Commodity Corner: Morning Comments

Good morning,


DXU9  95.675  -0.067                       GCQ9  1416.9  +4.9                                                                   ESU9  2936.00  +5.00                     CLQ9  59.53  +0.10


Welcome to another episode of “Deal or No Deal!”.  The meeting between Presidents Trump and Xi appears to have handcuffed the trade.  However, with this being the Main Event, the undercard certainly holds some interesting bouts of its  own.  Other topics form the G-20, such as monetary policies, FX levels and ecological issues are out there.  The USDA brings the Planting Intentions and Quarterly Stocks report to the, weather induced, topsy turvy grain market, in a season where planting has been a huge challenge.  OPEC+ meets early next week, and while the recent rally in oil may have members of the cartel breathing a bit easier, production levels and price stability have already been declared discussion items.  Toss in today being both month and quarter end, and there are many other potential obstacles for the market to consider, besides the trade negotiations.  However, trade does get top billing, and President Trump confirmed the meeting for tomorrow with President Xi and said he expects progress to be made.  President Xi is on the tape this morning, pledging to open up Chinese markets.  Let’s see how the banker (the markets) responds to the developments.


With all of the mentioned events, the markets have been confined to relatively narrow ranges in the overnight trade.  WTI oil (CLQ9) is basically unchanged, keeping within striking distance of the $60 level.  Gold is creeping back up, following the correction down throughout the week, doing a quick drive by past the $1400 neighborhood.  Not surprising that gold has a bit of a bid, with all of the uncertainties out in the markets.  The grain markets are also near unchanged today, in light volumes, ahead of the reports.  Keep in mind the reports are being viewed by many as old news, or kind of irrelevant this time around, as the surveys were taken while farmers were still uncertain about what they would be able to get planted this spring.  Anyhow, when the data prints, it is expected to generate some type of reaction in the trade.  The dollar is softening back up today a touch, as the debate on what the Fed’s next course of action/how aggressive should it be continues in the market.  Consensus remains there will be a cut of 25 basis points to short term rates at the July 31 meeting.  Where policy heads beyond that??  Commodity prices in general have a bid today, in response to the lower dollar.  Of course, any legitimate trade progress will have repercussions in most markets, including the currencies and commodities.


As mentioned, today marks month and quarter end.  If the markets remain relatively calm, waiting for any news on the trade front, the price action could be influenced by position squaring/window dressing.  There also could be some trade generated as accounts try to get themselves set up for the second half of the year.


There really isn’t much more to say on most of the markets.  Stay tuned to the media outlets, looking for “tape bombs”.   I guess I am dating myself a bit here.  Perhaps it is best to say keep your Twitter accounts active today and throughout the weekend!


Oh yeah, 2 PM CDT will have most eyes glued to the televisions, watching the US women battle France in the World Cup!  FIFA might want to have a look at its seeding process.  Not sure this should be a quarterfinal game.  Good luck to our US Women’s National Team!!


Go USA!  Beat France!!       


Technical Moving Averages:

Product               50 day                100 day               200 day

SX9                      887.75                   914.25                   924.50

CZ9                      416.50                   405.75                   402.75

WU9                    488.25                   487.25                   517.25

KWU9                  447.25                   458.75                   504.75

MWU9                546.50                   555.50                   577.75

SMZ9                   315.4                     317.4                     318.9

BOZ9                   28.36                     29.52                     29.74

CLQ9                    59.26                     59.39                     59.55

GCQ9                   1316.6                   1317.3                   1290.5

LHQ9                   89.105                   88.475                   84.885

LCQ9                    108.020                 112.230                 112.810

KCU9                    97.75                     100.30                   108.75

CCU9                   2404                       2351                       2315

CTZ9                    69.41                     72.01                     74.06

SBV9                    12.52                     12.85                     12.99

JOU9                    104.60                   113.65                   126.40

HGU9                  274.65                   282.65                   279.50


Have a good day,





Michael Clifford


141 W Jackson Boulevard                             

Ste 1065                                                              

Chicago, IL 60604                                              

Trean Group, LLC