Corn: December Corn futures traded higher in early trade, as traders gear up for a possible decline in the U.S. crop ratings last week. The USDA reported 62% of the U.S. Corn crop was rated good to excellent last Monday, down 2% from the prior week. Less than expected rainfall in parts of the Corn Belt may lead to a lower crop rating in this afternoon’s report. At the close of overnight trade, December Corn was trading at $3.38 ½, up 2 cents a bushel.

S&P 500 futures: More volatility is expected in the S&P 500 futures this morning, as traders reassess last week’s 87-point sell off in the S&P futures. Since the re-opening on Sunday, September e-mini S&P futures have traded in a nearly 15-point range, with over 200,000 contracts already being traded as of 6:30 am Chicago time. With no major economic reports out today, traders will look towards corporate earnings reports and any additional news on the sub-prime loan situation to gauge their trading decisions today. In early trade, September mini-S&P 500 futures are trading at $1461.00, up 3.00.

Treasury futures: September 10-year Note futures are trading higher in early trade, following the lead of the European Bond market, as credit spreads continue to widen. This is causing a flow of funds into the Government Bond market, as traders and investors look for a “safe haven” to park funds. September 10-year Note futures are trading at 107-200, up 0-075.

Soybeans: A higher open is expected for Soybean futures following a rally in overnight trading after the USDA reported a decline in U.S. Soybean crop conditions last week. Currently, 68% of this year’s Soybean crop is now rated good to excellent – down 3% from last week and on the high side of estimates. Michigan and Minnesota showed some of the largest declines in crop conditions, with Michigan reporting only 30% of its crop rated good to excellent, and Minnesota at 38%. At the close of the overnight session, November Soybeans were trading at $8.51, up 3 ¼ cents a bushel.

Crude Oil: Energy traders jumped back on the bullish Oil bandwagon, with the lead month September contract hitting a new 11-month high this morning. Crude futures got a lift from rising equity markets yesterday, after last week’s 87-point plunge in S&P 500 futures sparked fears that energy demand may wane. However, traders continue to focus on current world Oil supplies and the backwardation in Oil futures prices, showing the premium traders are paying for near-term delivery. In early trade, September Crude Oil is trading at $77.31, up $0.48.

Copper: Base metal traders bid up Copper prices this morning, following news that workers at three Copper mines in Mexico were planning strikes. This news overshadowed a labor agreement reached at Codelco in Chile to end a 36-day strike. Some technical traders believe the failure of September Copper to move below support at 350.00 is responsible for the recent price rise. LME warehouse stocks fell by 50 metric tons this morning to stand at 101,750 metric tons. In early trade, September Copper is trading at 364.20, up 5.35.

After an initial spurt to two-week highs, Corn futures lost their luster, as commercial selling and updated weather forecasts put bears in control. December Corn started the day session slightly higher, with forecasts of above-normal temperatures in the Midwest keeping traders concerned that crop conditions would continue to deteriorate. However, some private forecasts are now calling for increased precipitation in the parched regions of South Dakota and Minnesota going into the weekend, putting pressure on Corn futures. In addition, failure to hold above the widely-watched 20-day moving average in December Corn – currently at 3.42 ¾ – sparked some momentum-based selling. Resistance for December Corn is seen at the July 17th highs of $3.48 ½, with support at the recent lows of $3.24 ½. December Corn closed at $3.35 ¾, down 6 ½ cents a bushel.

After posting a record high of $78.77 for a nearby contract, September Crude Oil plunged over $2 at its lowest point of the session, despite a larger-than-expected drawdown of U.S. Crude stocks last week. In its weekly energy stocks report, the EIA reported that U.S. Oil inventories fell by 6.5 million barrels last week, down sharply from average forecasts calling for a decline of 700,000 barrels. Refineries ramped up production significantly, with utilization reported at 93.6% – well above estimates. Gasoline and Distillates both showed increases with gains of 600,000 and 2.8 million barrels, respectively. After the initial rally to a record high, Crude Oil futures were hit with a wave of selling, as traders booked profits with the expectation that refined product inventories should increase given the sharp rise in utilization. September Gasoline made another attempt to test the $2 level, falling as low as $2.0020 before buyers emerged and prices rebounded over 2 cents off the day’s lows. The 20-day moving average at $74.72 looks to be the next support point for September Crude, with today’s highs at $78.77 seen as resistance. September Crude Oil closed at $76.51, down $1.70.

Today was quite the sea saw battle between the bulls and the bears in the US stock market. In the end, the bulls won today’s battle. The Dow closed the day at 13,366 gaining 154 points. The S & P ended the day 10 points on the positive side of the fence while the Nasdaq closed at 2553, up 7 points.

In the news, pending home sales came out with a surprise increase of 5% for the month of June. This could be a leading indicator of new and existing home sales for the report coming out at the end of August. The ISM index came in below expectations at 53.8. The concensus was 55.5.

Bond yields were on the rise today as the 10 year note closed the day with a yield of 4.78%.

In the overseas markets, the Nikkei closed yesterday at 16,870 (down 2.19%) and the Hang Seng closed at 24,455 (down 3.15%).

Economic Data Scheduled for Thursday, August 2, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: Initial Jobless Claims (Consensus 310K)
9:00 AM: June Factory Orders (Consensus +1.0%)

Canada
None

U.K.
6:00 AM: BOE Interest Rate Decision (Consensus 5.75%)

European Union
4:00 AM: June PPI Mom (Consensus +0.3%)
4:45 AM: ECB Interest Rate Decision

Japan
None

Crude Oil: Follow-through selling from Friday’s weak close is keeping Crude Oil futures on the defensive in early trade. In addition, OPEC exports for July climbed by 181,000 barrels a day in July to 30.72 million barrels, according to a Dow Jones Newswire survey. Technical traders will note that September Crude Oil fell below the widely watched 20-day moving average today, which sparked further long liquidation selling. In early trade, September Crude Oil is trading at $74.06, down $1.42

S&P 500 futures: Buying emerged in the S&P 500 futures this morning, taking back some of the sharp losses from Friday after a disappointing U.S. Non-farm payrolls report. Lower Crude Oil prices and a rally in some of the major European stock indexes are helping support S&P futures this morning. In early trade, the September mini-S&P 500 futures are trading at 1453.00, up 10.00.

Soybeans: November Soybeans fell in overnight trading, as rain in Iowa and Illinois over the weekend figures to benefit the Soybean crop during its key pod-setting stage. In addition, traders will be squaring their positions this week ahead of the USDA August crop report due out on Friday. At the end of the overnight session, November Soybeans are trading at $8.46 ¾, down 14 ¼ cents.

No major U.S. economic reports scheduled today.

Stock Index futures: Equity index traders may get a bit of a reprieve this morning after several days of extreme volatility, as the market gears up for the end of FOMC meeting this afternoon and the announcement on interest rates. The market expects the Fed to keep interest rates steady at 5.25%, but will be keenly interested in its statement after that decision is announced, especially in regards to how the Fed plans to handle the fear surrounding the subprime loan situation. In early trading, September S&P 500 futures are trading at 1467.00, down 0.75

Wheat: Another day, another contract high in December Wheat futures in Chicago, as surging demand due to tight world supplies has traders continuing to bid up prices. Weekly Wheat export inspections came in at 25.127 million bushels for the week ending August 2nd, well above the high end of estimates. Morocco issued a tender for 630,000 metric tons of option origin soft Wheat, which is deemed supportive to U.S. Wheat futures. Paris million Wheat futures hit another new all-time high this morning, trading as high as EUR220 a metric ton in the November contract. The U.S. Winter Wheat harvest is nearly completed, with the USDA reporting 94% harvested so far, up 6% from last week, and 3% above the five-year average. At the end of the overnight session, December Wheat was trading at $688 ½, up 5 cents a bushel.

Lean Hogs: October Lean Hog futures plunged yesterday after reaching contract highs on Friday, as traders liquidated long positions fearing a decline in wholesale pork demand while slaughter rates continue to increase. However, prices may remain volatile in the near-term, as many believe China, the world’s largest pork consumer, will need to increase its imports of pork due to a supply shortage after disease ravaged the country’s pig crop. Wholesale pork prices in China were up 44% through July due to supply shortages. October Lean Hogs closed yesterday at 75.05, down 2.55.

U.S. Economic reports for August 7th 2007

7:30 AM: 2Q Advance Productivity (Consensus +2.0%)
1:15 PM: FOMC Policy Statement
2:00 PM: June Consumer Credit (Consensus $6 Billion)

Earlier this year, all grain traders wanted to talk about was the Corn market, as surging demand for Ethanol and livestock feed led some to question whether we could produce enough to meet demand. Fast-forward to August and that talk has cooled right along with Corn prices, as the Wheat market has quietly moved to the forefront in the minds of grain traders. Just this morning, Chicago December Wheat moved to a new contract high of $6.89 ½ per bushel, with Japan looking to tender for 131,000 tons and Egypt in the market for 55,000 tons as well. This follows a Morocco tender for 630,000 metric tons of optional origin Wheat. It appears that Mother Nature was not kind to Wheat growers this season, with excessive rains hurting the crops in the U.S. and France, while hot, dry conditions have played havoc with Canadian, Australian, and Ukrainian production. This is causing Wheat importers to try to lock in supplies – despite high prices – in fear that high quality Wheat will not be available in the coming months. Traders will keep a close eye on this Friday’s USDA crop production and supply/demand report, especially world ending stock figures.

