June 6, 2008

Grains

Corn futures closed the week 8.4-percent higher, with the July contract settling 51 1/2 cents higher at $6.50 3/4 a bushel. Concerns that heavy rains in the Midwest have flooded fields, closing the window on replanting that was needed in areas of the Midwest, was noted for the gain this week.

After the close Monday the USDA reported corn, which has emerged from the ground, climbed from 52 to 74-percent over the past week. Well below the five year average of 89-percent emerged.

Temperatures averaged 8-degrees below normal in parts of the Midwest over the past month, with some areas getting four times the normal amount of rainfall, National Weather Service data shows.

Soybean futures closed the week nearly 7-percent higher, with the July contract settling 95 cents higher at $14.57 1/2 a bushel. Surging energy prices and a demand shift from Argentina to the U.S. was noted for the rally in the beans.

Argentine farmers have halting sales of crops and livestock in protest over canceled talks by officials. This is the third protest in the past 2-months over increasing export taxes.

Demand for soybeans traditionally shift from the U.S. to South America this time of year as farmers in Argentina have just harvested, while farmers in the U.S. are beginning to plant. Any disruptions add pressure to already tight U.S. supplies.

After the close Monday, the USDA reported that soybean plantings as of June 1st came in at 69-percent complete. Well below the 5-year average of 81-percent and lower than analysts' estimates for between 70 to 75-percent.

July wheat closed the week 6.6-percent higher at $8.11 per bushel, July rice closed the week 2.4-percent higher at $19.96 per hundredweight, July soy-meal closed the week 9.2-percent higher at $373.00 per short ton, and July soy-oil settled the week 5-percent higher at 64.34 cents per pound.

Softs

Orange juice futures closed the week 7-percent higher with the July contract settling 7.6 cents higher at $1.1560 a pound. Atlantic storm season began June 1st and hurricane fears pushed the market higher on the week.

Cocoa futures closed the week 5.7-percent higher, with the July contract settling $155 higher at $2,878 a metric ton. Cocoa broke above key resistance levels on speculation that output in the Ivory Coast will be lower, due to a possible disease outbreak in the region.

July coffee closed the week nearly unchanged at $1.3585 a pound, July cotton closed the week 1.2-percent higher at 66.52 cents a pound, and July sugar closed the week nearly 3-percent lower at 9.74 cents a pound.

Meats

Cattle closed the week lower, with June live cattle settling 2.8-percent lower at 93.85 cents a pound. Falling cash prices were noted for the decline on the week. August feeder cattle closed the week 3.4-percent lower at $116.02 per hundredweight.

Hogs closed the week lower, with July pork bellies settling 7.5-percent lower at 73.20 cents a pound. Weak cash hog bids were noted for the sell-off in hogs. July lean hogs closed 3-percent lower on the week at 75.32 cents a pound.

Speculation that an increase in hog weights in Iowa, and southern Minnesota are showing signs that producers aren't current in marketing their animals were seen as bearish to the market.

Metals

Gold futures closed the week nearly unchanged with the August contract settling $8.50 higher at $899 an ounce. Bernanke's pro-dollar comments sent gold lower early in the week, before poor employment numbers sent the dollar lower helping gold settle the week less than 1-percent higher.

Federal Reserve Chairman Ben Bernanke said the Fed is working with the Treasury to "carefully monitor developments in foreign-exchange markets" and is aware of the effect of the dollar's decline on inflation and price expectations.

The U.S. unemployment rate jumped by .5-percent in May to 5.5-percent the highest since October 2004. This marked the largest increase in seasonally adjusted unemployment in 33 years, data from the Labor Department showed Friday.

July silver closed the week 3.3-percent higher at $16.87 an ounce, July platinum closed the week 3.4-percent higher at $2,081.30 an ounce, and July palladium closed the week nearly unchanged at $433.80 an ounce.

Energy

Crude oil futures closed the week 8.8-percent higher, with the July contract settling $11.19 higher at $138.54 a barrel. Speculation that Israel will strike Iran and strength in the US dollar Friday sent crude to a record close.

Israeli Transport Minister Shaul Mofaz was quoted by Yedioth Ahronoth newspaper as saying that if Iran continues with its program for developing nuclear weapons, Israel will attack.

Morgan Stanley said they expect a short-term spike in oil prices, with crude-oil shipping patterns suggesting that prices for West Texas Intermediate will reach $150 a barrel by July 4.

Natural gas futures closed the week over 8.5-percent higher, with the July contract settling at $12.693 per million British thermal units. Forecasts for hot weather across much of the Northeast and Midwest, and concerns about the production in the Gulf of Mexico, as we approach the start of the Atlantic hurricane season, sent natural higher.

July heating oil closed the week 8.4-percent higher at $3.974 a gallon, and July RBOB gasoline closed the week 6-percent higher at $3.548 a gallon.

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