ENERGIES
December Crude Oil is expected to continue to feel downside pressure because of an anticipated global economic slowdown. A slowdown will lead to less demand of energy from factories because production will be decreased. The stronger Dollar is also reducing the crude oil’s appeal as a hedge against inflation. Yesterday’s break may have been overdone so do not be surprised by a light short-covering rally.

METALS
December Gold and December Silver took their time but eventually traded higher on Monday as the banking crisis worsened. Look for the precious metals to continue to rally if the credit crisis worsens in Europe or begins to spread to Asia. Traders are expected to maintain an upside bias in these markets as long as there is no confidence in holding paper assets. Any strength in the stock market today will likely temper gains in the metals however.

GRAINS
Grain markets should continue to attract selling pressure in the wake of the spreading credit and banking crisis throughout Europe. Commodity funds are under pressure to reduce positions because of margin calls, customer liquidations and the inability to raise new money. Elevators have been forced to sell grain in storage to pay off loans. Elevators are also finding it difficult to obtain credit for deliveries of newly harvested crops. Continue to look for more downside action as the harvest increases. Look for the downtrend to continue until normal credit conditions can be returned to the markets.

SOFTS
Fund liquidation is putting downside pressure on the softs complex this morning. Margin calls and the inability to attract fresh money or obtain credit to hold positions are forcing liquidations. Cocoa and coffee have been hit particularly hard because of the tremendous weakness in the British Pound. Fears of a worldwide recession as well as a stronger Dollar are leading to less demand and are also contributing factors to the across-the-board declines. Look for the downtrend to continue until normal credit conditions can be returned to the markets.

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