Looking at the daily chart for December Wheat, we notice the resilience of the rally, as prices remain well above the 20-day moving average. In addition, the most recent Commitment of Traders report shows a battle between large and small speculators, with large specs holding a net-long position of 27,977 contracts and small specs net-short 27,781 contracts as of July 31st. With prices at contract highs, it will be interesting to see if the small specs can continue to hold their short positions in the face of commodity fund buying. The 14-day RSI has reached oversold territory with a reading of 75.21. $7.00 looks to be key resistance for December Wheat, with support found at the recent lows of $6.39. At the end of the day session, December Wheat was trading at $6.88 ½, up 5 cents.

Grain futures: It was a fairly quiet night in the Grain futures markets, as traders saved their strength for this morning’s USDA crop production and supply/demand report. Corn traders are looking for a moderate increase in production from the July report, with average estimates for a 12.909 billion bushel crop versus 12.840 billion in July. Soybeans are expected to also show a slight production rise to 2.653 billion bushels, up 28 million bushels from July’s report. All U.S. Wheat production is expected to decline, with average trade estimates calling for 2.129 billion bushels versus the 2.138 billion bushels in July’s report. At the close of the electronic overnight session, December Corn was trading at $3.45, down 3 1/4, November Soybeans were trading at $8.82, up 4 ½, and December Wheat was trading at $6.88 ½, down 1 ¼.

Cotton: U.S. Cotton production is expected to show a slight improvement in today’s USDA report, with average estimates calling for a 17.70 million-bale crop, up from 17.50 million bales in the July estimate. This is still well below 2006 production of 21.59 million bales, as producers switched acres from Cotton to Corn and Soybeans. In early electronic trade, December Cotton is trading at 6224, down 18.

Stock Index futures: No recovery in U.S. Stock index futures this morning, as major foreign stock indexes continue to slump, with the DAX 30 currently down 1.6%, the FTSE 100 down 3.01% and the Nikkei 225 closing down 2.37%. The European Central Bank added an additional 61.05 billion Euros ($83.6 billion) into the banking system today after yesterday’s 94.8 billion Euro injection. The Central Banks of Canada, Australia, and Japan joined the U.S. Federal Reserve in adding funds to help stem a short-term credit crunch. In early trade this morning, the September e-mini S&P 500 index was trading at 1440.00, down 18.00, while September mini-Dow futures are trading at 13185, down 142.

Mike Zarembski, Senior Commodity Analyst

The August crop report has something for everyone, with the USDA raising U.S. Corn production due to a sharp increase in yield estimates. However, difficult weather conditions forced the all Wheat production estimate down by over 20 million bushels from July’s figure. The following are key highlights from this morning’s report:

Corn: The USDA raised the U.S. Corn production estimate to 13.054 billion bushels, up from 12.840 billion bushels in July and above pre-report estimates. Average Corn yields are expected at 152.8 bushels per acre, up from 150.3 in July. 2007-08 Corn carryout is expected to increase to 1.516 billion bushels, slightly above the 1.502 billion estimate for July.

Soybeans: The 2.625 billion bushel estimate for July remains unchanged for August, though average analyst estimates were calling for a moderate increase to 2.653 billion bushels. Average yields also remained in place at 41.5 bushels per acre. Carryout totals were lowered to 220 million bushels, down 25 million bushels from July and 27 million bushels below analyst estimates.

Wheat: All Wheat production is expected to decline to 2.114 billion bushels, down from 2.138 billion in July and 15 million bushels below pre-report estimates. Increased world demand is expected to increase U.S. exports, with 2007-08 carryout totals expected to drop to 404 million bushels, down form 418 million bushels in July.

Cotton: The USDA lowered U.S. Cotton production estimates to 17.346 million bales, down from 17.50 million bales in July and well below the 17.70 average pre-report estimates. U.S. Cotton carryout is expected to fall to 5.80 million, down from 5.90 million in July.

Early calls by CBOT traders are for Soybeans to open up 3 to 5 cents higher, Wheat to open up 2 to 3 cents higher, and Corn to open 1 to 3 cents lower. In early trade, December Cotton is trading at 6225, down 17.

Mike Zarembski, Senior Commodity Analyst

Stock Index futures: After Friday’s volatile session, Stock Index futures are higher in early trade this morning, following assurances of liquidity from the Federal Reserve, European Central Bank, and Bank of Japan on Friday. European Stock indexes are higher this morning, lending some support to the U.S. market. On the economic calendar today is the release of Retail Sales figures for July at 7:30 AM Chicago time, with expectations for a rise of 0.2%, with ex-autos expected to show an increase of +0.4%. In early trade, September e-mini S&P 500 futures are trading 1461.75, up 10.75.

Copper: After falling to nearly 2-month lows on Friday, September Copper futures are showing signs of a recovery this morning, as rising demand from China, a decline in exchange stockpiles, and higher equity prices are combining to support prices. According to preliminary customs data from August 10th, Chinese Copper imports are up 49% from a year ago to stand at 1.72 million metric tons. In addition, Copper inventories in Shanghai fell by 1.7% last week, coming in at just below 90,000 mt. The London Metal Exchange reported Copper stocks fell by 200 mt this morning to stand at 114,300 mt. In early trade, September Copper is trading at 341.25, up 5.30.

Corn: Buyers continue to support Corn futures in overnight trading, as disappointing weekend rainfall amounts in parts of Iowa and Illinois have some traders concerned about potential yield losses due to the hot and dry weather. The recent rally comes despite Friday’s USDA estimates for a 13.054 billion bushel Corn crop. However, some traders are skeptical about this total given the iffy growing conditions in some parts of the Corn Belt. At the end of the overnight session, December Corn was trading at $3.54 ¼, up 3 ¾ cents.

Economic Data Scheduled for Monday, August 13, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: July Retail Sales
9:00 AM: June Business Inventories

British Pound: September British Pound futures fell below $2.0000 for the first time in nearly 6 weeks, after the U.K’s inflation rate dropped more than analysts had expected. Consumer prices rose by 1.9% in July, down from 2.4% in June and below the 2.2% consensus estimate. This was the first time the rate fell below the Bank of England’s 2% target rate in 16 months and gives cause for the BoE to keep rates steady at 5.75%. In early trade, September British Pound futures are trading at 1.9990, down 0.0135.

Soybeans: Soybean futures traded lower overnight, as yesterday’s USDA crop progress report showed 56% of the U.S. Soybean crop rated good to excellent as of Sunday – unchanged from last week. Traders were looking for a 1 to 2 percent decline in the crop ratings, which caused prices to give back some of Monday’s rally overnight. At the end of the electronic session, November Soybeans were trading at $8.79 ¼, down 2 ½ cents.

Gold: A stronger U.S. Dollar has put Gold futures on the defensive this morning, as lower growth and inflation rates in Europe are taking some of the shine off the precious metals sector. In addition, Gold traders will be looking toward this morning’s release of the July Producer Price Index (PPI) as a gauge to wholesale inflation levels in the U.S. In early trade, December Gold was trading at $679.00, down $1.90.

Economic Data Scheduled for Monday, August 14, 2007

(All times are U.S. Central Time)

U.S.
7:30 AM: July PPI (Consensus 0.1%, Core 0.2%)
7:30 AM: June Trade Balance (Consensus -$61.0 billion)

December Wheat futures continued their ascent above the $7 per bushel level, as the French state grains board lowered France's 2007-08 soft Wheat production to 32.5 million metric tons, down 1.5 million tons from the previous estimate. Also supportive to Wheat prices was Egypt's purchase of 415,000 tons of U.S. soft red Wheat and 25,000 tons of Russian Wheat. This came shortly after Egypt bought 115,000 tons of Russian Wheat. World Wheat ending stocks look to be extremely tight, with USDA estimates calling for world Wheat carryout of only 114.7 million metric tons – the lowest total since 1981. Traders look for U.S. Wheat exports to continue strong despite sharply higher prices, as poor world production this year looks to leave the U.S. as one of the few outlets for exportable Wheat. The next resistance point for December Wheat is seen at $7.20, with support found at yesterday’s lows of $6.79 ¼. December Wheat closed at $7.11, up 20 ½ cents.

Crude Oil futures rallied this afternoon to close above the 50-day moving average, as the National Hurricane Center upgraded tropical depression four to Tropical Storm Dean. Currently located approximately 1490 miles east of the Lesser Antilles, Dean is forecast to become a Hurricane later this week. Though its path is still undetermined, traders are starting to cover short positions should the storm look to threaten the energy producing regions of the U.S. Gulf Coast. Position squaring was also seen as traders gear up for tomorrow’s weekly EIA energy stocks report. Analysts are looking for a 2 million barrel decline in Crude stocks last week, as refinery utilization is expected to have increased by 0.5%. Resistance for September Crude is seen at $73.20, with support found at Friday’s lows of $70.10. September Crude Oil closed at $72.38, up $0.76

What do Cotton, Gold, Crude Oil, Corn, and Cocoa all have in common? Well, in early trade this morning, these five, along with nearly every other U.S. traded commodity future, are trading lower, as fears of an economic slowdown have traders liquidating commodity futures across the board as they attempt to increase liquidity. This morning’s action in the commodity markets is a good lesson for traders on how interrelated the global markets really are, where the fundamentals that may be affecting Cocoa or Wheat can take a backseat to overriding concerns about liquidity and the forced liquidation of positions by speculators in normally uncorrelated markets to cover losses elsewhere. With many major European Stock markets down over 2% so far today and S&P futures trading at lows last seen in March, it will be interesting to see how commodities react once the day session begins. Should the stock indexes make a recovery, will commodities follow? Stay tuned……

Looking at the daily chart for December Gold, we notice that even a market once thought of as a vehicle for “safe haven” buying cannot stage a rally. Prices are lower in early trade, hovering just above recent lows at $668.80, with a stronger U.S. Dollar against the Euro not helping the cause of Gold bulls. Prices have now fallen below the 50-day moving average, which may trigger fresh selling by momentum traders. The $668.80 level will be widely watched, and a close below this level could signal a test of the $650.00 before major support is seen. Resistance is found at the 20-day moving average of $681.80. In the early going, December Gold is trading at $672.00, down $7.70.

