Commodity Corner: Morning Comments

Good morning,


DXH0  97.170  -0.189               GCG0  1553.0  -7.3                     ESH0  3315.50  -9.50                CLH0  57.89  -0.69


The US markets return from the holiday weekend to find equities pulling back a bit from the solid march higher observed last week.  It is a relatively light economic calendar week in the US, so the market will be paying attention to the economic forum taking place in Davos, along with setting up for next week’s Federal Reserve meeting.  Oil prices are lower today, having traded in over a $2 range overnight.  As Middle East tensions subside, global supply concerns ease back, putting some pressure on prices.  In addition, prices are leaking into this week’s production and inventory data in the US, following last week’s data showing a strong increase in production.  Gold prices are also a touch softer today, on tension relief. 


Grain markets are lower today, following a solid day on Friday, led by the corn market in what was believed to be a strong short covering trade.  Soybeans and wheat also were higher on Friday, and cotton continued its move upwards.  It is believed Phase 1 may be more beneficial for products such as cotton, wheat and corn, as opposed to soybeans which was always believed to be the main benefactor.  Soybeans are leading the way lower this morning, following no trade yesterday with the holiday, as concerns about the spread of the respiratory virus in China is thought to possible lead to a downtick in demand. 


The sugar market remains at 2 year highs, as funds continue to pile into long positioning.  Friday afternoon, the CFTC’s COT report showed an large increase in spec long position.  Money managers long interest in sugar has reached a 12 year high, as production in India and Thailand is considerably lower than last year.  Coffee prices remain under pressure, as a combination of a higher Brazilian production forecast, coupled with further depreciation of South American currencies is pushing prices down.  The Chinese virus is also a factor here, applying pressure to emerging markets equities and currencies.          


Technical Moving Averages:

Product               50 day                100 day               200 day

SH0                      927.50                   928.50                   921.25

CH0                      383.25                   387.00                   405.25

WH0                    537.25                   518.75                   515.50

KWH0                  454.75                   439.50                   458.25

MWH0                533.25                   536.75                   550.00

SMH0                  303.5                     305.3                     310.5

BOH0                   32.72                     31.50                     30.34

CLH0                    58.66                     56.56                     56.90

GCG0                   1498.3                   1507.2                   1447.5

LHJ0                     76.160                   78.255                   80.090

LCJ0                     126.550                 122.335                 120.365

KCH0                   121.25                   111.75                   109.05

CCH0                   2565                       2496                       2452

CTH0                   67.32                     64.96                     66.38

SBH0                    13.26                     12.80                     13.05

JOH0                    100.40                   102.85                   107.95

HGH0                  275.00                   268.80                   271.25





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC