Commodity Corner: Morning Comments

Good morning,


DXM0  99.970  +0.517               GCM0  1646.3  -14.0                                     ESM0  2516.00  -92.00                  CLK0  21.68  -0.92


For the moment, equities appear to be poised to snap its 3 day winning streak, even with the over 3 million number for yesterday’s jobless claims, as the $2T stimulus package goes before the House for a vote today.  Equities were under pressure in Asia, and have extended down further in the European hours.  The UK’s Boris Johnson has tested positive for the virus.


The primary talk in the market was on the jobless claims data.  While the over 3 million number really wasn’t a surprise, even with official estimates around 1.7 million, the whisper numbers were in the 4 to 5 million range.  The discussion has quickly turned to looking at next week’s number, where many are speculating the number could be double of this week’s.  The longevity and depth of this economic slump remains the concern.   


Gold appears to be settling back, after the delivery squeeze concerns earlier this week, which pushed the front futures contract up to $1700.   While still priced in the mid $1600’s, gold remains well supported with all of the global uncertainties surrounding the virus and economic implications.  


The oil market is rotating back down in unison with equities, as global demand concerns remain, while there has yet to be any progress made on increased production quota resolutions.  Prices have slipped back below $22 this morning, having taken a peak above $25 earlier this week.


Grain markets find themselves higher today, except for corn which has had an anchor tied to it from the fate of ethanol.  Soybeans are up marginally, with the continued hope that the US may see some improved demand, due to large needs coming out of China and transport logistics in South America.  Wheat is recovering again today, as global demand has jumped up with the global stock piling of necessities, which includes bread, as the world hunkers down to beat the pandemic.  Tuesday brings the quarterly stocks report and planting intentions report from the USDA.  Corn and soybeans are expected to see a return to levels of a couple of years ago, following the large amount of acres lost last year due to the flooding.  Wheat is expecting a slight decrease to the amount of acres planted.  Estimates can be found on the current data attachment. 


Coffee prices are continuing to correct back down, following a huge spike on available supply concerns following the big price spike attributed to pandemic provision buying.  Cocoa prices are down approximately 16% in March, the biggest drop since 2011, as increased stocks coupled with weak demand at a time when Easter tends to boost demand, is pushing prices down.  With the virus and the stay at home rules in place, it is looking like the Easter Bunny’s basket may be much lighter this year.  The meats were limit down yesterday, as the “hoarding” of supplies will have some implications down the road, as consumer’s work off the build-up. 


Apologies for the brevity, but with these crazy markets, I keep getting pulled away from typing this, so I’ll just cut it here, as I am now on hour 4 of trying to get this out.  Stay safe!


Technical Moving Averages:

Product               50 day                100 day               200 day

SK0                      892.00                   917.00                   925.50

CK0                      376.25                   383.25                   400.75

WK0                     545.25                   541.50                   528.50

KWK0                  471.00                   465.00                   462.75

MWK0                 536.50                   539.25                   548.75

SMK0                   303.1                     305.3                     310.2

BOK0                   29.69                     31.32                     30.66

CLK0                    44.85                     51.33                     52.77

GCM0                  1595.7                   1551.1                   1521.3

LHM0                  78.802                   83.502                   86.153

LCM0                   105.559                 111.852                 110.988

KCK0                    110.20                   116.70                   112.15

CCK0                    2664                      2614                       2519

CTK0                    64.89                     66.51                     65.27

SBK0                    13.59                     13.41                     13.12

JOK0                    100.50                   102.10                   106.50

HGK0                   253.40                   264.10                   264.70

HOK0                   149.44                   170.63                   178.06

XBK0                    142.19                   163.23                   168.50

NGK0                   1.890                     2.066                     2.195






Michael Clifford


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