It was hard to find much green on the commodity quote boards today as liquidation selling pummeled nearly every commodity sector. Some of the highlights (or lowlights): December Cotton closed down the 300-point limit, September Lumber was down 9.50, November Soybeans were down 40 cents, December Gold was down $21.40, October Live Cattle was down 2.07, September Crude Oil dropped $2.33, and the list went on an on. The continuing shakeout from the credit crisis has spurred a flight to liquidity, with traders and investors looking to seek refuge in short-term government debt. Fundamentals were largely ignored in many markets, as forced liquidation of positions took center stage with margin calls looming. However, as of 2:46 PM Chicago time, the S&P 500 futures have staged a bit of a rally, and if they can finish unchanged or higher, we may see a different outcome in the commodity markets tomorrow.

Soybean futures were hit hardest in the grain complex sell-off this afternoon, with the most-active November contract falling the 50-cent limit at one point in the session to its lowest levels since mid-May. The entire commodity complex had been under pressure today due to the continued rush for liquidity in the wake of recent financial turmoil. Also weighing on the Soybean products was the improved chances for rainfall in the Midwest, including previously parched sections of the region. U.S. weekly Soybean exports came in at 313,300 metric tons for the week ending August 9th, with 236,000 mt for the 2006-07 marketing year. Soy products were not immune from the sell-off, as December Bean Oil posted triple-digit losses on the back of sharply lower Crude and Malaysian Palm Oil futures, and December Soy Meal broke through near-term resistance at the 20- and 100-day moving averages. The next support point for November Soybeans is seen at the psychologically important $8.00 level, with resistance found at the 100-day moving average of $8.34. November Soybeans closed at $8.14 ½, down 40 cents.

Soybeans: Soybean futures rallied in overnight trading, as traders reacted to the USDA crop progress report showing 54% of the U.S. Soybean crop was rated good to excellent, down 2% from last week. In addition, drought conditions in China’s main Soybean growing region may lower output this year and cause a rise in Chinese Soybean buying later this year. At the end of the overnight session, November Soybeans were trading at $8.33, up 5 ¾ cents.

Wheat: Chicago Wheat futures continued to climb in early trade, as U.S. exports soared despite relatively high prices. The USDA reported 45.7 million bushels were inspected for the week ending August 16th, nearly three times the amount at this time last year. At the end of the overnight session, December Wheat was trading at $696 ½, up 5 ½ cents.

Two-year Note futures: Traders are starting to believe that the Federal Reserve will lower interest rates at their next meeting on September 18th, which is sending a bid through the short end of the yield curve—the most affected by a Fed Funds rate cut. This has sparked a climb in September Two-year Note futures in early trade, leaving them hovering just below contract highs of 103-112 set on Thursday of last week. In early trade, September Two-year Notes were trading at 103-082, up 0-040.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Tuesday, August 21, 2007

(All times in U.S. Central Time)

U.S.
None

Soybean futures were not spared the recent “flight to liquidity” that triggered a large speculative liquidation in the commodity markets. November Soybeans were down the 50-cent limit last Thursday, but have rallied back modestly since then, rising 33 ½ cents from those lows to the end of the overnight session this morning. Some of the rally has been tied to weather concerns – in the northern Midwest, too much rain, raises the prospect of disease in the Soybean crop there, and in the South, too little rain and too much heat may adversely affect yields. On Monday, The USDA reported that 54% of the U.S Soybean crop was rated good-to-excellent, down 2% from last week and 4% from a year ago. With Soybean acres down this year due to increased Corn plantings, any “disappointment” in yields from current USDA estimates could send U.S. carryout totals to multi-decade lows!

Looking at the daily chart for November Soybeans, we notice prices moving above the 100-day moving average for the second consecutive day this morning. Yesterday’s attempt to close above this key moving average failed, so traders will be carefully watching today’s day session to see if bulls can once again regain the upper hand. Momentum has moved back into neutral territory with a 14-day RSI reading of 43.65. The next major resistance point is seen at the 20-day moving average near $8.52, with strong support at last Thursday’s lows of $8.04 ½. At the end of the overnight session, November Soybeans were trading at $8.38, up 7 cents.

Mike Zarembski, Senior Commodity Analyst

Chicago Wheat futures soared to new all-time highs for a non-deliverable period, as strong export prospects are keeping sellers at bay. Some initial support came from Europe, where LIFFE London Wheat made new all-time highs this morning, as continued wet weather in the U.K. has delayed the harvest with nearly 50% of the Wheat crop still in the ground. Speculative buyers were active, with commodity funds re-establishing long Wheat positions after last week’s commodity-wide sell-off due to liquidity concerns. Buy stops were also seen triggered above the previous contract high of $7.19 in the December Contract. The all-time high for Wheat futures was $7.50, but that took place in the last minutes before expiration of the March 1996 contract. $7.50 is seen as the next resistance level for December Wheat, with support now found at the recent highs of $7.19. December Wheat closed at $7.31 ¾, up 27 ¾ cents.

Gasoline futures were the lone bright spot for energy bulls this afternoon, as prices eked out modest gains on a higher-than-expected drawdown in Gasoline stocks last week. In the weekly energy stocks report, the Energy Information Administration reported that U.S. Gasoline stocks fell by 5.7 million barrels last week. This was well below pre-report estimates of a 600,000 barrel draw. However, a higher-than-expected build of both Crude Oil and Distillates – plus a shifting of concern about the level of Gasoline stocks to Heating Oil inventories as the peak driving season comes to a close – kept the Gasoline rally in check. 1.8000 is seen as the next support point for October RBOB, with resistance found at 1.8550. October RBOB Gasoline closed at 1.8234, up 0.0057.

Japanese Yen/currencies: It appears that an appetite for risk among traders and investors has returned in the currencies. September Japanese Yen futures are sharply lower this morning, as traders start to sell Yen and buy higher-yielding currencies such as the Australian and New Zealand Dollars, once again initiating the so-called “carry trade.” The resumption of this popular trade appears to be bolstered by stabilization in world equity markets, as well as assurances from central banks around the globe that they will step in to supply liquidity as necessary to the short-term credit markets. In the early going, September Japanese Yen is trading at 0.8591, down 0.0131, September Australian Dollar is trading at 0.8192, up 0.0134, and the September New Zealand Dollar is trading at 0.7154, up 0.158.

Chicago Wheat: Soft Red Winter Wheat futures continued their surge to near all-time high prices overnight, as several more nations are seeking Wheat purchases amid continuing tight world supplies. Taiwan, Japan and India are either looking to purchase or have already announced purchases of Wheat this morning. India is the second largest Wheat consumer behind China, and additional purchases from this region are strongly supportive to Wheat prices. In addition, there are concerns that Australia, the world’s third largest Wheat exporter, may experience warmer than normal temperatures this spring according to some forecasters, which has the potential to hurt crop yields. At the end of the overnight session, December Wheat was trading at $7.43, up 11 ¼ cents.

Sugar: October Sugar surged to near 2-week highs this morning, as Russia proposes to raise its raw Sugar duty from $140 per ton to $220 per ton. This news is expected to increase short-term demand as buyers obtain supplies ahead of the scheduled December increase. In early trade, October Sugar stands at 9.69, up 0.19.

Mike Zarembski, Senior Commodity Analyst

Chicago Wheat futures hit an all-time high this morning at $7.54 a bushel in the December 2007 contract, as strong exports and extremely tight world ending stocks have buyers scrambling to obtain supplies. Statistics Canada lowered that country’s Wheat production estimate to 20.322 million tons, well below the average pre-report estimates. Wheat futures in London and Paris also made new all-time highs today to add to the buying pressure, before profit-taking selling emerged once new highs were made. Prices fell sharply inter-day before a late short-covering buying surge near the close kept Wheat prices in the green at the close. Resistance for December Wheat is now seen at the new highs of $7.54, with support found at $7.15. December Wheat closed at $7.39, up 7 ¼ cents.

It was turnaround Thursday in the Cocoa ring today, as short covering buying propelled prices sharply higher after 6 ½-month lows were made on Wednesday. The only real fundamental news out this morning was the current arrival totals out of the Ivory Coast – the world’s leading Cocoa producer. Current arrivals totaled 1,186,000 metric tons, down nearly 10% from last year’s levels. However, traders report today’s rally was mostly technical in nature, with buy-stops being triggered above the recent highs of $1780 in the December Contract. $1815 is seen as the next resistant point for December Cocoa, with support found at Thursday’s lows of $1750. December Cocoa closed at $1792, up $38.

