Good morning,
DXM9 97.520 -0.156 GCQ9 1321.2 +10.1 ESM9 2749.00 -3.50 CLN9 54.60 +1.10
Trean Group LLC has moved into its new corporate headquarters over the weekend, so today’s comment will be brief as all the kinks with the computers get ironed out.
Gold appears to be the feature this morning, trading near the highs for the recent moves, up $11 at 1322.2 (GCQ9). As the trade negotiations continue to drag on, and now looking longer with China, following President Trump’s dragging Mexico back into the trade tariff mix, gold prices are the benefactor. The recent decline in equities and turbulent oil trade has the market concerned about global economic growth.
Oil is bouncing, after making a new low in the overnight trade. Saudi Arabia’s oil minister made a comment, which the market interpreted as bullish. The comments were that the recent price volatility is unwarranted, which the market took as not being happy with the recent dramatic drop in prices. It was also noted that Saudi Arabia took Iran’s market share in May.
The wheat markets are surging higher today, as the continued rain and violent storms are thought to pose a major threat to the crops that are heading. Worries about quality are allowing wheat prices to add on to what was the biggest monthly rally in a couple of years in May. Even with all of the moisture happening in the US, other growing areas in the world are experiencing dry conditions. Some analytic firms in Russia are lowering crop production estimates, due to insufficient moisture. Australia and Canada are also too dry at the moment. An update look at crop conditions comes this afternoon from the USDA. Last week, saw wheat conditions decline from all of the rain. Corn and soybeans are steady to up slightly, being supported by the large rally in wheat. Corn is the biggest laggard, as the trade war with Mexico could have a big impact on demand. Soybeans are up slightly, as the thought that the planting dilemma corn has faced this spring could carry over to soybeans. A fresh look at planting progress comes this afternoon as well.
Coffee and orange juice continued the push higher on Friday, as the weather also threatens crop production. An updated look at fund positioning can be found on the attached document, from Friday’s COT report put out by the CFTC. Worth noting on this report, the corn short has been covered, but soybeans and wheat remain. Sugar remains with a large short. The live cattle and lean hogs saw modest reductions to the long positioning. The size of the long position was reduced a lot over the month of May.
Sorry for the brief note today. Everything will be back to normal tomorrow. Thanks!
Technical Moving Averages:
Product 50 day 100 day 200 day
SN9 872.0 902.25 908.75
CN9 376.5 382.5 387.0
WN9 460.5 480.75 512.75
KWN9 428.0 459.0 503.5
MWN9 535.0 552.75 577.0
CLN9 62.06 59.19 60.50
GCQ9 1296.5 1308.4 1277.4
LHM9 91.885 85.030 83.135
LCM9 116.175 117.395 116.065
KCN9 93.85 99.65 107.25
CCN9 2347 2317 2290
CTN9 74.32 74.76 77.75
SBN9 12.33 12.64 12.62
JON9 107.90 114.95 129.75
HGN9 283.40 282.85 279.40
Have a good day.
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404
312-896-2012 (fax)