Commodity Corner: Morning Comments

Good morning,


DXZ9  97.420  -0.182                 GCG0  1481.4  +1.2                                        ESZ9  3121.50  +10.25                CLF0  58.70  +0.27


Equity markets have a modest bid this morning, with more positive undertones on US/China trade talks.  This sentiment is also supporting oil today, as the oil markets await news out of the OPEC+ meetings about increased cuts to production quotas.  The headlines from these meetings should be one of the main drivers of many markets today.  The drop in US inventories reported in yesterday’s weekly data also provided support for oil.  In addition, markets will be waiting for tomorrow’s release of November Non-Farm Payrolls and Unemployment rate.  The market expects to see and increase of 185k in payrolls, vs 128k last month.  The unemployment rate is expected to remain at 3.6%.  There may be some modest downticks to the payrolls forecasts, as yesterday’s ADP Employment Index came in lower than expected at +67k.  Today brings a quite a few numbers as well, one being the trade balance figures for October.  Given the ongoing trade dispute with China, this number is always interesting to see how much of an impact the delay in getting a trade deal in place is having on the US economy.  Gold is relatively tame today, having traded in a $5 range overnight. 


The grain markets have been relatively stable overnight, as the weather appears to have a fairly calm and normal forecast into next week.  Grain markets are waiting for the next release of the WASDE report from the USDA, coming on Tuesday.  Today’s export sales data will give a picture of how much demand there is for US crops, and to see where exports are to date, compared to USDA projections. 


The coffee market, which has had a huge run-up recently on supply concerns and from the algo community piling into the “long” trade, had a liquidating sell-off yesterday.  There also was some producer selling observed.  Overall, prices for coffee remain at the upper end of the range.  Sugar traded at a new high yesterday.   Prices are supported by sugar supply concerns, as more cane is being used for ethanol.  A massive short base in sugar has been reduced greatly over the past month.  Cocoa prices are also near the highs, as weather in the Ivory Coast and Ghana raises concerns about the development of the beans.


As mentioned above, the markets are in a bit of a waiting pattern, looking for news out of the OPEC+ meetings and on any trade headlines.        


Technical Moving Averages:

Product               50 day                100 day               200 day

SF0                       922.00                   908.50                   914.50

CH0                      391.75                   396.25                   408.25

WH0                      515.25                   504.25                   508.50                 

KWH0                  432.25                   433.75                   462.75

MWH0                 539.75                   537.25                   557.25

SMF0                   304.8                     304.1                     311.1

BOF0                   30.66                     29.91                     29.67

CLF0                     55.51                     55.45                     57.30

GCG0                   1493.5                   1498.1                   1420.5

LHG0                   73.355                   73.275                   76.045

LCG0                    121.560                 117.145                 117.985

KCH0                    107.00                   105.60                   106.60

CCH0                    2532                       2438                       2412

CTH0                    64.61                     62.96                     67.40

SBH0                    12.59                     12.55                     13.10

JOF0                    100.30                   102.85                   109.80

HGH0                  264.40                   264.05                   273.10





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

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