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
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404