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
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404