Mike Zarembski, Senior Commodity Analyst

Natural Gas: Lead month Natural Gas futures continue to plunge to lows not seen since September of 2006, as continued moderate temperatures in the major U.S. Gas consuming regions and near record high Gas storage levels are keeping bears firmly in control. In addition, the Atlantic hurricane season has been mild, with no major threats to the U.S. Gulf Coast. Current Gas in storage stands at 2.926 trillion cubic feet (tcf), or nearly 13% above the 5-year average. In early trade, October Natural Gas is trading at $5.441, down $0.298.

Lean Hogs: After slumping for most of August, Lean Hog futures surged on Friday in the wake of a 60-million-pound pork deal made with a Chinese trading company. This sparked a round of short covering buying, with the most-active October contract trading close to the 300-point limit at one point in the session. China, the world’s largest consumer of Pork, was rumored to be looking to purchase U.S. pork due to disease issues in the country that have forced a reduction in the country’s Hog herd. October Lean Hog futures closed on Friday at 70.65, up 2.17.

Corn: December Corn futures fell sharply in overnight trading, as industry group Professional Farmers of America estimated the U.S. Corn crop at 13.109 billion bushels, up from the 13.054 billion USDA estimate in the August Crop report. In addition, forecasts calling for drier condition in the Midwest may allow some areas to start the Corn harvest earlier than expected. At the end of the overnight session, December Corn was trading at $3.50 ¾, down 8 cents.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Monday, August 27, 2007

(All times in U.S. Central Time)

U.S.
9:00 AM: Existing Home Sales for July (Consensus 5.70M)

Copper: Lead month September Copper fell sharply in early trade, as exchange warehouse stocks increased sharply this morning. The London Metal Exchange (LME) announced that Copper stocks increased by 10,075 metric tons to stand at 135,625 mt. In addition, a large increase of Nickel stocks on the LME was also weighing on the base metals complex. In early trade, September Copper was trading at 327.30, down 7.65.

Wheat: Chicago December Wheat fell just short of a new record high in overnight trade, as traders look for a continuation of the strong demand for U.S. Wheat while the weather plays havoc with growing conditions worldwide. Major Wheat exporters such as Canada, Ukraine, France and Australia have had production problems thanks to unpredictable weather this year. This morning, Egypt is looking to buy 60,000 mt of Wheat and Bangladesh plans to import 50,000 mt. At the end of overnight trade, December Wheat was at 748 ¾, up 10 ¾ cents.

Stock Index futures: Weakness in several European and Asian markets this morning is spilling over into U.S. trading, with e-mini S&P 500 futures trading in the red. This morning’s report on consumer confidence for August is expected to show a decline from the 112.6 reading in July. The Conference Board will release the figures at 9:00 AM Chicago time. In early trade, September e-mini S&P 500 futures are trading at 1463.00, down 6.75.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Tuesday, August 28, 2007

(All times in U.S. Central Time)

U.S.
9:00 AM: Consumer Confidence for August (Consensus 104.5)
1:00 PM: FOMC minutes from August 7th meeting

Energy Futures: Overnight buying has sent energy futures prices to the upside this morning, as traders prepare for the weekly release of the EIA energy stocks report. Gasoline will be in the spotlight, with traders looking for a decline of 1.8 to 2 million barrels last week. Crude inventories are also expected to show a decline, with estimates ranging from a decline of 600,000 to 1 million barrels. Distillate stocks – which include Heating Oil – are expected to show a 600,000-barrel rise. In early trade, October Crude Oil is trading at $71.99, up $0.26, October RBOB Gasoline is trading at $1.9305, up $0.0151, and October Heating Oil is trading at $2.0230, up $0.0072.

Soybeans: New crop November Soybeans traded lower in the overnight session, as traders expect the USDA will raise its estimate for the U.S. crop in the September 12th production report. Last week, Professional Farmers of America estimated the U.S. Soybean crop at 2.658 billion bushels versus the August USDA estimate of 2.625 billion bushels. Soybean crop conditions improved last week, with 55% of the crop now rated good-to-excellent, up 1% from last week. At the end of overnight trading, November Soybeans stood at $8.68, down 4 ¼ cents.

Japanese Yen: September Yen futures are trading lower for the first time this week, as traders have lowered expectations that the Bank of Japan will raise short-term rates by 0.5% anytime soon. In addition, higher U.S. Stock Index futures this morning have some traders re-establishing the so called “carry trade” using the Yen as the short side of the trade especially against the Australian and New Zealand Dollars. In early trade, September Japanese Yen futures are trading at 0.8721, down 0.0032.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Wednesday, August 29, 2007

(All times in U.S. Central Time)

U.S.
9:30 AM: Weekly EIA Energy Stocks Report

It appears that U.S. Corn producers did their job to help supply the insatiable appetite for the crop this year thanks in large part to rising demand for Corn-based Ethanol and livestock feed. The USDA’s August crop production report estimated the U.S. Corn crop at a whopping 13.054 billion bushels, but many observers believe the crop will be even larger. Professional Farmers of America came out with its own Corn crop estimate last week, estimating the U.S. crop at 13.109 billion bushels, or 0.4% above the USDA estimate. Early harvest reports from the southern Corn Belt showed better-than-expected yields, which also support higher crop estimates. 59% of the U.S. Corn crop was rated good-to-excellent last week, up 1% from the week before and 2% above conditions last year at this time. This news has kept Corn prices in check, with current prices nearly 90 cents below the mid-June contract highs of $4.35. Not all the news is bearish, however, as analysts expect Corn production from the northeast growing region of China to decline by about 6 million tons this year as drought conditions pare yields. Analysts look for China’s total Corn production to decline by between 1 and 2% this year. Traders should expect choppy trade in Corn futures until the next USDA crop production report on September 12th.

Looking at the daily chart for December Corn, we notice prices hovering below the major moving averages. Momentum as measured by the 14-day RSI has turned lower with a reading of 40.11. Last week’s high of $3.70 may have confirmed a double top formation, along with the July 13th highs of $3.71. This area will be formidable resistance for the December contract, and a test of support in the $3.24 to $3.26 area is not out of the question. At the end of the overnight session, December Corn was trading at $3.44 ¼, down ½ cent.

Mike Zarembski, Senior Commodity Analyst

Wheat: Chicago Wheat futures traders have had an exciting morning so far, with a surge in the last 90 minutes of the overnight session sending prices for the December contract to an new all-time high of $783 ½. Though no specific news seems to be responsible for the move, traders remain nervous over world Wheat ending stocks, with the Australian Wheat crop now forecasted to be in the 20 to 22 million metric tone range. However, rainfall has been light again this season, and many traders fear that this estimate may be overly optimistic once the harvest begins. Iraq has issued a tender to buy 50,000 of Hard Wheat this morning. At the end of the overnight session, December Wheat was trading at $7.81 ½, up 23 cents.

Stock Index Futures: The roller coaster ride for index traders continued this morning, as September e-mini S&P 500 futures gave back a portion of yesterday’s 27.25 point gain ahead of this morning’s release of the next preliminary estimate of 2nd quarter U.S. GDP. Expectations are for an increase to 4.1% versus the previous estimate of 3.4% growth rate, due mostly to a narrower-than-expected trade gap in June. In early trade, September e-mini S&P 500 futures were trading at 1457.75, down 7.75.

Dollar Index: September Dollar index futures were strong in early morning trade, as the seven major CME currency futures were all trading in the red after the Bank of England announced that it loaned 1.6 billion pounds at the penalty rate of 6.75 %. This news continued to stoke fears that the recent credit crunch is far from resolved, sending currency traders to safe haven buying of the U.S. Dollar. In early trade, September Dollar Index futures were trading at 80.96, up 0.32.

Mike Zarembski, Senior Commodity Analyst

Wheat futures continued their torrid climb today, posting a new all-time high price of $7.88 ½ per bushel for the December contract as continued strong exports and concerns about Wheat production from Australia and Argentina have underpinned this historic bull market. This morning, the USDA reported U.S. Wheat export sales totaled 1.23 million metric tons for the week ending August 23rd, well above the high end of pre-report estimates. U.S. Wheat sales have soared the past few months despite prices that are nearly double that of last year. It appears that world Wheat ending stocks will be near 26-year lows, with the latest USDA estimate coming in at 114.8 million tons for the 2007-08 marketing year. This has forced Wheat buyers to obtain supplies from the few countries that currently have Wheat available for sale – including the U.S. – and is the key reason U.S. exports are up sharply despite high prices. The once unfathomable $8.00 level is now seen as the next resistance point for December Wheat, with support found near the $7.24 area. December Wheat closed at $7.84 ½, up 26 cents.

After falling to near 3-month lows yesterday, Cotton futures rebounded sharply this afternoon on the strength of solid export sales and short covering buying. The USDA announced this morning that U.S. cotton sales for the week ending August 23rd totaled 476,300 running bales for the 2007-08 marketing year. This was well above pre-report estimates, and sharply above the previous week’s totals of 400,500 bales. During yesterday’s sell-off, commercial buying emerged, allowing prices to close well above the day’s lows. Speculative short covering buying was seen above yesterday’s highs of 5810. A double-bottom formation appears on the daily chart for December Cotton in the 5560 to 5565 area, and should act as strong support. Minor resistance is seen at the recent highs of 5938, with major resistance found at the 20-day moving average of 5995. December Cotton closed at 5907, up 165.

Mike Zarembski, Senior Commodity Analyst

Stock Index Futures: Sharp gains are seen in U.S. Stock Index futures market this morning, as President George Bush will announce a plan to help subprime mortgage holders. It is believed the President will allow the Federal Housing Administration to guarantee loans for borrowers who are delinquent, which should help to avoid foreclosure and even allow refinancing of the loans at more favorable terms. Index traders are reacting positively to the news, as it should help ease the recent credit crunch brought on by the subprime loan situation. In early trade, September e-mini S&P 500 futures were trading at 1477.75, up 16.25.

