Commodity Corner: Morning Comments

Good morning,


DXM0  99.460  -0.221                GCM0  1735.9  +1.5                                          ESM0  2940.50  -7.50                  CLN0  31.82  +0.17


Equity markets rotated from being up in the Asian session, to down a touch in Europe.  Following yesterday’s strong rally in equities, a correction trade really isn’t that surprising.  Equities are quickly baking a lot of optimism about an economic recovery into the prices.  It’s tempting to want to fade this, but there is a lot of money on the sidelines, itching to get back involved.  This same sentiment took most commodity markets for a ride higher as well. 


Gold prices had a correction of their own yesterday, following making a 7 year high in the overnight trade.  The screaming bid came from Fed Chairman Powell’s comments on Sunday evening that the Fed has more tools, in terms of monetary policy, to help stimulate the economy.  Declining interest rates is supportive for gold.  This same school of thought is what is causing gold prices to hold in here. 


Oil prices continue to mount an impressive rally from levels that were unthinkable to many.  WTI prices are holding above the $30 thresh hold.   Today is the last trading day for the June futures contract, which appears to have managed to avoid the disastrous fate of the May contract.  The same economic optimism and global producers cutting production amounts is helping to push oil up. 


Grain prices are a tad higher today, also on the hopes of seeing increased purchases from China.  One thought on ramped up Chinese purchases is that they are very concerned about the coronavirus having a major impact on the world supply chain.  Fearing an inability to get necessary commodity supplies, the Chinese are contemplating scooping up what is available….Yesterday afternoon’s crop conditions and progress report didn’t bring many big surprises.  The planting pace in corn and soybeans is, as expected, ahead of the 5 year averages.  While the recent rains may have created some disruptions to planting, the extended forecast provides plenty of windows for completion.  Winter wheat conditions had another modest downtick in the good/excellent category, but the recent rains are viewed as beneficial for wheat. 


Weather is also impacting the cotton market, as the hot and dry conditions in Texas cause stress, while the tropical storm in the Carolinas causes damage.  Cotton prices are also rising on the same renewed belief of increased business with China, coupled with global demand increasing as the world comes out of the pandemic.


Today, Fed Chairman Powell testifies before the Senate Banking Committee today.  It is believed he will not offer anything new from what he has said last week, on 60 minutes and in comments yesterday.    


Technical Moving Averages:

Product               50 day                100 day               200 day

SN0                      855.25                   893.50                   918.00

CN0                      335.50                   363.75                   382.50

WN0                    531.25                   542.50                   528.50

KWN0                  476.50                   482.00                   465.00

MWN0                524.00                   540.25                   546.50

SMN0                  299.4                     303.0                     308.1

BON0                   26.58                     29.53                     30.40

CLM0                   24.96                     39.43                     46.88

GCM0                  1669.2                   1628.9                   1570.8

LHM0                  59.660                   71.470                   80.060

LCM0                   88.975                   100.970                 106.755

KCN0                   113.65                   114.70                   113.70

CCN0                   2350                       2534                       2490

CTN0                   55.19                     62.42                     63.72

SBN0                   10.60                     12.39                     12.61

JON0                    111.15                   107.15                   108.55

HGN0                  230.90                   249.75                   258.00

HOM0                 96.60                     135.24                   160.01

XBM0                  78.57                     125.47                   149.85

NGM0                 1.859                     1.961                     2.140






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

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