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MARKET WRAP-UP

Bullishness is back with a vengeance after a brief dip to the 1,000 level on the S&P. Stocks closed higher as oil soared and investors piled back into the risk trade. The market hasn’t moved much over the last 8 weeks, but bullish sentiment continues to give investors hope that the market is seeing light at the end of the tunnel.

From Daily Futures:

U.S. Economy
The September U.S. dollar index closed down .76 at a new contract low of 77.34, pressured by steadily improving economic news, the Federal Reserve’s commitment to low interest rates, and ongoing concerns about additional U.S. government debt. The December 2010 eurodollars ended up .025 at 98.21, near its contract high.

The U.S. Treasury sold $38 billion of three-year T-notes for a yield of 1.487%, lower than expected. The bid-to-cover ratio at 3.02, was the best sign of demand since November of 2008. The December U.S. T-bonds were down 15/32nds at 118.19/32nds.

Grains and Cotton
The USDA said that last week’s export inspections of:
Corn totaled 43.1 million bushels, up 94% from a year ago.
Soybeans totaled 9.5 million bushels, up over three times from a year ago.
Wheat totaled 17.0 million bushels, down 32% from a year ago.
November soybeans closed up 14.5 cents at $9.365.

Wheat prices are so weak that not even today’s cheaper dollar could prevent a new contract low. December wheat fell 12.75 cents to $4.59.

Livestock
Smithfield Foods said that it lost $107.7 million in the quarter that ended on August 2nd, hurt by the H1N1 virus and the negative impact that it has had on pork demand. October hogs were up .47 at 50.97.

October cattle were up .45 at 87.10, like most commodities, helped by the weaker dollar.

Coffee
According to Dow Jones Newswires, Brazil’s government estimated the 2009-2010 coffee crop at 39 million (60 kg) bags, down from 46 million bags a year ago. They also noted that private estimates of Brazil’s crop are closer to 41 million bags. December coffee ended up a half-cent at $1.2460.

Sugar
India’s government told sugar mills that there in now a limit on the amount of sugar that they can stockpile and they also want large consumers to hold no more than 15 days of use. The government’s plan is an effort to make more sugar available during this time of tight supplies. March 2010 sugar closed down .63 at 22.40, the lowest close in four weeks.

Energies
OPEC members meet in Vienna on Wednesday and, so far, it sounds like there will be no changes to the official production levels. November crude oil jumped up $3.04 to $71.59, the highest close in a week.

Bargain hunting in natural gas? November natural gas closed up 12 cents at $3.857, posting two day consecutive days higher for the first time since July.

Metals
China’s Association of Automobile Manufacturers counted over 858,000 vehicle sales in August, up 90% on the month. Government subsidies were given credit for the big increase. December copper finished up 8.95 cents at $2.9560.

December gold was up $3.10 at $999.80 and December silver closed up 22.5 cents at $16.51, its highest level in over a year, helped by today’s weaker dollar and concerns about the potential for rising inflation.

Currencies
The U.K.’s Office for National Statistics said that manufacturing output was up .9% in July, much stronger than expected and the second monthly gain. Also, the British Chamber of Commerce said that it expects real GDP to be up 1.1% in 2010, up from an earlier estimate of .6%. The September British pound was up .0088 at $1.6486.

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