Treasury futures: President Bush’s plan to help subprime mortgage holders is doing no favors for Treasury bulls, as traders start to price in a reduced chance of multiple Federal Reserve interest rate cuts. The short end of the yield curve has been particularly hard hit this morning, with December 2-year Note futures trading lower by 0-0850, at 102-3150.

Wheat: The historic $8 per bushel level didn’t put up much of a fight in overnight trade, as Chicago Wheat prices stormed to another new all-time high price of $8.07 ¾ for the December contract. With below-average production from most of the world’s leading Wheat exporters, world Wheat ending stocks are expected to be at 26-year lows for the 2007-08 marketing year. Now traders are starting to fear that dry conditions in Australia and Argentina – both among the Southern Hemisphere’s leading Wheat producers – will cut yields there as well. India’s State Trading Corporation is tendering for a large amount of Wheat, with some analysts believing India may be in the market for as much as 700,000 tons. Paris million Wheat futures also made new-all time highs this morning, rising by 7% to 272 Euro per ton. At the end of the overnight session, December Chicago Wheat was trading at $8.05 ¼, up 20 ¾ cents.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Friday, August 31, 2007

(All times in U.S. Central Time)

U.S.
7:30 AM: Personal Income for July (Consensus 0.3%)
7:30 AM: Personal Spending for July (Consensus 0.3%)
7:30 AM: Core PCE Inflation for July (Consensus 0.2%)
8:45 AM: Chicago PMI for August (Consensus 53.0)
9:00 AM: Factory Orders for July (Consensus 3.0%)
9:00 AM: University of Michigan Consumer Sentiment for August (Consensus 83.0)

Earlier in 2007, traders were focused on the U.S. Corn crop, as soaring demand for Ethanol and strong usage for animal feed had the markets wondering how high Corn prices would have to go to curb demand. In retrospect, traders should have been asking the same question about Wheat, as Chicago Wheat futures have soared to new all-time highs this morning, with tight world stocks and strong U.S. exports combining to keep prices climbing. Yesterday, the USDA reported that U.S. Wheat export sales totaled a strong 1.23 million metric tons, despite prices that are well above year-ago levels. India is still aggressively looking to buy Wheat, receiving offers of 530,000 metric tons in its latest tender and looking perhaps to buy up to 700,000 mt if terms are favorable. The U.S. remains one of the few – if not only – Wheat exporters that can still supply large quantities of the crop, as poor weather conditions have wreaked havoc on nearly every major Wheat-exporting country this season. Wheat buyers are counting on improved crops from major Southern Hemisphere growers such as Australia and Argentina to help bring additional supplies onto the market, but so far dry weather condition are making it difficult for these countries to provide bumper crops and help curtail skyrocketing world Wheat prices.

Looking at the daily chart for December Wheat, we notice prices accelerating to the upside as commodity funds scramble to buy and those unfortunate to be short rush to cover their positions in the wake of new all-time highs. Needless to say, prices are well above the major moving averages, and the 14-day RSI is in vastly overbought territory with a current reading of 89.92. It is difficult to project support and resistance levels in this uncharted territory. Traders should be prepared for heightened volatility, and limit moves may become more common until traders can get a better handle on how strong demand for Wheat really is. At the close of the overnight session, December Chicago Wheat was trading at $8.05 ¼, up 20 ¾ cents.

Mike Zarembski, Senior Commodity Analyst

Crude Oil: Oil futures are currently trading lower in post-holiday trade, as bulls take profits with Hurricane Felix figuring now to bypass Mexico’s Oil rigs in the Gulf of Mexico. The category 4 storm is now on track to reach Nicaragua and Honduras later today. October Crude Oil is currently trading at $74.11, down $0.12.

Wheat: Chicago Wheat futures for December were up the 30-cent limit at the end of the overnight session, as India purchased 795,000 tons of Wheat yesterday – well above the 530,000 tons offered in last weeks tender. The increased purchase comes despite all-time highs in world Wheat prices. Australia, the world’s third leading Wheat exporter, is now expected to produce less than 19 million metric tons of Wheat this season, down from the June estimate of 22.5 million tons. At the end of the overnight session, December Wheat was trading at $8.05 ½, up 30 cents.

Coffee: New York Arabica Coffee futures are trading higher in electronic trade this morning, following higher prices in the London Robusta trade as traders fear Hurricane Felix will damage the Coffee crops in Honduras. This comes at a time when Coffee supplies are tight, with the International Coffee Organization looking for an 8-million bag deficit next season. In early trade, December Coffee was trading at 117.20, up 1.35.

Mike Zarembski, Senior Commodity Analyst

Every day seems to bring new bullish fundamentals for the Wheat futures market, setting the stage for the current explosive run to all-time record high prices. Australian Wheat production may fall as low as 16 million metric tons this year – nearly 30% below the most recent government forecast – as hot, dry weather has damaged the crop on the western portion of the continent. Nearly every major Wheat exporter has experienced some problem this year, keeping supplies tight. India purchased 795,000 metric tons of Wheat this past weekend, with the majority coming from Russia. Despite record high prices, there are reports that India is still in the market for even more Wheat to ensure adequate domestic supplies. Egypt is reported this morning to have tendered to buy Wheat as well. Wheat futures markets around the world are trading at record or near-record highs again, with Liffe’s November Paris milling Wheat futures up 5.3% today, trading at a new all-time high of 300 Euro per ton. Liffe’s November London feed Wheat futures also hit a record high of 197.50 Pounds per ton in early trade. In South Africa, December Wheat futures traded a record 2,999 Rand per ton on the South African Futures Exchange. In the U.S., the most-active December Chicago Wheat futures were trading up the 30-cent limit at the end of the overnight session, and the spot month September contract posted a new all-time high of $8.37 per bushel today. Now that Wheat prices have gone parabolic, there is no telling how high prices have to go to start to ration demand. Wheat, unlike other commodities, is a necessity with few good substitutes available, which is why we’re seeing Wheat exports holding strong despite the high prices. Traders must expect extreme volatility in the Wheat futures market, with limit moves becoming more common on both the upside and downside in the near-term.

Looking at the daily chart for December Wheat, we notice prices moving near-vertically as few sellers are willing to stand in front of a charging bull. No surprise that the 14-day RSI has reached vastly overbought levels with a reading of 88.25. With the market trading in a near-panic mode, any support and resistance points would be nearly worthless as prices can and will move quickly through these points. Though fundamentals figure to remain bullish, that does not mean a sharp price correction cannot take place – a decline of $1 or more may occur quickly and slippage on protective sell-stops may be severe! At the end of the overnight session, December Chicago Wheat was trading at $8.35 ½, up 30 cents.

Mike Zarembski, Senior Commodity Analyst

Energy Futures: Lead month October Crude Oil rose past the $76 level in early morning trade, as traders fear recent refinery outages may have crimped fuel supplies. Refinery utilization last week is expected to have fallen below the previous week’s 90.3% capacity rate, which would not bode well for increased supplies of Gasoline. Traders are gearing up for this morning’s weekly EIA energy stocks report, one day later than usual due to the Labor Day holiday. According to a Bloomberg survey, Crude Oil stocks may have fallen by 2.2 million barrels last week. Gasoline stocks were estimated to show a 1.3 million barrel decline. Next week’s OPEC meeting in Vienna is not expected to produce any policy changes in current output, as several Oil ministers have recently announced that the supply of Oil is adequate to meet current demand. In early trade, October Crude Oil is trading at $76.12, up $0.39, and October RBOB Gasoline is trading at $2.0070, up $0.0105.

Wheat: Profit-taking selling came into the Wheat market overnight, as prices eased off record highs made yesterday. However, Wheat tenders continue, with Japan purchasing 175,000 metric tons of milling Wheat from the U.S., Australia, and Canada this morning.
Australia continues to suffer from poor weather conditions, with South Australia state – the third largest producer for the country – now expected to produce nearly 25% less Wheat than previously expected. At the end of the overnight session, December Chicago Wheat was trading at $8.20 ¼, down 15 ¼ cents.

British Pound: September British Pound futures were trading slightly lower in early trade, after the Bank of England kept interest rates steady at 5.75%. This pause comes after 5 straight rate increases this year, and until recently many economists were looking for another increase to 6% by the start of the fourth quarter to help keep inflation in check. In early trade, September British Pound futures were trading at 2.0182, down 0.0021.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Thursday, September 6, 2007
(All times in U.S. Central Time)

U.S.

7:30 AM: Initial claims wk-9/1 (Consensus 330,000)
7:30 AM: 2nd qtr Productivity revised (Consensus 2.4%)
9:00 AM: ISM Services for August (Consensus 54.5)
9:30 AM: EIA Energy Inventories

Gold: December Gold futures started the week on an up note, rising for the fifth time in the last six sessions as continued volatility in world equity markets has traders looking for a “safe haven” investment. In addition, the most recent Commitment of Traders report shows large non-commercial traders increasing their net-long position by over 25,000 contracts for the week ending September 7th. In early trade, December Gold is trading at $713.80, up $4.10.

