Commodity Corner: Morning Comments

Good morning,


DXM0  97.980  -0.392                GCQ0  1743.3  +15.0                                      ESM0  3031.00  -7.00                  CLN0  32.93  -0.78


This is my third attempt at this thing today.  My first 2 efforts mysteriously blew up on me.  Third times a charm??


Clearly in the spotlight today is President Trump making an announcement “with respect to China”, we believe at 2 PM EDT, following his daily press conference.  The US has made well known its disapproval of China’s treatment of Hong Kong, and sanctions from the US towards China are expected.  Markets have been on the defensive since yesterday afternoon when this was announced, as it potentially can increase the tensions in the US/China relationship.  As we recall, the tensions surrounding the US/China trade negotiations were a major obstacle for the markets, and today’s actions possibly could create a major disruption to Phase 1 of the negotiated trade deal.  Many markets will probably chop around ahead of this announcement, but a move following should be expected (or earlier if a portion of the plan gets leaked).


While the market waits for President Trump, Fed Chairman Powell is on the undercard.  He is part of a panel at Princeton University, beginning at 11 AM EDT.   There is a Q&A session following the panel discussion.  The market has a pretty good handle on where Powell stands, in regards to the global economy dealing with the pandemic, but the Q&A always has the potential for some market moving comments. 


Today is month end, which tends to increase price volatility, as profits are taken on positions or position window dressing takes place.  A good example can be seen in the corn market, which had a strong short covering rally yesterday, as the  fundamentals really didn’t change.   Even this morning, with most markets exposed to Chinese demand on the defensive, corn remains a touch higher.  Last Friday, the CFTC reports in the COT report that funds are carrying a record spec short in corn (291k).  Similar story for wheat yesterday, which had a sharp rally.  The funds are carrying a sizable short position in wheat as well.  Wheat futures are also a couple of cents higher this morning.


As could be expected, gold and oil prices are acting as one might think, if there is an escalation between the  US and China.  Gold is up around $13 this morning, back to the safe haven status if there is a flee out of other assets.  Oil is down almost $1, as clearly the tensions would be a detriment to the global economy which is already facing some serious issues from the pandemic.


Most markets will have some type of reaction following President Trump, positive or negative.  That is the feature of the day, and I am going to sign off here, before this blows up on me again!  Have a good weekend!            


Technical Moving Averages:

Product               50 day                100 day               200 day

SN0                      852.75                   884.50                   915.25

CN0                      328.75                   358.00                   378.75

WN0                    531.25                   539.25                   528.50

KWN0                  477.75                   479.00                   464.50

MWN0                523.00                   536.50                   544.75

SMN0                  296.9                     301.1                     307.0

BON0                   26.62                     28.95                     30.30

CLN0                    27.54                     38.75                     46.63

GCQ0                   1694.2                   1647.5                   1583.3

LHQ0                   60.720                   71.140                   79.555

LCQ0                    93.105                   100.635                 105.815

KCN0                   112.85                   112.60                   113.55

CCN0                   2340                       2527                       2492

CTN0                   54.84                     61.52                     63.57

SBN0                    10.48                     12.21                     12.54

JON0                    115.10                   108.60                   108.95

HGN0                  230.35                   246.80                   257.30

HON0                  97.95                     130.41                   158.21

XBN0                   82.81                     120.55                   147.16

NGN0                  2.012                     2.055                     2.207






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC