Commodity Corner: Morning Comments

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.





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC                                              


312-896-2012  (fax)