Commodity Corner: Morning Comments

Good morning,


DXU0  92.330  +0.071              GCZ0  1994.7  -18.4                                                                                     ESU0  3389.50  +2.50                  CLV0  42.71  -0.41


Equities continue to march higher, making new highs  for the year.  Some may not understand it, but it doesn’t pay to fight this right now.  Gold has rotated back below the $2000 mark in the overnight trade.   Oil prices are trading lower in light volumes, ahead of results from today’s OPEC+ meeting.  Prices are down even with the API projecting US oil inventories declined by 4.3m barrels last week.  The dollar index is relatively steady today. 


Grain prices are mostly higher today, with corn  the exception, being down a penny.  Day 2 of the Pro Farmer’s Crop Tour, which surveyed Indiana and Nebraska, produced results that are better than prior years’ averages, but fell short of what the USDA has penciled in as the yield for each state.  The first couple days of this tour are expected to be checking out the better conditioned areas, with the latter half of the tour expected to get a picture of the damage the Derecho may have caused.  China continues to be a good buyer of US agricultural products, helping keep an underlying bid in the market, along with giving a nice little push to prices.  Reported  yesterday, as China has been selling corn inventory out of its temporary reserve, to control the out of control rise in domestic corn prices, the temporary reserve has approximately 9mmt left in it.  Once this is depleted, the National Reserve has approximately 10mmt.  After that, china is left with its Permanent Reserve, which is believed there is no interest to tap into.  Thus, China could continue to be active in the import arena, looking to replenish its reserves.


Coffee prices have been rallying, as a reported decline in existing inventories is being interpreted as an increase to demand.  Arabica inventories at warehouses monitored by ICE futures have dropped to the lowest levels since April 2017.  This has prompted the funds to add to spec long positions.  Sugar, which has been in the midst of a strong rally over the past several sessions, took a breather yesterday, and had a corrective trade down.  Some rain in Brazil, providing some relief to the crops, was one of the excuses used to sell.  Another was India announcing subsidies for exporters, allowing for more aggressive producer pricings.  Lumber futures traded up to limit bid in yesterday’s trade, following a good showing in housing starts and permits, with numbers well above analysts’ estimates.  The good news for the housing market gave lumber prices a solid push. 


It is a relatively quiet economic calendar today, with the minutes from the most recent Federal Reserve meeting coming out this afternoon.  Day 3 of the crop tour takes place, and as mentioned, we now start to hit areas more impacted by the Derecho.  Oil has news from the OPEC+ meeting, along with domestic production and inventory data for last week out of the US.  News on the virus is always at the forefront.  Tonight, day 3 of the virtual Democratic Convention takes place, with Kamala Harris officially introducing herself to the country.         


Technical Moving Averages:

Product               50 day                100 day               200 day

SX0                      886.00                   871.25                   902.25

CZ0                      337.50                   338.75                   365.00

WZ0                     517.25                   528.00                   543.00                  

KWZ0                  451.75                   472.50                   482.25

MWZ0                 528.00                   536.00                   553.00

SMZ0                    296.1                     296.6                     304.4                   

BOZ0                   29.77                     28.72                     30.43

CLV0                    40.73                     36.35                     43.57

GCZ0                    1872.4                   1797.7                   1680.8

LHV0                     50.570                   52.105                   61.795                

LCV0                    103.970                 100.780                 106.790

KCZ0                    107.35                   110.05                   116.35

CCZ0                    2292                       2304                       2416

CTZ0                    61.82                     59.29                     63.28

SBV0                    12.17                     11.46                     12.50

JOX0                    124.60                   121.85                   116.15

HGU0                  280.45                   258.20                   261.70

HOV0                   125.01                   116.79                   144.57

XBV0                    114.48                   110.12                   122.27

NGU0                  1.902                     2.014                     2.114






Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

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