Good morning,
DXZ9 98.225 +0.298 GCZ9 1537.4 -2.8 ESZ9 2965.25 -5.00 CLX9 56.46 -0.83
Nancy Pelosi brings a little excitement to an otherwise benign session yesterday, announcing formal impeachment proceedings against President Trump. In a normal reactionary move, equities traded lower and gold went bid. Fixed income markets, which already were having a decent day higher, remained bid throughout. In a light economic calendar week, where trading had been somewhat lethargic, this created some volatility for prices.
Oil prices are lower today, as a couple of reports late yesterday applied pressure to the trade. It was reported that the repairs for the Saudi Aramco production plant are ahead of schedule, suggesting production can get back online sooner than what was previously thought. The API reported crude inventories rose by 1.38m barrels last week, where an increase of only 450k barrels was expected. Oil prices have now come off around $7 since the spike on the Saudi Aramco drone attacks 10 days ago, taking out a couple of decent moving average support areas along the way. The next target is 55.96 for CLX9 (50 day MA). Many believe the new floor for a trading range post attacks is $55.00. The DOE brings more data of production and inventories from last week later this morning.
Grain prices are lower today, as the market goes back to sinking lower as harvest progresses for corn and soybeans, following the pop on the news of China allowing for more purchases of US beans. Soybeans led the complex higher over the past couple of sessions, but came to the realization that there have been numerous reports of increased Chinese buying during the trade discussions, with little actually materializing. The next round of trade talks appears to be scheduled for the week of Oct 7. Wheat is being supported by the weather in Canada, which has seen rain and cooler temperatures, impacting spring wheat harvest. There is talk that some early snow could set in as well, which will pose a risk to the crop that has yet to be harvested. The next set of data for the grain markets will be the quarterly stocks report and wheat production numbers on Sept 30.
Other soft commodities are lower today, being led down by the overnight strength in the dollar, as producers from other countries can more aggressively price their products, denominated in dollars. Aside from the supply an demand issues that have been discussed here over the past couple of weeks for these markets, any headlines on trade, positive or negative, will have a big impact on prices. As the softs are chopping around, keep any eye on the moving average levels listed below to serve as support and resistance points for the markets.
The metals markets are lower today. Gold is coming off from the late rally observed on the impeachment news yesterday, as the market digests the story and is determining what real impacts may come from all of this. Copper is trading down, following equities, also being led by the same story. Given the global landscape, it is pretty safe to assume gold is going to remain supported, as it is viewed as the safety net for investors facing markets that have tremendous uncertainty at the moment. Copper prices should be tied to global economic news, as a gauge of future demand for industrial metals.
Technical Moving Averages:
Product 50 day 100 day 200 day
SX9 882.00 887.00 913.00
CZ9 389.50 409.25 402.75
WZ9 485.50 500.25 508.75
KWZ9 419.25 447.00 478.25
MWZ9 520.75 541.25 561.75
SMZ9 301.7 309.3 315.0
BOZ9 28.94 28.60 29.41
CLX9 55.96 56.92 57.12
GCZ9 1496.6 1425.8 1372.5
LHZ9 67.100 71.755 70.760
LCZ9 107.640 109.525 114.220
KCZ9 100.70 102.60 105.90
CCZ9 2333 2391 2362
CTZ9 60.51 63.74 69.29
SBH0 12.51 12.93 13.41
JOX9 102.80 104.70 115.10
HGZ9 262.75 266.60 275.00
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404