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