Commodity Corner: Morning Comments

Good morning,


DXM0  99.305  -0.061                 GCM0  1752.8  +7.2                                              ESM0  2950.75  +32.00                  CLN0  33.18  +0.71


Equities renew the move back up this morning, following what can only be termed as a very lethargic trade across most markets yesterday.  The June WTI futures contract expired yesterday, without all the excitement witnessed during the May expry.  Oil prices continue to grind higher, as global production cuts continue and demand is beginning to ramp back up.  WTI prices just moved above the $33 level.  Yesterday afternoon, the API projected US domestic crude inventories declined by 4.84m barrels last week.  Most analysts are looking for inventories to have grown by 2.4m barrels last week.  Gold prices recovered yesterday, following Monday’s sell-off after printing a 7 year high on Sunday night.  Repeating what was stated yesterday, as monetary policies appear to lean towards potentially more accommodative policies, to bolster the global economies, gold prices remain supported.


Grain markets remain torn between, an expected large crop, and the talk that China will be looking to accumulate big inventories, in a precautionary move against any virus related breakdowns in the supply chain.  Weather is playing a roll as well.  The string of recent rains has caused delays to some portions of the corn area that hasn’t been planted yet.  With the optimal end date to plant corn quickly approaching, if the fields can’t dry out, there is talk of an acreage shift, away from corn and towards soybeans.  The low flat price of corn also makes a switch seem more attractive.  These rains have also been beneficial for the winter wheat markets, where damage and stress from recent cold then dry conditions have been causing modest downticks in the weekly conditions report.  However, these same rains are causing some planting delays for spring wheat, providing some support to prices.  Weather is also impacting the cotton market.  The hot and dry conditions in Texas are causing stress to the crop, while the tropical storm in the Carolina’s raises damage concerns. 


The other soft commodities had relatively uneventful trades yesterday, getting pulled around by movements in equities and in the oil markets.  Keep an eye on the Brazilian real.  Continued political turmoil in Brazil, coupled with concerns about virus spread across many developing nations keeps pressure on many currencies.  More sharp movements in these currencies can have an impact on prices, influencing producers to sell or hold available supplies.


Not much more to say.  It is a relative light week on the economic calendar, ahead of the US holiday weekend coming up.  Headlines surrounding the search for a vaccine, along with progress (or lack thereof) with getting the economy going again should dictate the flow of trade in many markets.  The DOE releases the weekly production and inventory figures this morning.  The inventory number will be interesting, as demand appears to be increasing, and production   most likely remains on the down stroke.      


Technical Moving Averages:

Product               50 day                100 day               200 day

SN0                      854.75                   892.25                   917.75

CN0                      334.50                   363.00                   382.00

WN0                    530.75                   542.25                   528.50

KWN0                  476.25                   481.50                   465.00

MWN0                523.75                   539.75                   546.50

SMN0                  299.0                     302.7                     307.9

BON0                   26.56                     29.45                     30.39

CLM0                   24.97                     39.16                     46.77

GCM0                  1670.6                   1631.2                   1572.2

LHM0                  59.245                   71.135                   79.930

LCM0                   89.010                   100.775                 106.700

KCN0                   113.60                   114.40                   113.65

CCN0                   2348                       2533                       2490

CTN0                   55.14                     62.30                     63.70

SBN0                    10.57                     12.36                     12.60

JON0                    111.80                   107.35                   108.60

HGN0                  230.75                   249.30                   257.90

HOM0                 96.20                     134.23                   159.57

XBM0                  78.39                     124.63                   149.51

NGM0                 1.858                     1.958                     2.138






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC