Meats: October cattle closed at $1.27875, down 22.5 points after the recent rally prompted by the Tyson ban on cattle using Zilmax. Doubts that the ban would impact demand prompted Friday’s profit-taking after the recent price gains tied to supply concerns over reduced availability of beef tied to that ban. We prefer the sidelines October hogs closed at 86.625c per pound, down 67.5 points on disappointing demand even as China’s economic situation improved and was expected to improve demand. We prefer the sidelines here as well.
Coffee, Cocoa and Sugar: December coffee closed at $1.2330 per pound, down 1.4c after recent short-term rally attempts appear to have failed. Crop development in Central America appears good as well as harvest conditions in Brazil so we prefer the sidelines. December cocoa closed at $2,489, up $4.00 per tonne on continued strength but some proft-taking is in order as weather appears to be improving in Western Africa. Beneficial rains are expected in Ghana and Ivory Coast after recent dry weather prompted reduced production. We could see further price gains and would hold any longs or calls in cocoa. October sugar closed at 16.95c per pound down 24 points and remains on our "no interest" list for now. Improved ethanol demand failed to offset the overwhelming supplies so we prefer the sidelines.
Cotton: October cotton (NYBOT:CTV13) closed Friday at 93.30c per pound, up 1.66c on continued talk of production problems in the U.S. Southeast as well as in Texas. Weather problems continue to provide short-covering and new buying but improved weather in India could provide corrective pressure. We could see further price gains tied to U.S. weather concerns.
About the Author
John has over 40 years experience at major U.S. Brokerage firms as Manager and Director of various International Divisions and is the founder of his own trading and brokerage firms. Over the years John has gained a wealth of knowledge and experience in all aspects of investments and trading. He was also a floor trader at the Commodity Exchange in New York. He formed Acuvest in 1999 and can be reached at futures@acuvest.com.