Treasury futures: Despite the recent sharp rally in the U.S. Treasury complex, foreign owners of U.S. debt are not terribly happy, as the declining U.S. Dollar is cutting into profits or even causing losses for these investors. It appears that key Asian buyers have been net-sellers of U.S. Treasuries recently as they seek out better returns and increased diversification from Dollar-based assets. In early trade, December Ten-year Note futures are trading at 110-15, down 0-025.

Wheat: Chicago Wheat futures added to gains made on Friday, surging to a new contract high of $8.72 per bushel overnight, as Australia’s Wheat crop received only scattered rainfall over the weekend, which was insufficient to help the stressed crop. In addition, Western Australia’s state Department of Agriculture cut the region’s Wheat production to 5.1 million tons – down from 5.6 million tons – due to drought conditions. At the close of the overnight session, December Wheat was trading $8.65, up 21 ½ cents.

Mike Zarembski, Senior Commodity Analyst

Gold futures continue their torrid pace upward, with the December contract hitting highs not seen since May of 2006 as a weaker U.S. Dollar and commodity fund buying continue to underpin the market. Fresh momentum buying came in and buy stops were triggered once the recent highs at $718.00 were taken out in the December contract. The sharp rally coincided with a speech by Fed Chairman Ben Bernanke, but the timing may have been little more than a coincidence as the Chairman did not discuss his views on interest rates or his outlook for the U.S. economy. Reports that some Gold producers were beginning to lift established hedges was also deemed supportive to the market. $725.00 is now seen as the next resistance point for December Gold, with major support found at $700.00. December Gold closed at $721.10, up $8.90.

Corn futures continued their recent consolidation, as traders squared up positions ahead of tomorrow’s USDA‘s crop production and supply/demand reports. Current estimates are for the U.S. Corn crop to have increased, with average estimates from a Dow Jones Newswire survey calling for a 13.128 billion bushel Corn crop versus 13.054 billion in the August report. The increased production is expected to come from higher average yield estimates. Corn demand is expected to remain strong, with analysts looking for a modest decline in 2007-08 carryout totals from the 1.137 billion bushel estimate by the USDA last month. Technical traders will note a possible symmetrical triangle pattern forming on the daily chart for December Corn. This consolidation pattern consists of lower highs and higher lows for the past month, and will need to see a breakout of either the upper or lower trendline on above-average volume to provide a clue to the next direction for Corn prices. Current support is seen at $3.36 ¾, with resistance at $3.52 ½. December Corn closed at $3.40 ¾, down 5 ¼ cents.

Mike Zarembski, Senior Commodity Analyst

The following is a summary of pre-report estimates for this morning’s USDA Crop Production and Supply/Demand reports:

Soybeans: Average estimates for 2007 Soybean production are for a crop of 2.650 billion bushels versus the August USDA estimate of 2.625 billion bushels. Ending stocks for the 2007-08 season are estimated at 217 million bushels.

Corn: Corn production is expected to have increased from the August USDA estimate, with analysts looking for a crop near 13.13 billion bushels versus 13.054 in the August estimate. Average Corn yields are expected to have increased to 153.7 bushels per acre versus 152.8 bushels in August.

Wheat: 2007-08 U.S. Wheat carryout totals are expected to decrease once again, with average estimates coming in at 376 million bushels versus 404 million bushels in the August report.

Cotton: U.S. Cotton production is expected to show a moderate increase from the August USDA estimates, with analysts expecting a crop of 17.41 million 480-pound bales versus the August estimate of 17.35 million bales. This increase is expected to raise the U.S. carryout figures to 5.93 million bales, up 0.13 million bales from August.

Mike Zarembski, Senior Commodity Analyst

The records keep on coming for Wheat futures, with the December 2007 Chicago Wheat futures contract surpassing the $9 per bushel level for the first time in history. Panic buying took hold at the end yesterday’s day session as traders were fearful of being caught short ahead of the USDA supply/demand report due out today at 7:30 AM Chicago time. Analysts expect the USDA to cut its U.S. Wheat carryout estimates, as strong U.S. exports and unfavorable growing conditions in nearly all of the major Wheat-exporting countries are expected to keep next season’s stock extremely tight. The average estimate for 2007-08 Wheat ending stocks is 376 million bushels according to a Dow Jones Newswire survey, down from the 404 million bushels the USDA estimated in its August report. Canadian Wheat stock estimates were lowered, as Statistics Canada estimated Canadian Wheat stocks at 6.828 million metric tons as of July 31st – well below pre-report estimates of 7 to 8 million metric tons. Traders also feel that the USDA will lower its production forecasts for Australia, Argentina and the EU as well. With record high prices, one might assume that Wheat-importing nations would hold back on their buying in hopes of lower prices, but that hasn’t been the case recently. Japan is said to have tendered for 155,000 metric tons and Egypt is back in the market for another 55,000 tons, with some of it expected to be U.S. Hard Red Winter Wheat. Though a correction in prices seems imminent, traders should be aware of the famous market words to live by – “markets can stay irrational longer than I can stay solvent!”

A look at the daily chart for December Wheat inspires one simple reaction – WOW! The 14-day RSI was reading an extremely overbought 89.14. With prices in such uncharted territory, support and resistance points are nearly meaningless. However, this morning’s major USDA report could be the catalyst for a badly needed correction in prices. Even if the report is deemed bullish after the release, extreme volatility should be expected! At the end of the overnight session, December Wheat was trading at $9.06 ¾, up 16 ¼ cents.

Mike Zarembski, Senior Commodity Analyst

The long-awaited September Crop Report was released this morning, with the USDA raising its estimate for the U.S. Corn crop to 13.308 billion bushels versus 13.054 billion bushels in the August report. Average Corn yields were also raised to 155.8 bushels per acre, or 3 bushels per acre higher than the previous estimate. Corn carryout totals for 2007-08 were also raised to 1.675 billion bushels, up sharply from the average estimate of 1.529 billion bushels. However, despite this “bearish” report, Corn futures rallied sharply this afternoon, as a classic “sell the rumor, buy the fact” mentality took hold. Traders noted buy stops being triggered above the $3.50 level in the December contract, with few sellers willing to take the other side until prices moved even higher. Corn was further supported by spillover buying from the Soybean complex, as Beans, Soy Oil and Soy Meal all made contract highs this afternoon. The next major resistance point for December Corn is seen at the August 23rd highs of $3.70, with support found at $3.32 ½.

Crude Oil futures rose to near $80 per barrel as U.S. Crude inventories fell by more than pre-report estimates last week. In its weekly energy stocks report, the EIA reported that Crude Oil stocks fell by 7.1 million barrels last week – more than double the 2.7 million barrel decline expected. This was the ninth time in the last 10 weeks that U.S. Oil inventories had fallen, making traders nervous about tightening supplies. Oil stocks in Cushing, Oklahoma – the delivery point for the NYMEX contract – fell by 500,000 barrels last week. Refinery operating rates dropped to 90.5% versus 92.1% the previous week, which gave a boost to Heating Oil and Gasoline futures. Oil traders have mostly dismissed yesterday’s announcement from OPEC that the cartel will boost production by 500,000 barrels per day starting in November, as the boost is viewed as not nearly enough to tame tightening supplies as demand for Oil continues to grow.

Mike Zarembski, Senior Commodity Analyst

Wheat: Chicago Wheat futures have started to pull back from their all-time highs, with traders beginning to unload long positions in light of the USDA’s better-than-expected forecast for global Wheat production. In yesterday’s crop production report, the USDA lowered world Wheat production to 606.24 million metric tons as of May 31, 2008, down 0.7% from last month’s estimate. However, the USDA only lowered the estimate for Australia’s crop to 21 million tons versus 23 million tons. Many analysts believe that a continued drought in Australia could bring that figure in at as low as 15 million tons. In early trade, December Wheat is trading at $8.55 ¾, down 4 ¾.

Crude Oil: After trading to a record high $80.18 per barrel for a lead month contract yesterday, October Crude Oil is down moderately in early trade as Hurricane Humberto begins to weaken as it moves across Texas today. In addition, an OPEC production increase of 500,000 barrels per day comes just as the International Energy Agency cut its prediction for world Oil demand by 90,000 per day to 85.9 million barrels. In early trade,
October Crude Oil is trading at $79.84, down $0.07.

Natural Gas: After hitting one-month highs in the October contract yesterday, Natural Gas futures are trading lower this morning as traders gear up for this morning’s EIA Gas storage report. Estimates are for an injection of just over 65 billion cubic feet (bcf) last week – well below the 103 bcf injection this time last year. In early trade, October Natural Gas is trading at $6.269, down $0.169.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Thursday, September 13, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Initial Jobless Claims for week ending 9/8 (Consensus 325K)
1:00 PM: Treasury Budget (Consensus -85.0 Billion)

Ten-year Note futures: Barring any surprisingly weak U.S. economic data this morning, December Ten-year Note futures look to be headed for a down week, with flight-to-quality buying of U.S. government debt waning as the short-term credit crunch eases a bit. Traders are expecting today’s report on U.S. retail sales for August to show an increase of 0.5% versus a 0.3% rise in July. Also out this morning is the Reuters/University of Michigan Consumer Confidence Index, which is expected to show a reading of 83.5 for September, up 0.1 from August. In early trade, December Ten-year Notes were trading at 109-310, up 0-100.

