October gold (COMEX:GCV13) closed at $1,396 per ounce, up $25.30 or nearly 2% tied to the possibility the U.S. Federal Reserve would delay any slowdown in its monetary stimulus policy. Gold had traded as high as $1,399.40 during the session posting its highest level since early June. Heavy short-covering is the main feature to trading. December silver closed at $24.035 per ounce on Friday, up 95.5c and remains our favorite of the two. Gold gained 1.8% of Friday against silvers gain of 4.1%. For those that "must have" a precious metal in their portfolio, we continue to favor silver over gold. Otherwise we question the validity of a continuing rally in precious metals as our overall expectation of any inflationary pressure, the usual stimulus for precious metals, remains in question. October platinum closed at $1,541.60 per ounce, up $1.50 and for the week gained 0.9%. September palladium closed at $750.85 per ounce, down $4.20 or 0.6% and for the week lost 1.6%. We favor the sidelines for now.
Grains and Oilseeds:
December corn closed at $4.69 ½ per bushel, up 5c tied to reduced yield expectations and rain delays in crop development for both soybeans and corn. December wheat closed at $6.45 ¼ per bushel, up 4 3/4c also tied to crop concerns prompted by weather. November soybeans closed at $13.25 ¾ per bushel, up 39c and is our favorite in the group. Reduced yields also played a part in the short-covering and new buying of soybeans. Add to call positions on any setbacks.
October cattle closed Friday at $1.2690 per pound, down 30 points tied to higher feed prices and remain range-bound. We continue to prefer the sidelines. October hogs closed at 85.075 per pound, up 67.5 points on short-covering after recent selling tied to lower cash hogs and wholesale pork prices. We prefer the sidelines
Coffee, Cocoa and Sugar:
December coffee closed at $1.1720, up 15 ticks on Friday but weakness persists tied to slow purchasers by roasters. We prefer the sidelines. December cocoa closed at $2,465 per tonne, up $11.00 on short-covering on improved demand but remains sideways after recent gains. We prefer the sidelines. October sugar closed at 16.44c per pound, up 16 ticks on shortcovering but remains under pressure from good harvest weather in Brazil. Sugar remains on our no interest list for now.
October cotton closed Friday at 85.22c per pound, up 1.27c on shortcovering after recent sharp declines tied to production estimates from India. We prefer the sidelines in cotton pending further fundamental developments. We will keep our clients informed as to any changes in opinion.