From Daily Futures:
U.S. Economy
The Institute of Supply Management’s index of services increased from 46.4 to 48.4 in August, a little better than expected. The December 2010 eurodollars were down .02 at 98.215 after closing at a new contract high yesterday.The U.S. Labor Department said that jobless claims were down 4,000 last week to 570,000, a little more than expected.
The OECD said today that “recovery from the global recession is likely to arrive earlier than had been expected a few months ago but the pace of activity will remain weak well into next year…” December copper finished up 3.90 cents at $2.8650, encouraged by the good news.
Grains and Cotton
The USDA said that, as of last week, 2008-2009 exports of:
Corn finished the season down 25% from a year ago.
Soybeans finished the season up 11% from a year ago.The USDA said that, as of last week, 2009-2010 exports of:
Wheat remained down 47% from a year ago.
Cotton improved from down 41% to down 38% from a year ago.
Cotton also had 306,000 bales of net sales last week, more than usual.
December cotton was up .33 to 59.24.The USDA said that China bought 110,000 tons of U.S. soybeans for 2009-2010. Also, 174,000 tons of U.S. corn were sold to unknown destinations. December corn slipped 3.5 cents to a new contract low of $3.157. November soybeans fell 9.5 cents to $9.415, the lowest close in five weeks.
Southern Texas is the only place on today’s U.S. Drought Map that is showing areas of extreme to exceptional drought conditions.
Livestock
The USDA said that net sales of beef totaled 8,300 tons last week, down from 9,200 tons the previous week. October cattle ended down .05 at 86.72.The U.S. Meat Export Federation commissioned a survey last month that found that “one in five consumers in the worldÕs largest pork market (China) still believe that eating pork can result in catching the (H1N1) flu virus…” They also said that two-thirds of China’s consumers stopped eating pork earlier this year after news of the H1N1 (swine flu) virus broke. October hogs closed up .95 at 49.77 with talk that pork demand may be picking up.
Lumber
Canada’s Mortgage and Housing Corporation said that they expect housing starts to be up almost 6% in 2010. November lumber was up $4.70 at $183.00.Cocoa
Dow Jones Newswires said that weather conditions in West Africa have been “generally favorable for the cocoa crop…” December cocoa ended down $16 at $2,923.Orange juice
At this point, Tropical Storm Erika looks weak and will not likely be a threat to Florida, but it is worth watching. November orange juice was down 1.75 cents at 92.25, the lowest close in eight weeks.Metals
Investors are turning to the precious metals markets. December gold closed up $19.20 at $997.70, the highest close in six months. December silver shot up 92.5 cents to $16.29, the highest close in over a year.Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 65 billion cubic feet last week to 3.323 trillion cubic feet. Supplies are now up 17% from a year ago. November natural gas fell 20.7 cents to a new contract low of $3.662.Currencies
Eurostat said that retail sales in the EU-27 were up .2% in July, but down .9% from a year ago. Also, the Purchasing Managers’ Index, a measure of economic activity in the Eurozone, increased from 50.0 to 50.4 in August, the first sign of expansion in 15 months. The September euro ended down .0022 at $1.4250 after the European Central Bank kept the interest rate unchanged at 1.0% today.Updated 2009 GDP growth estimates from the OECD show that they expect -2.8% for the U.S., -4.7% for the U.K., -3.9% for the Euro area, -2.5% for Canada, and -5.6% for Japan. The U.K.’s new estimate was the only one that was worse than the previous June estimate.
An index of services in the U.K. increased from 53.2 to 54.1 in August, the highest reading since September of 2007. The September British pound was up .0042 at $1.6320.
An index of services in Australia increased from 44.1 to 48.0 in August, still a sign of contraction.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.