Commodity Corner: Morning Comments


Good morning,


DXZ9  98.130  -0.045                     GCZ9  1511.9  +0.4                         ESU9  2992.00  -7.00                   CLV9  62.09  -0.81


Today begins the 2 day Federal Reserve meeting, where the market is expecting another cut of 25 basis points to short term interest rates.  Fixed income markets continue to correct back up, in case the result of this meeting increases the odds of a more aggressive easing campaign going forward.  Equity prices are a bit softer this morning, having traded about $5 either side of settlement in the overnight trade.  Oil prices are down $1 today, after opening up last night’s session below yesterday’s settle, and never trading that level.  The market is attempting to determine how much production will be lost from the attack over the weekend.  Gold futures have rotated down today, but still managed to hold the $1500 area. 


Grain prices are lower this morning, as yesterday afternoon’s conditions and progress reports, while still behind, came in at or even above expectations in some cases.  The weather forecast looks decent for the final stages of crop development and as harvest is getting underway.  Open interest figures showed a small decline from yesterday’s trade, but funds continue to carry a decent spec short position in both corn and soybeans.    


Sugar prices are steady today, but have been undergoing a decent short covering rally over the past few sessions, as funds book some profits on a very large spec short position.  Coffee futures are lower, as the market appears to have put enough weather premium into prices at this time.  CONAB just released its updated projections for this year’s coffee crop.  The poor weather caused called for revising down the amount of bags expected this season.  This was viewed as old news by the market, as prices didn’t really even bounce when released.  Cotton prices are lower as well today, as global demand concerns are weighed against possibly a smaller sized crop than what was expected at the beginning of the season.  Any trade news will have a direct on the direction of the cotton trade.  Cocoa futures are hanging around unchanged levels, as the recent short covering rally appears to be stalling out.  Beneficial weather in  cocoa’s main growing regions had been the primary catalyst for the large down trade observed.  Last week saw above average rainfall again for West Africa, which should bode well for the crops. 


As stated, the oil market is trying to determine how much production will be lost in Saudi Arabia, and how much time it will take to get things back running again.  Saudi officials are saying there will be sever disruptions, which could take weeks to months to restore. President Trump came out yesterday and said he will release oil from the national stockpiles if need be, to avoid any shortfalls or squeezes on oil.  This helped to curtail the spike higher in prices yesterday.  Yesterday’s high in CLV9 was 63.38, and certainly an upside objective, if the market can take out the overnight high of 62.59 and yesterday’s settle of 62.90.  The price of 65.47 is the year’s high on the CLV9 chart.  Today is options expiration in the WTI market, where, as noted yesterday, options totaling a theoretical 62 million barrels of oil, which were far out of the money last Friday, are now in the money and very much in play today.          


Technical Moving Averages:

Product               50 day                100 day               200 day

SX9                       884.75                   886.25                   914.75

CZ9                      398.50                   410.00                   403.50

WZ9                     490.00                   498.75                   510.75

KWZ9                  426.75                   448.75                   482.75

MWZ9                 5223.50                 541.75                   564.25

SMZ9                   304.1                     309.9                     315.9

BOZ9                   28.81                     28.54                     29.41

CLV9                    56.20                     57.34                     57.04

GCZ9                    1484.6                   1412.6                   1365.0

LHZ9                    67.355                   72.720                   70.605

LCZ9                    108.510                 110.135                 114.490

KCZ9                    102.10                   102.55                   106.50

CCZ9                    2345                       2387                       2356

CTZ9                    60.88                     64.64                     69.80

SBH0                    12.65                     13.03                     13.45

JOX9                    103.55                   105.10                   116.50

HGZ9                   263.60                   268.20                   275.55






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

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