Wheat: The long-awaited correction in Chicago Wheat futures has begun, after the “buy the rumor, sell the fact” decline in prices following Wednesday’s USDA crop production and supply/demand reports. Since reaching an all-time high of $9.11 ¼ on Wednesday, December Wheat has fallen as low as $8.28 in early trade this morning. Traders will be eagerly awaiting the September 18th crop estimate by the Australian Bureau of Agricultural and Resource Economics for the official estimate of the Australian Wheat crop. The USDA estimated the Australian crop at 21 million metric tons, down from 23 million metric tons in its August estimate. However, some private forecasters are calling for a crop as low as 12 million metric tons. At the end of the overnight session, December Wheat is trading at $8.36 ¼, down 8 ¾ cents.

Japanese Yen: Yen futures are poised for their first weekly loss in nearly three weeks, as an improvement in world equity markets and a slight easing of the recent credit crisis has traders starting to resume the so-called “carry trades.” The Yen was especially weak versus the New Zealand Dollar, with the high interest rate differential between the two countries making this pair among the most popular with speculators looking for high returns. In early trade, the December Japanese Yen was trading at 0.8810, up 0.0034.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Friday, September 14, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: Retail Sales for August (Consensus 0.5%)
8:15 AM: Industrial Production for August (Consensus 0.3%)
8:15 AM: Capacity Utilization for August (Consensus 82.0%)
9:00 AM: Business Inventories for July (Consensus 0.3%)
9:00 AM: University of Michigan Sentiment Index for September (Consensus 83.5)

Soybeans: Freezing temperatures in parts of the northern Midwest over the weekend have bean traders buzzing, as concerns mount that crop damage may have occurred in parts of Iowa, Minnesota, and Wisconsin. This news helped send November Soybeans to highs not seen in three years, with prices moving closer to the psychologically important $10 per bushel level. At the end of the overnight session, November Soybeans are trading at $9.71 ¼, up 16 ½ cents.

Stock Index futures: U.S. equity index futures have started the week on a down note following losses in Europe, as a major U.K. mortgage lender, Northern Rock Plc, fell to seven-year lows after customers continued to withdraw savings following a bailout by the Bank of England last week. This has sparked fears that the recent credit crunch has not been resolved and may spread throughout the world. In early trade, December S&P 500 futures are trading at 1476.00, down 9.00.

Coffee: Following a move to 9-year highs by the Robusta contract in London, Arabica Coffee futures in New York rose to one-month highs in early trade, as traders fear tight supplies ahead of the harvest in Vietnam – the world’s largest producer of Robusta Coffee – starting in November. High Robusta prices have caused some Coffee roasters to switch to using more Arabica beans in their blends. In early trade, December Coffee is trading at 122.75, up 1.85.

Mike Zarembski, Senior Commodity Analyst

Stock Index futures: Indexes in both Europe and the U.S. are little changed from yesterday’s close, as traders await what might be one of the most widely anticipated FOMC meetings in years. The slump in the U.S. housing market coupled with the recent liquidity crisis looks to have forced the Fed’s hand into lowering the Fed Funds rate by 25 basis points, according to survey of economists by Bloomberg News. However, the statement released after the rate announcement will be closely analyzed by the markets for any signs that further rate cuts are down the line, or if the Fed hopes to jawbone the market into believing it is ready to tackle further weakness in the economy if necessary without losing its grip on controlling inflation. In early trade, the December e-mini S&P 500 futures are trading at 1478.75, up 1.75.

Wheat: Chicago Wheat futures continue to rebound from last week’s sharp price correction after hitting all-time highs on Wednesday. The Australian Bureau of Agricultural and Resources Economics lowered its estimate for the country’s Wheat production to 15.5 million metric tons – down sharply from its previous estimate of 22.5 million tons. Australia is the third largest Wheat exporter behind the U.S. and Canada. South Korea bought 47,700 metric tons of U.S. Wheat today, with Taiwan and Japan also expected to tender for U.S. Wheat this week. Both Pakistan and Turkey may each need to import up to 1 million metric tons of Wheat this season to help replenish stockpiles. At the end of the overnight session, December Wheat is trading at $8.87, up 12 cents.

Crude Oil: Lead month October Crude Oil rose above $81 per barrel in overnight trade, as traders anticipate another drawdown in U.S. Crude inventories last week with rising demand continuing to overwhelm supplies. In tomorrow’s EIA energy stocks report, traders are anticipating another 2 million barrel draw in Oil stocks, which will be the 10th drawdown in 11 weeks should it come to pass. In early trade, October Crude Oil is trading at $80.91, up $0.34.

Mike Zarembski, Senior Commodity Analyst

Economic Data Scheduled for Tuesday, September 18, 2007
(All times in U.S. Central Time)

U.S.
7:30 AM: PPI for August (Consensus -0.3%. Core 0.1%)
8:00 AM: Net Foreign Purchases for July (Prior 120.9 Billion)
1:15 PM: FOMC Policy Statement

Copper futures surged to their highest levels since August 1st as speculators rushed to cover short positions after yesterday’s surprising 50 basis point cut in the Fed Funds rate.
Traders viewed the aggressive move as a sign that the Fed is prepared to intervene, if necessary, to prevent the U.S. economy from falling into a recession, even at the risk of stimulating inflation. Any sign of an improving growth rate for the U.S. economy is a bullish sign for the entire base metals complex, including Copper. The most recent Commitment of Traders report showed non-commercial traders being net short 9,091 Copper contracts as of September 11th, and today’s sharp reaction was fueled by the covering of some of those short positions. Chinese demand continues to be strong, with the International Copper Study Group forecasting a 340,000 ton Copper deficit for the first half of 2007, due mostly to the voracious appetite for base metals in China. The next resistance point for December Copper is seen at 363.10, with support found at the 50-day moving average of $341.10. December Copper closed at 357.55, up 12.75.

Wheat futures closed sharply lower this afternoon, as profit-taking selling and unwinding of Corn/Wheat spreads pressured the market. With little new fundamental news out today, traders began to focus on the demand picture, with the notion that high prices will start to curtail export demand, especially after India announced that its Wheat stocks were adequate at current levels. Today’s sell-off allowed the December contract to briefly trade down the 30-cent limit, as sell stops were seen being triggered below the recent lows of $8.53 ¾. Traders also reported a moderate amount of Corn/Wheat spreading taking place, as large speculative accounts continue to unwind their spreads. $8.28 is seen as the next support point for December Wheat, with resistance found at $8.76. December Wheat closed at $8.45, down 24 cents.

Mike Zarembski, Senior Commodity Analyst

Soybean futures continue to their strong price surge, with deferred months trading above the $10 per bushel level, as concerns about tight inventories and reports that China will lower import duties have traders in a buying mood. The USDA reported U.S. Soybean export sales totaled 513,600 metric tons for the week ending September 13th, in line with expectations. Dry weather conditions in northern Brazil may affect Soybean plantings, with forecasts calling for the dryness to persist possibly through the early parts of October. With the Soybean harvest about to begin in earnest, there is little sign of harvest pressure selling so far, which is surprising given the relatively high price at which November futures are trading. Support is also found from the rise in overall commodity futures prices, especially with a weak U.S. Dollar and inflation concerns in light of the Fed’s shift in focus from fighting inflation to preventing a weakening of the U.S. economy due to the housing slump. $10 is seen as the next resistance point for November Soybeans, with support found at $9.52 ¾. November Soybeans closed at $9.89, up 18 cents.

Cocoa futures soared to 7-week highs this morning, as continued weakness in the U.S. Dollar against the British Pound and fresh technical buying propelled prices higher. Concern about the spread of Black Pod disease in the West African growing regions was fundamentally supportive to the market. In addition, the December March Spread continues to widen with the December contract now trading at a $25 premium to the March contract, which traders are taking as a sign that near-term demand is strong. An overall rally in commodity prices was also a factor in today’s gains. $1982 is seen resistance for December Cocoa, with support found at $1830. December Cocoa closed at $1971, up $71.

Mike Zarembski, Senior Commodity Analyst

(The Mexican Peso Gains Against the U.S. Dollar)
Mexican Peso: December Peso futures are trading near two-month highs in early trade, after Banco de Mexico kept interest rates steady at 7.25% of Friday, but maintained a “restrictive bias” which is leading traders to believe that the Bank will raise rates later this year due to rising inflation concerns. The interest rate differential between Mexico and the U.S. has risen to 2.5%-the highest since April of last year. In early trade December Mexican Peso futures were trading at 90775, up 75.

Crude Oil: Oil futures were moderately lower to start Sunday night trading, as workers returned to Oil facilities in the Gulf of Mexico after tropical storm threats have passed. In addition, a senior Iranian official said that current market fundamentals would not support Oil prices above $80 per barrel, as the current market backwardation will cut demand. In overnight trade, November Crude Oil was trading at $81.34, up $0.28.

Wheat: Chicago Wheat futures start the week where it left off on Friday with a sharp rally, as continued dry weather in Australia has traders looking for a further decline in Wheat production. Wheat futures in Australia hit a record A$492 per metric ton today, as weather forecasts now call for continued dry weather for the next 10 to 14 days. In overnight trade, December Wheat was trading at $8.90, up 16 cents.

