Commodity Corner: Morning Comments

Good morning,


DXZ9  98.210  -0.028                GCG0  1462.1  -1.7                                             ESZ9  3134.75  +2.00                CLF0  58.25  +0.24


The main story from the overnight trade appears to be Fed Chairman Powell, speaking in Providence, Rhode Island.  These are his first public comments since his meeting with President Trump last week.  For the most part, it would appear he is comfortable with where monetary is at currently.  Here are a few of the headlines from his speech:


-)  Monetary policy well positioned to support Fed’s goals.

-)  Fed policy supporting a decisive return to 2% inflation.

-)  If outlook changes materially, policy will change as well.

-)  Policy appropriate provided economy stays on track.

-)  Sees glass much more than half full, can fill it further (regarding economic expansion).

-)  Economic conditions are generally good.

-)  Household spending is “key” to ongoing favorable outlook.

-)  Fed would respond if developments prompted “material reassessment”.


The other news, of particular interest to the commodity world is the Brazilian Real trading at an all-time low of 4.2484/USD.  It is being driven down, in part, by a large current account deficit forecasted by the central bank for this month. 


The “trade deal” effect continues to impact the various markets.  Equities continued to march higher.  Oil was trading well also, from trade and from the prospects of possibly seeing production quotas remain in place coming out of the OPEC+ meeting next week.  Oil is also receiving support ahead of this week’s US production and stocks data, as last week’s numbers were less than what the market expected.  Gold is leaking lower, in modest volumes, as safe haven positions are lightened up.  Grains are slightly lower today, led down by wheat which had a big run-up yesterday.  Wheat’s rally began in Europe, where persistent rains are creating planting delays and MATIF wheat to gap higher.  This spread over to the US market, where weather concerns are impacting prices here as well.  For soybeans and corn, the harvest percentages are catching up to the averages.  Coffee had a spike higher yesterday, driven by the technicals, and not the FX market, as key resistance levels being violated brought in fresh buying.  Cotton is also trading higher on the trade prospects.  Sugar remains at the upper end of the recent trading range, as future supply deficits remain a concern.


Volumes may be a bit lighter this holiday week, as many trading desks are operating at less than full capacity.  In addition, Friday is first notice day for many December futures contracts.  In order to avoid the possibility of receiving a delivery notice, all LONG positions should be liquidated or rolled to another contract by the close of business TOMORROW.  So, calendar rolls will be a major focus of the trade as well.  


Have a happy and safe Thanksgiving holiday!        


Technical Moving Averages:

Product               50 day                100 day               200 day

SF0                       925.25                   911.50                   917.00

CH0                      392.25                   400.50                   409.25

WH0                    510.50                   504.75                   509.00

KWH0                  429.75                   436.75                   465.50

MWH0                 542.75                   540.25                   559.75

SMF0                   305.3                     305.5                     312.0

BOF0                   30.60                     29.82                     29.70

CLF0                     55.55                     55.56                     57.31

GCG0                   1500.0                   1495.3                   1417.1

LHG0                   74.200                   73.690                   76.025

LCG0                    120.010                 116.660                 117.805

KCH0                    104.90                   105.30                   106.45

CCH0                    2516                       2436                       2405

CTH0                    64.16                     62.95                     67.66

SBH0                    12.50                     12.58                     13.14

JOF0                    100.85                   103.55                   110.60

HGH0                  263.90                   264.25                   273.65





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC