Commodity Corner: Morning Comments

Good morning,


DXZ9  98.800  +0.035                     GCZ9  1508.7  -13.1                        ESZ9  2989.00  +8.50                     CLX9  55.80  -0.61


The market continues to move towards quarter end on Monday with equities continuing the grind back towards 3000 (ESZ9), oil rotating back down to what was thought to be the general $54 to 56 general area of trade for most of this quarter, and gold trading down, but still staying above the $1500 area.  The grain markets are also marking time, ahead of Monday’s quarterly stocks report, and wheat production numbers (estimates on attached current data sheet).  Wheat futures have had a bid for the past couple of sessions on concerns of snow in the northern plains and Canada.  Weather and currency movement have been the biggest factors in many of the other soft commodities of late as well, as prices continue to chop around.  The weather issues have come into focus, as it may have an impact on what was expected to be decent sized crop seasons for numerous products.  The gyrations of the dollar in particular, based upon the ever changing thoughts of where monetary policy truly is for the US, continues to cause decent sized swings in the South American currencies, which influences how aggressively producers there offer their prices in the market.  The specifics for each of these commodity markets has been pointed out over the course of this week here, and remains the same.


This afternoon brings a fresh look at fund positioning with the COT reports from the CFTC.  With position squaring a factor in the price action of late, and with some large positions in some of the commodity sectors being unwound, this could influence the direction of trade early next week.  The market will also be trying to figure out where and how the funds are looking to position themselves for Q4 and into year end.  The sharp collapse of the equity market observed last December is still in the back of everyone’s mind, and with stocks continuing to flirt with the highs, it will be interesting to see where assets get placed (or swapped to).


With month and quarter end on Monday, a slew of key economic data next week, the trade talks set to resume on Oct 7, continued tension surrounding the oil market and the Middle East, uncertainty about monetary policies and of course the continued impeachment saga, the markets will probably face a range type of trade, looking for news on any and all of the above subjects.  If the markets are in a range bound type of trade, the moving average levels listed below for the various commodity markets can serve as decent points for support and resistance.        


Technical Moving Averages:

Product               50 day                100 day               200 day

SX9                      881.25                   887.50                   912.50

CZ9                      386.75                   409.00                   402.50

WZ9                     484.00                   500.50                   508.00

KWZ9                   416.75                   446.50                   476.75

MWZ9                 521.00                   541.50                   561.25

SMZ9                   301.0                     309.1                     314.7

BOZ9                   28.97                     28.63                     29.40

CLX9                    55.92                     56.82                     57.15

GCZ9                    1500.0                   1430.1                   1374.8

LHZ9                    66.955                   71.530                   70.840

LCZ9                     107.440                 109.435                 114.150

KCZ9                    100.30                   102.70                   105.75

CCZ9                    2334                       2394                       2365

CTZ9                    60.41                     63.47                     69.11

SBH0                    12.50                     12.92                     13.40

JOX9                    102.40                   104.65                   114.60

HGZ9                   262.25                   266.10                   274.80






Michael Clifford


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