Energies: April crude oil closed at $102.20 per barrel, down 55c on its first full day of trading as the front month. Crude managed a gain for the week tied to concerns over weather forecasts. Some buying came as the EIA reported supplies for crude up by a million barrels against estimates for a gain of 1.9 million barrels. March Natural Gas gained 1.24c per million BTUs to close at $6.188. Forecasts for continued cold weather and concerns over supplies and increased demand prompted additional support for natural gas. The EIA reported total supply of natural gas at 1,436 billion cubic feet for the week ended February 14and was 982 billion cubic feet less that a year ago. We could see still higher prices but weather remains the dominant factor.
Copper: March copper closed at $3.2865, per pound, up 75 points on light short covering after recent selling tied to the weak housing data. We remain sidelined but with a bearish bias.
Precious Metals: April gold closed at $1,324 per ounce, up $7.10 tied to concern over the Ukraine situation and shortcovering in front of the Group of 20 nation’s weekend meeting. We remain on the sidelines since the price action in gold is not reflective of geopolitical concerns as has been in case in years past. March silver closed at $21.84, up 15.6c or 0.7% and for the week gained 1.7%. We continue to favor silver over gold for those investors that must have a precious metal in their portfolio. April platinum closed at $1,427.90 per ounce, up $15.40 but lost 0.2% for the week. The gain on Friday was tied to a lack of any resolution for strikes at South African mines. March palladium closed at $740 per ounce, up $3.70 or 0.5% and for the week gained 0.3%. We continue to favor palladium over platinum.
Grains and Oilseeds: March corn closed at $4.52 ¼ per bushel, down 3.5¢ tied to expectations corn inventories could be the highest in nearly ten years according to the USDA. We prefer the sidelines. March Wheat closed at $6.09 ¾ per bushel, down 6.5¢on an increase in domestic stocks and declining U.S. feed demand weak exports. Canadian supplies are expected to reflect a 20-year high and continued supplies from other major exporting countries. We prefer the sidelines. March Soybeans closed at $13.71 ¾ per bushel, up 13.5¢ on short covering after recent weakness tied to expected increases in soybean stocks. Record exports could continue to deplete supplies even against a record Brazilian harvest. We like beans and would add to long positions from here.
Livestock: April cattle closed at $1.41625 per pound, down 2.5¢ on a correction after recent sky-rocketing prices. Weather a factor cutting supplies but pressure is to be expected as prices at the retail level are keeping shoppers away from beef to some extent. We prefer the sidelines after having been bullish in the past. April hogs closed at 99.25 per pound, up 1.425¢ on concern tied to the ongoing pig virus epidemic. For now we are on the sidelines.
Coffee, Cocoa and Sugar: March coffee closed at $1.6880 and its largest weekly gain in over 14 years tied to the Brazilian drought. Heavy shortcovering was evident in Friday’s action and could continue into the new week. We prefer the sidelines after having been bullish in the recent past. March cocoa closed at $2,925 per tonne, down $25 after recent buying tied to increased demand and expectation for a supply deficit. We prefer the sidelines in cocoa. March sugar closed at 16.76¢ per pound, up 43 points on short covering tied the Brazilian drought and short covering. Continued fears over cane damage in Brazil’s key Centre South region from a lack of moisture could push prices higher. We prefer the sidelines in sugar.
Cotton: March cotton closed at 86.57¢ per pound, up 20 points and remains near highs tied to the rally from the November 2013 lows around 67¢. Reports of recent Chinese cotton farmers cutting plantings a factor in the gains. We could see higher prices but suggest taking some profits off the table. We had been bullish for cotton and now on the sidelines.