Mike Zarembski Senior Commodity Analyst

Economic Data Scheduled for Monday, September 24, 2007
(All times in U.S. Central Time)

U.S.
None

Great Britain
None

Canada
None

European Union
4:00 AM: Industrial New Orders for July (MoM) (Prior 4.4%)

Corn futures have been upstaged this year by the surging Wheat and Soybean markets, even as U.S. producers did their jobs and produced a near-record Corn crop to meet the demands from both the ethanol and livestock industries. However, December Corn hit a three-month high yesterday, as speculative buying – most notably by commodity funds – has helped to break Corn futures out of their bearish posture. There is some talk among traders that Corn acreage will be lower next season as producers look to take advantage of relatively high Wheat and Soybean prices in 2008 and dedicate more acres to those crops. This is beginning to be played out in the December 2008 contract, where prices are well above $4 per bushel as Corn fights to retain acres from competing grains. Near-term, traders should keep an eye on hedge selling on any rallies in December 2007 Corn, as the U.S. harvest continues. The USDA reported that 22% of the U.S. Corn crop was harvested versus only 12% last year, and 80% of the crop was rated as mature, well above the five-year average of 65%. Among the largest Corn-producing states, Illinois reported 46% of its crop harvested versus 13% last year, Iowa had only 7% harvested, and Minnesota only 9%. Though both of these states were still above the five-year averages, the size of this year’s crop is so large that harvest pressure will continue to be a serious factor on Corn prices as they continue to harvest the crop.

Looking at the daily chart for December 2007 Corn futures, we notice yesterday’s rally above $3.80 was met with strong selling pressure which forced Corn prices to end the session on a down note. Some moderate selling continued in the overnight session as well. However, Corn continues to hold above the 100-day moving average, which is a bullish sign for momentum traders. Commodity funds are holding a large net-long position in Corn futures, with the most recent Commitment of Traders report showing these large speculators net-long 164,457 contracts as of 9/18. Small speculators are net-short 114,240 contracts, which may add fuel to the bull run, especially if buy stops are triggered should December Corn trade above resistance at Monday’s highs of $3.80 ½. Support is seen at the 100-day moving average, currently at $3.62 ¼. At the end of the overnight session, December Corn was trading at $3.72, down 1 ½ cents.

Mike Zarembski, Senior Commodity Analyst

Wheat: Chicago Wheat futures prices continue to defy gravity, rising sharply higher in overnight trading after Wednesday’s limit-up move trapped bears trying to pick a top in the market. Continued strong demand and deteriorating crop prospects in Australia are among the key fundamental reasons behind this historic climb. The Australian Bureau of Statistics reported that Wheat stocks in storage owned by the major grain companies fell by 20% in August to stand at 2.8 million metric tons. At the end of the overnight session, December Wheat was trading at $9.35 ¼, up 18 cents.

Soybean Meal: December Soybean Meal futures jumped to contract highs in overnight trading, following the strong performance of Wheat and Soybean futures. Asian buyers are substituting Soybean Meal and Corn for use as animal feed, as high Feed Wheat prices are causing users to seek alternatives. U.S. Soybean Meal exports are expected to total somewhere between 75,000 and 150,000 metric tons last week. At the end of the overnight session, December Soybean Meal was trading at $288.90, up $4.10.

Soybeans: New-crop November Soybeans surged in overnight trade, surpassing the $10 per bushel level as Beans battle it out with Wheat for acreage next season. Brazilian producers are behind in their Soybean plantings so far this season due to dry weather. Traders are looking for strong Soybean export totals this morning, with estimates ranging from between 500,000 to 800,000 metric tons. At the end of the overnight session, November Soybeans are trading at $10.01 ¾, up 11 cents.

Mike Zarembski, Senior Commodity Analyst

Corn futures prices are trying their best to keep pace with the skyrocketing Wheat and Soybean markets as the battle for next season’s acreage begins. The growing demand for ethanol, combined with solid animal feed demand, gave producers ample reason to plant Corn this year. And plant they did! With just under a quarter of the U.S. Corn crop harvested so far this year, reports indicate that Corn yields are coming in above earlier estimates, which may send the actual size of the Corn crop past the most recent USDA estimate of 13.3 billion bushels. If this holds, it would be the largest crop on record. According to the National Agricultural Statistics Service, producers are expected to harvest the most Corn acres since 1933. However, prices continue to rise despite harvest pressure selling, as December Corn moved to 3-month highs this morning. This is a case where Corn is being carried along with Wheat and Soybean prices to prevent the spreads from becoming too far out of line. Demand for Corn will continue to grow, with Asian feed buyers switching to Corn from Feed Wheat for animal feed. This morning’s USDA weekly export sales are expected to come in somewhere between 600,000 and 1.5 million metric tons last week. Traders should keep their eyes on the new-crop 2008 contracts for the grains to see how the battle for acreage is playing out.

Looking at the daily chart for December 2007 Corn, we notice the rally in the overnight session sent Corn prices to highs not seen since the last week of June. Prices have moved well above the major moving averages, and momentum is on the rise. However, the 14-day RSI has moved into overbought territory – though only modestly – with a current reading of 74.75. The next area of resistance is not seen until the $3.90 area, with support found around the recent lows near $3.68. At the end of the overnight session, December Corn closed at $3.81, up 6 cents.

Mike Zarembski, Senior Commodity Analyst

Crude Oil: Traders were “bargain hunting” in the Crude Oil market after an attempt to move front month November Crude below $79 per barrel was met with fresh buying interest. Prices continue to hover just above $80 per barrel in early trade, with traders gearing up for this morning’s release of the weekly EIA energy stocks report. Current estimates are for a moderate decline in Oil inventories, with traders looking for a decline of between 300,000 and 600,000 barrels last week. Refinery utilization is expected to show a moderate increase of 0.4% to stand at 87.3%. The slight rise in utilization is expected to have resulted in an increase in Oil-derived products, with Gasoline inventories expected to have increased by 500,000 barrels and distillates by 700,000 barrels last week. In early trade, November Crude Oil is trading at $80.54, up $0.22.

Wheat: Grain traders were in a selling mood yesterday, sending Wheat futures down the 30-cent limit all the way through the December 2008 contract. In overnight trade, lead month December Wheat continued to tumble, at one point falling by an additional 30 cents before moderate buying emerged to keep prices above $9.00 by the end of the overnight session. Traders pointed to a stronger U.S. Dollar as reason for the sell-off, as well as disappointment over the fact that the U.S. did not receive any business from Egypt’s latest 80,000 metric ton Wheat tender. However, the Australian Wheat crop continues to be decimated, as high winds and a prolonged lack of rainfall are leading some analysts to further lower their estimates for this season’s production. At the end of the overnight session, December Wheat was trading at $9.00, down 22 ½ cents.

Natural Gas: After rallying to near 6-week highs yesterday, November Natural Gas futures are showing moderate weakness this morning, as traders assess the possibility of a tropical storm forming near Key West, Florida, that has the potential to reach the Texas coast by the end of the week. In early trade, November Natural Gas is trading at $7.357, down $0.057.

Mike Zarembski, Senior Commodity Analyst

Wheat futures rebounded this afternoon after weak longs finished exiting the market following yesterday’s limit-down move. Buyers were found after overnight selling pushed the lead month December contract below the $9 per bushel mark. Despite near-record high prices, Wheat buyers continue to lock in supplies, with the USDA announcing sales of 290,000 metric tons of Hard Red Spring and Hard Red Winter Wheat to unknown origins. Traders also expect the USDA to report strong sales in Thursday’s weekly export sales report – current estimates are for U.S. Wheat sales to total between 1.2 and 1.9 million metric tons for the week ending September 27th. The next resistance point for December Wheat is seen at $9.46 ½, with support found at $8.85. December Wheat closed at $9.26, up 3 ½ cents.

Lead month December Copper posted new contract highs this morning, as continued commodity fund buying and labor issues supported prices. Technical traders have renewed optimism now that major resistance at 370.20 has been taken out, negating a potential triple-top formation. Ongoing mine strikes in Mexico and Peru are keeping the supply picture tight. Copper prices were also supported by buying in other base metals – particularly Lead – which reached new all-time highs today. 380.00 is seen as the next resistance point for December Copper, with support found at 361.40. December Copper closed at 376.35, up 5.25.

Mike Zarembski, Senior Commodity Analyst

Reports of higher yields and the potential for slower demand from Ethanol producers have traders looking for a large Corn surplus. Analysts are continuing to raise their estimates of this year’s crop, with private forecasters looking for a total somewhere between 13.3 and 13.5 billion bushels. Weather forecasts are calling for near perfect conditions for harvesting this weekend, which may spur additional hedge selling as producers move Corn to local elevators. U.S. export sales appear solid, with Corn export sales expected to come in between 1 and 1.4 million metric tons last week – the totals will be reported in this morning’s USDA weekly export sales report. Large speculators continue to hold a large net-long position in Corn, with the most recent Commitment of Traders report showing large non-commercial traders net-long 193,687 contracts as of September 25th. If next week’s USDA crop production report holds a bearish surprise for traders, this large long position may be the catalyst for a sharp sell-off should the funds start to liquidate their Corn holdings.

Looking at the daily chart for December Corn, we notice prices below the major moving averages, despite a moderate rally in overnight trading. The 14-day RSI remains weak, with a current reading of 38.35. December Corn is holding just above an area that appears to offer decent support between the $3.30 and $3.40. Should support hold, a test of the 20-day moving average near the $3.60 area is a definite possibility. At the end of the overnight session, December Corn is trading at $3.48 ¾, up 4 ¼ cents.

Mike Zarembski, Senior Commodity Analyst

Copper: After rising 2.4% in London trading last week, Copper futures are giving back those gains in early trade, with traders fearing that Chinese demand will dry up in light of high prices. However, Copper could receive a boost later in the week if a strike by workers at Southern Copper Corp. in Peru continues into its second week. In early trade, December Copper is trading at 361.55, down 10.90.

Wheat: Chicago Wheat futures continue their decline from all-time high prices,