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MARKET WRAP-UP

Cullen Roche -

From Daily Futures:

U.S. Economy
The Institute of Supply Management’s manufacturing index increased from 48.9 to 52.9 in August, stronger than expected and the highest in two years. The December 2010 eurodollars closed up .085 at 98.165 in spite of the good news.

The National Association of Realtor’s index of pending home sales was up 3.2% in July and up 12% from a year ago, better than expected. It was the sixth consecutive month of positive gain and the highest reading in two years. November lumber ended down .80 at $178.80.

Normally, you would expect a higher stock market with today’s good news, but it is actually trading lower, overshadowed by concerns about the banking sector. The September U.S. dollar index jumped up .585 to 78.805.

U.S. vehicle sales for Ford were up 17% in August. At Chrysler, sales were said to be down 15% in August.

The U.S. Census Bureau said that construction spending was at an annual rate of $958 billion, down .2% in July and down 10.5% from a year ago.

Grains and Cotton
The USDA said that Mexico bought 120,000 tons of U.S. corn for 2009-2010. December corn closed down 10.5 cents at $3.192, matching its lowest close.

November soybeans fell 24 cents to $9.555 with favorable weather building expectations for a big harvest this fall. So far, fears of early cold weather are not showing in the forecasts.

December wheat fell 11.5 cents to $4.872, tying its lowest close, after the USDA said late yesterday that 75% of the spring wheat crop was rated good to excellent and 38% of it had been harvested.

December cotton erased yesterday’s gain and closed down 1.39 cents at 58.35.

Livestock
October hogs closed up 1.35 at 49.50, the highest close in three weeks, helped by talk of more interest for pork among packers.

October cattle closed down .57 at 86.10, pressured by today’s weak stock market and ongoing concerns about the demand for beef.

Sugar
October sugar ended down .15 at 24.24, taking a break after closing at its highest level in 28 years yesterday.

Metals
December copper ended down .0080 at $2.8185, helped by today’s stronger-than-expected U.S. manufacturing report, but pressured by today’s lower stock market.

December gold closed up $3.00 at $956.50, in spite of today’s stronger U.S. dollar.

Energies
November crude oil dropped $1.94 to $68.72, the lowest close in four weeks, ahead of tomorrow’s weekly U.S. inventory report.

Mild U.S. temperatures and plentiful supplies pushed November natural gas down 13 cents to a new contract low of $2.868.

Currencies
Eurostat said that the unemployment rate in the EU-27 increased from 8.9% to 9.0% in July, the highest since 2005. Also, the Markit Economics manufacturing index for the Euro area increased from 46.3 to 48.2 in August, still a sign of contraction. The September euro closed down 1.16 cents at $1.4214.

The Reserve Bank of Australia met today and kept its interest rate unchanged at 3.00%, as expected. The September Australian dollar fell 1.64 cents to 82.60.

The Chartered Institute of Purchasing and Supply/Markit’s index of manufacturing in the U.K. fell from 50.2 to 49.7 in August, weaker than expected.

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