Markets turn attention to Fed tapering expectations

Grains and Oilseeds:

December corn (CBOT:CZ13) closed at $4.59 per bushel, down 7 1/4c tied to the USDA increased outlook for the domestic harvest. December wheat (CBOT:WZ13) closed at $6.40 ½ per bushel, down 12 1/2c also tied to the USDA increased estimate for global production of 0.5% from the prior month. November soybeans (CBOT:SX13) closed at $13.81 ¾ per bushel, down 14 1/4c tied to expectations of a 4.8% rise in inventories. We are on the sidelines for now after having been bullish for soybeans. Take whatever profits remaining in bean calls.

Meats:

October cattle (CME:LCV13) closed Friday at $1.2535 per pound, up 52.5 points tied to South American weather which added to the attraction for U.S. animals. We could see further price gains but with prices in the middle of recent movement, it could go either way. Stay out for now. October hogs closed at 90.7825c per pound, up 52.5 points as with cattle but new buying by commodity funds is supporting prices. After the recent price gains however, tied to some extent to feed prices, we could see a correction so we prefer the sidelines here as well.

Coffee, Cocoa and Sugar:

December coffee (NYBOT:KCZ13) closed at $1.1985, per pound, down 75 points and remain at 4 year lows. We prefer the sidelines. December cocoa (NYBOT:CCZ13) closed at $2,598 per tonne, up $7.00 tied to the decline in certified stocks in New York and producer pricing. The sharp rally from the June lows is prompting higher prices at the retail level and some resistance to higher chocolate prices are expected. While we could see yet higher prices, we are concerned over the extent of any correction from here. Stay out. October sugar (NYBOT:SBV13) closed at 17.11c per pound, down 7 ticks but has formed a triple top technically. Without follow through we could see a return to recent lows so we prefer the sidelines here as well.

Cotton:

October cotton (NYBOT:CLV13) closed at 85.02c per pound, down 86 points in sideways trading after trading at the mid-August high of 93.90c to the early September 82.30 low. Stay out for now.

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About the Author
John Caiazzo

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.

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