:CU13) closed Friday at $4.76 ¼ per bushel, down 11 1/4c tied to beneficial rains in the Midwest with prices down to 34 month lows tied to the expectation of a huge crop this fall. We continue to prefer the sidelines in this group as recent storms have so far failed to provide concerns. September wheat (CBOT:WU13) closed Friday at $6.60 ½ per bushel, up 2 1/2c on short-covering and better global demand. November soybeans closed at $11.81 ¼ per bushel, down 11 1/4c on technical selling that pushed prices through support levels and reduced concerns over tight supplies in the cash market. We prefer the sidelines but a few soybean calls may be in order for speculators. Otherwise stay out until fresh fundamentals emerge either from the U.S. or Brazil.
I was unable to monitor the activity in the livestock markets this past week and therefore cannot comment other than to provide closing prices. October cattle closed Friday at $1.2480, up 30 points while October hogs lost 5 points to close at 83.85c per pound. These markets remain uninteresting for now.
Coffee, Cocoa and Sugar:
September coffee (NYBOT:KCU13) closed at $1.1820 per pound, up 2.6c on reports that the Brazilian Agricultural Ministry would announce measures on Monday to improve prices after touching four year lows on Thursday. The strength in the Brazilian Real has kept farmers from selling their crops overseas since they receive less for their crops tied to the weak U.S. dollar. We will have to wait and see what particular action the Ministry announces. Stay out for now but a few calls may be in order for speculative clients. September cocoa closed at $2,291 per tonne, down $10. Recent reports that the West African output for 2012-13 was above that of last year as well as Ivory Coast port arrivals above the prior year could continue to pressure prices. We prefer the sidelines in cocoa. October sugar closed Friday at 16.74c per pound, down 9 points even after some concern emanated on the possibility of frost damage to the Brazilian sugar cane crop. We prefer the sidelines here as well.
October cotton (NYBOT:CTV13) closed Friday at 85.08c per pound, down 80 points tied to the International Cotton Advisory Committee indications of an increased estimate for world cotton stocks. The USDA expectation that China’s poor weather in the producing province of Xinjiang could reduce output from lower sowings was a positive factor in the light short-covering but prices remain mired in the middle of the 81.80 to 90.80c recent May/June range. We prefer the sidelines.